By Pam Martens and Russ Martens: May 27, 2021 ~ Last evening, Bloomberg News, followed by the Wall Street Journal, reported that the U.S. Department of Justice has opened a probe into the late March collapse of the Archegos family office hedge fund. The Wall Street Journal reported that “Banks that lent to Archegos, including Credit Suisse Group AG, UBS Group AG, Goldman Sachs Group Inc. and Morgan Stanley,” had been contacted for information by the Justice Department. According to media reports, Archegos is believed to have leveraged $20 billion of its own capital into more than $100 billion in stock and derivative exposure through margin loans from the banks named above, as well as others. Among the laundry list of items the Justice Department may be investigating, is whether the banks violated the Federal Reserve’s Regulation T, which would have limited the banks to an initial margin loan of no … Continue reading →

By Pam Martens and Russ Martens: May 27, 2021 ~ Senator Sherrod Brown opened yesterday’s Senate Banking Committee hearing with some fiery words about the mega banks on Wall Street, stating: “Like most Americans, I want businesses to make money, and I don’t mind that bankers are rich. Some people are going to be wealthy, and that’s fine. Here’s the problem: under the current system, Wall Street profits no matter what happens to workers, because those profits now come at the expense of workers. And your banks are the ones that largely built that system. “We often hear about the ‘invisible hand.’ But the economy isn’t physics – it’s not governed by scientific laws outside our control. It’s made up of people making choices about our values and the society we want to live in. The ‘invisible hand’ doesn’t lay off workers. The ‘invisible hand’ didn’t invent credit default swaps. The … Continue reading →

By Pam Martens and Russ Martens: May 26, 2021 ~ Below are selected remarks from Jamie Dimon’s prepared statement for the Senate Banking Committee hearing today, which will take testimony from a total of six Wall Street bank CEOs. Wall Street On Parade’s annotated remarks appear in brackets and italics. ~~~ “Chairman Brown, Ranking Member Toomey and distinguished members of the Committee, I appreciate the invitation to appear before you to talk about JPMorgan Chase, the strength and resilience of the U.S. financial system, and the people, businesses and communities we serve.” [The strength of the U.S. financial system would, of course, be a lot safer and sounder if the largest bank in the U.S., at which Dimon serves as Chairman and CEO, had not been charged with five felony counts since 2014, all occurring under his leadership. The bank admitted to all five counts.] “JPMorgan Chase is a global financial services firm … Continue reading →

By Pam Martens and Russ Martens: May 25, 2021 ~ On Wednesday, the Senate Banking Committee will haul each of the CEOs of the largest U.S. banks on Wall Street to a hearing. Three of those banks have been charged with, and admitted to, egregious felonies. But we will be shocked if any Senator dares to inquire about these unprecedented felony counts. Until 2014, no major Wall Street bank that held federally insured deposits had ever been charged with a felony in a century. That all changed on January 7, 2014 when the U.S. Department of Justice charged JPMorgan Chase with two criminal felony counts for its role in the Bernie Madoff Ponzi scheme. The bank had managed the business account for Madoff for decades and had even written to U.K. regulators that it suspected Madoff of running a fraudulent operation. It failed to share any such concerns with U.S. regulators. … Continue reading →

By Pam Martens and Russ Martens: May 24, 2021 ~ The House Financial Services’ Subcommittee on Investor Protection, Entrepreneurship and Capital Markets will hold a hearing today on the grossly disfigured initial public offering (IPO) process in the U.S. today, which is allowing the rich to get richer as the small retail investor is being effectively looted. The hearing is titled: “Going Public: SPACs, Direct Listings, Public Offerings, and the Need for Investor Protections.” Coinbase, the cryptocurrency exchange, went public on Nasdaq via a direct listing on April 14. On its first day of trading it closed at a share price of $328.28, giving it a market capitalization of $85.8 billion. In a traditional IPO, early investors and company executives are not allowed to sell their shares for several months due to a so-called lockup period. There’s no such prohibition in a direct listing. According to an SEC filing, Coinbase’s Chairman … Continue reading →

