Search Results for: Federal Reserve

By Pam Martens and Russ Martens: January 16, 2018 Nomi Prins’ latest book, Collusion: How Central Bankers Rigged the World, ensures her place as one of this century’s most informed Wall Street historians. It’s the perfect segue from Prins’ earlier “It Takes a Pillage,” and her 2014 book All the Presidents’ Bankers. If you are serious about understanding the corrupting influences that have left the U.S. vulnerable to another epic financial crash, buy all three books and read them as one. Prins is a veteran of Wall Street who has now written six books and dozens of articles to help Americans navigate the snake pit that has replaced the financial system of the United States. It all started with her first book in 2004, Other People’s Money: The Corporate Mugging of America, where she explained her motivation as follows: “When I left Wall Street, at the height of a wave … Continue reading →

By Pam Martens and Russ Martens: January 10, 2018 On Monday, Institutional Investor’s Jonathan Kandell wrote a fascinating profile of Citigroup. He tried in every conceivable way to be kind to the company but the facts just kept getting in his way. Interestingly, the official name of the behemoth bank holding company, Citigroup, appears just once in the article. Its homey, cuddly moniker, “Citi,” appears 84 times. As the bank’s public relations legions attempt to erase the stain of Citigroup’s performance during the 2008 financial crisis and its Frankenbank birth in 1998 in violation of the Glass-Steagall Act and Bank Holding Act of 1956, changing the bank’s name is likely in the cards. When Sandy Weill and John Reed proposed to merge the disparate parts of Weill’s Travelers Group, which owned an insurance firm (Travelers), investment bank (Salomon Brothers) and retail brokerage (Smith Barney) with Reed’s Citicorp, parent of the … Continue reading →

By Pam Martens and Russ Martens: January 4, 2018  On Monday, 37-year old Arthur Gregg (A.G.) Sulzberger took the helm as the new Publisher of the New York Times, succeeding his father, Arthur Ochs Sulzberger Jr., whose tenure in the post lasted for the past quarter of a century. A.G. has previously held positions at the Times as metro reporter, national correspondent, associate editor for strategy and deputy publisher. He marked the occasion of becoming the fifth generation of his family to assume the mantle of Publisher by invoking his great-great grandfather, Adolph Ochs, who promised readers he would “give the news impartially, without fear or favor, regardless of party, sect, or interests involved.” A.G. then added his own 900-word promise for “independent, courageous, trustworthy journalism” on his watch. In one particularly poignant passage from the missive, A.G. writes: “The Times will hold itself to the highest standards of independence, … Continue reading →

By Pam Martens and Russ Martens: December 27, 2017 During Fed Chair Janet Yellen’s press conference on December 13, she had this to say about financial stability on Wall Street: “And I think when we look at other indicators of financial stability risks, there’s nothing flashing red there or possibly even orange. We have a much more resilient, stronger banking system, and we’re not seeing some worrisome buildup in leverage or credit growth at excessive levels.” Where does Fed Chair Janet Yellen get her information on financial stability risks to the U.S. financial system? A key source for that information is the Office of Financial Research (OFR), a Federal agency created under the Dodd-Frank financial reform legislation of 2010 to keep key government regulators like the Federal Reserve informed on mounting risks. On December 5, the OFR released its Annual Report for 2017. It was not nearly as sanguine as … Continue reading →

By Pam Martens and Russ Martens: December 20, 2017 Like that box of macaroni in your kitchen cupboard, the U.S. stock market has become a lot more expensive but has actually shrunk in terms of quantity. In 1975, U.S. domestic companies that traded on U.S. exchanges totaled 4,819. Forty years later, the market has shrunk to less than 4,000, despite a tripling in GDP. If you take a shorter time span of  20 years, which included the dot.com craze of listing companies known to Wall Street insiders as “crap” and “dogs,” the numbers are worse. In September of last year, Jim Clifton, the Chairman and CEO of Gallup, the polling company, reported the following: “The number of publicly listed companies trading on U.S. exchanges has been cut almost in half in the past 20 years — from about 7,300 to 3,700. Because firms can’t grow organically — that is, build more business … Continue reading →

