By Pam Martens: August 3, 2021 ~ Risky derivative bets made by the mega banks on Wall Street, offloaded onto inadequately capitalized counterparties, were at the core of the collapse of the U.S. financial system in 2008. That collapse left millions of Americans without jobs, which led to millions of families and traumatized children losing their homes to foreclosure. The bank bosses got their million-dollar bonuses from the taxpayer bailouts and the Federal Reserve secretly pumped in over $29 trillion over 31 months to shore up the failing trading houses on Wall Street and their foreign derivative counterparties. Wall Street banks have rebuilt that derivatives doomsday machine today – a $168 trillion monster concentrated at four mega banks on Wall Street. But as we read through dozens of pages of written testimony submitted by witnesses for today’s Senate Banking hearing, the word “derivative” did not appear once. At 10:00 a.m. the U.S. Senate … Continue reading →

By Pam Martens and Russ Martens: August 2, 2021 ~ As of its most recent July 27 update on COVID vaccines, the Centers for Disease Control and Prevention (CDC) in the United States carries this statement: “Infections happen in only a small proportion of people who are fully vaccinated, even with the Delta variant.” That statement stands in stark contrast to what the Director of Public Health Services in Israel told television viewers of the CBS program, Face the Nation, on Sunday, reporting that 50 percent of new infections in Israel are from fully vaccinated people. The Pfizer–BioNTech mRNA COVID-19 vaccine was the exclusive vaccine used to inoculate the broad population of Israel. It was also one of the two most highly-administered vaccines in the United States, with Moderna’s mRNA vaccine being the other. As of July 12, only 12.8 million people in the U.S. had been vaccinated with the Johnson … Continue reading →

By Pam Martens and Russ Martens: July 30, 2021 ~ The Swiss mega bank, Credit Suisse, lost $5.5 billion in late March and early April from the highly-leveraged, highly concentrated stock positions it was financing via tricked-up derivatives for Archegos Capital Management, the family office hedge fund of Sung Kook “Bill” Hwang. Archegos blew up on March 25 after it defaulted on its margin calls from its banks. U.S. mega banks, Goldman Sachs and Morgan Stanley, were also extending high levels of margin debt to Archegos at the time of its blowup, as were other foreign banks. Over $10 billion in total losses have thus far been acknowledged by the banks. To get out in front of an ongoing Department of Justice investigation of the matter, Credit Suisse decided to hire the BigLaw firm, Paul, Weiss, Rifkind, Wharton & Garrison,  to conduct an investigation. Yesterday, Paul Weiss issued a 165-page report … Continue reading →

By Pam Martens and Russ Martens: July 28, 2021 ~ You really can’t make this stuff up. A G30 Working Group Chaired by Tim Geithner, the former President of the New York Fed, that secretly sluiced $29 trillion to bail out the Wall Street banks from their hubristic collapse in 2008, released a report today calling for a Standing Repo Facility from the Fed that would be “open to a broad range of market participants….” The ink was barely dry on that report when the Fed issued a press release today saying it was doing just that. The Standing Repo Facility (effectively meaning that it is permanent until the Fed says otherwise) will be able to lend out $500 billion in overnight loans each day at below-market interest rates. If the $500 billion runs out, Fed Chair Jerome Powell has the discretion to increase it. The repo operations will be conducted … Continue reading →

By Pam Martens and Russ Martens: July 28, 2021 ~ According to their latest 13F form filings with the Securities and Exchange Commission, as of March 31, 2021 the U.S. mega banks on Wall Street held a staggering $6.56 billion in three Chinese education stocks that just had their business model put through a shredder by the Chinese Communist Party. As of yesterday’s close, that $6.56 billion is now worth about 90 percent less than it was on March 31. Depending on just when these mega banks started panic dumping their positions, their losses could be substantial. New Oriental Education & Technology (stock symbol EDU), Gaotu Techedu (which previously went by the name GSX Techedu) (stock symbol is now GOTU), and TAL Education Group (stock symbol TAL) were all trading below $7 a share shortly after the market opened this morning. New Oriental has gone from a share price of more … Continue reading →