By Pam Martens and Russ Martens: May 21, 2021 ~ The chart above should provide ample proof to any thinking American that Bitcoin is about as appropriate as a payment mechanism as Elon Musk is appropriate as the CEO of an S&P 500 company. The U.S. Dollar Index, the orange line, is steady as she goes – meaning you have a stable currency to make payments for goods and services. In contrast, Bitcoin, the green line, looks like a heart attack patient being mugged on a gurney. A crypto crash in U.S. markets on Wednesday, spurred by China taking decisive action on barring cryptocurrencies as a means of payment at financial institutions and payment companies, apparently lit a fire under the U.S. Treasury and Federal Reserve to finally come out of their bunkers on the subject. Senator Sherrod Brown, Chair of the Senate Banking Committee, released a powerful letter to the … Continue reading →

By Pam Martens and Russ Martens: May 20, 2021 ~ Yesterday, Bitcoin put on a display that should put to rest any lingering doubts that it is a stable currency that could be used to pay for products or services. The current month Bitcoin futures contract at the CME swung between a low of $30,250 to a high of $43,530 – a difference of $13,280 in one trading session. From its intraday high of $58,140 on Wednesday, May 12, to its close one week later on Wednesday, May 19, Bitcoin had lost 34 percent of its value. As we explained here at Wall Street On Parade on May 12, some of the smartest minds in the investment community think Bitcoin is very bad for America. One of the most iconic investors in America, Warren Buffet, stated in May 2018 that Bitcoin is “probably rat poison squared.” In January of the same … Continue reading →

By Pam Martens and Russ Martens: May 19, 2021 ~ This past Sunday’s New York print edition of the New York Times carried an in-depth article by Kate Kelly on the “toxic environment” at Bank of America Merrill Lynch, pointing the finger at Thomas Montag for creating it. Kelly is a good investigative reporter and deserves praise for outing this current conduct at the firm. But Montag, the President of Global Banking and Markets, has only been with Bank of America Merrill Lynch since August of 2008 – a period of less than 13 years. The toxic environment at Merrill Lynch dates back half a century. Let’s start with the Helen O’Bannon case. In her book, Tales from the Boom-Boom Room, author Susan Antilla describes the personality test that Merrill Lynch gave to prospective brokers in the 1970s. O’Bannon, who had a Masters in Economics from Stanford, was asked to answer … Continue reading →

By Pam Martens and Russ Martens: May 18, 2021 ~ On February 24, President Joe Biden renewed the 2020 Presidential Proclamation, making it clear that the National Emergency related to the COVID-19 pandemic is still in effect. Most Americans don’t expect to become the victims of state-sanctioned price gouging during a National Emergency. But across Florida, struggling families and senior citizens are opening their homeowners’ insurance renewal notices to learn that their policy will now cost them $800 to $1200 more than it did last year. Rates are going up by 30 to 40 percent in many cases – during a National Emergency. Making the outrage among residents more palpable is the fact that a hurricane didn’t even touch down in Florida in 2020. A three bedroom/two bath cement block home with a tile roof is costing anywhere from $2800 to more than $3000 to insure in South Florida. In the … Continue reading →

By Pam Martens and Russ Martens: May 17, 2021 ~ During the current month of May, 2021, the following commodities have all set record high prices: lumber, iron ore, steel and copper. The volatility in the price of lumber this month has looked not all that dissimilar to the crazy price swings in the shares of GameStop, which have been under investigation for months by the U.S. Senate Banking and House Financial Services Committees. Thus far, however, there have been no announced hearings into what is causing these wild moves in commodity prices. From 2016 through 2019, lumber prices traded between $300 and $600 per 1,000 board feet. During just this month, however, lumber has spiked to as high as $1,733.50. It closed on Friday at $1,390. These skyrocketing prices in commodities are more than a little peculiar. The federal government believes that the economy of the U.S. is at such … Continue reading →