By Pam Martens and Russ Martens: December 15, 2017 During Janet Yellen’s last press conference as Federal Reserve Chair on Wednesday, Donna Borak, the Senior Economics Writer at CNN, asked Yellen a question regarding the proposed tax cut. Borak queried: “To return back to the prospective tax bill questions, in your view at all is the Republican tax bill an ill-timed fiscal stimulus, and are you concerned at all it will wind up squandering the tools both the Congress and the Fed have when it comes time to dealing with the recession?” Yellen answered as follows: “So look, I will just say that it is up to the administration and Congress to decide on appropriate fiscal policy, and our job is to maintain our focus on employment and inflation. We continue to think, as you can see from the projections, that a gradual path of rate increases remains appropriate even … Continue reading →

By Pam Martens and Russ Martens: December 14, 2017 The outgoing Chair of the Federal Reserve, Janet Yellen, held her last press conference yesterday following the Federal Open Market Committee’s decision to hike the Feds Fund rate by one-quarter percentage point, bringing its target range to 1-1/4 to 1-1/2 percent. Given the growing reports from market watchers that the stock market has entered the bubble stage and could pose a serious threat to the health of the economy should the bubble burst, CNBC’s Steve Liesman asked Yellen during the press conference if there are “concerns at the Fed about current market valuations.” Yellen gave a response which may doom her from a respected place in history. She stated: “So let me start Steve with the stock market generally. Of course the stock market has gone up a great deal this year and we have in recent months characterized the general … Continue reading →

By Pam Martens and Russ Martens: December 8, 2017 Some of the same warning signs that emerged before the 1929 to 1933 market crash, the tech mania crash of 2000, and the epic Wall Street meltdown of 2008 are flashing red. If you have significant amounts of your 401(k) invested in equity mutual funds (that is, those invested in stocks), it’s time to take an objective appraisal of today’s market versus historic benchmarks. This is also a good time to remember that markets have lost as much as 50 percent of their value from peak to trough in the last 20 years. If that’s more pain than you’re prepared to suffer, it may be time to trim back your exposure. We’ll get to the specifics on today’s market shortly, but first some necessary background. In the market crash of 1929 to 1933, the stock market lost 90 percent of its … Continue reading →

By Pam Martens and Russ Martens: November 29, 2017 “Populist” candidate for President, Donald Trump, railed against the “political establishment” and Wall Street elites who were “getting away with murder.” On October 26, 2016, just days before the Presidential election, Trump spoke at a rally in Charlotte, North Carolina and promised to uphold the plank in the Republican Party platform to break up the big banks by restoring the Glass-Steagall Act. He stated: “The policies of the Clintons brought us the financial recession — through lifting Glass-Steagall, pushing subprime lending, and blocking reforms to Fannie and Freddie. Two friendly names but they’re not so friendly. It’s time for a 21st century Glass-Steagall and, as part of that, a priority on helping African-American businesses get the credit they need.” Now, as the sitting President, the former populist candidate has become the embodiment of the political establishment he railed against. He has stacked his … Continue reading →

By Pam Martens and Russ Martens: November 27, 2017 Since its financial meltdown in 2008 and unprecedented bailout by the U.S. taxpayer, Citigroup (parent of Citibank) has been repeatedly charged by its Federal regulators with odious crimes against its pooled mortgage investors, credit card and banking customers, student loan borrowers, and for its foreclosure frauds. It has paid billions of dollars in fines for its past misdeeds while new charges pile up. In 2015, it became an admitted felon for participating in rigging foreign exchange markets. In short, Citigroup is a lawbreaking recidivist. If it were a mere human, it would be serving a long prison term. Instead, its fines for charges of egregious acts are getting smaller, not larger. Last Tuesday, the Consumer Financial Protection Bureau (CFPB), which typically has a good track record of holding the big Wall Street banks accountable for their misdeeds, imposed an unusually feeble … Continue reading →