By Pam Martens and Russ Martens: July 27, 2021 ~ It’s going to be very hard for Americans to get their brains around what is happening in China. The Chinese Communist Party (CCP) decided to wipe out an entire industry – notwithstanding the fact that tens of billions of dollars were already invested in that industry’s publicly-traded companies, many of which were listed on the New York Stock Exchange. The industry is the private education market in China. A sampling of the carnage is reflected in the chart above. Shares of New Oriental Education & Technology (EDU), TAL Education (TAL), and Gaotu Techedu (GOTU), all listed on the New York Stock Exchange, have lost nearly all of their market value since April. Regulations issued over the weekend by China’s Ministry of Education now bar these private tutoring and online education platforms from making profits, from capital raising, and from being listed … Continue reading →

By Pam Martens and Russ Martens: July 26, 2021 ~ What happened on July 20 with the 56-44 vote in the Senate to confirm Kenneth Polite (pronounced Po-leet) to head the most powerful criminal law enforcement office in the United States, the Criminal Division of the Department of Justice, is a cautionary tale that should concern every American. Despite Polite owing more than $1.5 million in debts according to his financial disclosure form and public mortgage records; paying over 18 percent interest on an outstanding balance on a credit card; 19.99 percent interest on a personal loan; and now accepting a job where his income will be slashed by about 77 percent – not one Senator on the Senate Judiciary Committee asked a single question about this man’s bizarre financial picture during his confirmation hearing on May 26 or in written questions that followed. Senator Dick Durbin, a Democrat from Illinois, … Continue reading →

By Pam Martens and Russ Martens: July 23, 2021 ~ The unthinkable is happening with alarming regularity at the Frankenbank JPMorgan Chase. Over the last seven years, with Chairman and CEO Jamie Dimon at the helm, JPMorgan Chase has managed to do what no other federally-insured American bank has managed to do in the history of banking in the United States. The bank has admitted to five separate felony counts brought by the U.S. Department of Justice, while regulators took no action to remove the Board of Directors or Jamie Dimon. Now, once again, the outrageous hubris of this Board is on display. Just last fall the bank forked over $920 million of shareholders money to settle its fourth and fifth felony counts brought by the Department of Justice, this time for rigging the precious metals and U.S. Treasury market. Now, in the dog days of summer, rarely a time for … Continue reading →

By Pam Martens and Russ Martens: July 22, 2021 ~ It’s starting to look very swampy again in the nation’s capitol. President Biden pushed forward a law partner from the law firm that notoriously represented Donald Trump and the Trump Organization on tax matters for 15 years, right up to January of this year, to be the head of the Criminal Division of the U.S. Department of Justice. Astonishingly, on Tuesday, the Senate confirmed that nominee, Kenneth A. Polite, for the position. The Trump Organization and its CFO, Allen Weisselberg, were indicted earlier this month on tax evasion charges. Polite, a law partner with Morgan, Lewis & Bockius, will now preside over the criminal division of DOJ, which holds the reins on whether to bring criminal charges against the well-connected and powerful in corporate America – his law firm’s former clients, and more than likely, his future clients if past precedent … Continue reading →

By Pam Martens and Russ Martens: July 21, 2021 ~ The only time that tens of millions of Americans typically hear anything about the stock market on the evening news is when the S&P 500 Index sets a new high. That’s been happening a lot this year. For example, on June 30 it was widely reported that the S&P 500 had clinched its sixth record close for the year. But beneath the surface of that cheerful sound bite, major deterioration in the underpinnings of the market has been taking place. For example, recently there have been more stocks on the New York Stock Exchange setting 3-month lows than setting three-month highs. The same is true for the Nasdaq stock market and dramatically so for the smaller companies that trade Over-the-Counter (OTC). These measurements gauge the “breadth of the market.” When new lows consistently trounce new highs, it can be a forewarning of … Continue reading →