By Pam Martens and Russ Martens: March 22, 2021 ~ At both the March 9 Senate Banking Committee and March 17 House Financial Services Committee hearings on the conflicts with Robinhood and Citadel in trading small investors’ shares in GameStop and other meme stocks, the same witness was called by the Republican side of the Committees. His name is Michael Piwowar. In Piwowar’s opening statements to both Committees, he introduced himself as the Executive Director of the think tank, the Milken Institute, and a former Commissioner at the Securities and Exchange Commission. He apparently supplied this same information to the Chairs of both Committees because that is also how Senate Banking Chair Sherrod Brown and House Financial Services Chair Maxine Waters introduced Piwowar. What was not disclosed for the public record at either hearing is the fact that Piwowar is also being paid as a Senior Advisor to a Wall Street … Continue reading →

By Pam Martens and Russ Martens: March 19, 2021 ~ During the Wednesday House Financial Services Committee hearing on the toxic business model gaining steam on Wall Street, where market makers pay for order flow from online brokerage firms like Robinhood in order to trade against the so-called “dumb money” from retail investors, there were regular bursts of hypocrisy from the Wall Street-funded Republicans on the Committee. One of the most gag-worthy lectures came from Congressman Andy Barr (R-KY). According to the Center for Responsive Politics, nine of Barr’s top 15 donors to his Campaign Committee and Leadership PAC for the 2019-2020 campaign cycle are connected to Wall Street. Those donors include Prudential Financial (which is a derivatives counterparty to mega banks on Wall Street); Apollo Global Management, a private equity firm; Bank of America, parent of the giant brokerage firm Merrill Lynch; Charles Schwab, the retail brokerage firm; FMR Corp., … Continue reading →

By Pam Martens and Russ Martens: March 18, 2021 ~ There were plenty of fireworks during yesterday’s House Financial Services Committee hearing on the ongoing GameStop trading fiasco and two of the major players involved: retail broker-dealer, Robinhood, which offers free trading accounts to novice investors and provides behavioral messaging like a digital display of confetti when they complete a trade; and Citadel Securities, a giant market-maker that pays Robinhood to route the bulk of its orders to it for execution. The most interesting moment of the day arrived several hours into the hearing in the following exchange between Congressman Jim Himes (D-CT) and a hearing witness, Dennis Kelleher, Co-Founder, President and CEO of Better Markets, a Wall Street watchdog that has been working in the public interest for the past decade. Kelleher holds a law degree from Harvard Law School. Himes said he wanted to figure out if “what we’re … Continue reading →

By Pam Martens and Russ Martens: March 17, 2021 ~ Most Americans are unaware of the existence of the Exchange Stabilization Fund (ESF). Together with the Federal Reserve Bank of New York (New York Fed) it has morphed into the U.S. Treasury Secretary’s Plunge Protection Team. The ESF was created in 1934 to provide support to the U.S. dollar during the Great Depression. As recently as March 31, 2007, the ESF was fairly modest in size, with assets of just $45.9 billion. Prior to Trump taking office, it had grown to $94.3 billion in assets. But thanks to a fancy maneuver by President Donald Trump’s Treasury Secretary, Steve Mnuchin, the ESF skyrocketed to a staggering balance of $682 billion as of September 30, 2020. Mnuchin was able to give himself this massive slush fund by helping to write the 2020 stimulus bill known as the CARES Act, which handed him $500 … Continue reading →

By Pam Martens and Russ Martens: March 17, 2021 ~ Sal Arnuk co-founded Themis Trading in 2002 with Joe Saluzzi. In 2012 they wrote the book Broken Markets: How High Frequency Trading and Predatory Practices on Wall Street Are Destroying Investor Confidence and Your Portfolio. The rigging of Wall Street has only grown worse since that time. Having a professional trader such as Arnuk provide an insider’s analysis of how Robinhood, which accepts retail stock orders and then sells the majority of them to high frequency trader, Citadel, in exchange for payment-for-order flow (PFOF), is just who Congress needs to hear from. Arnuk, according to his written testimony, will tell the House Financial Services Committee the following at a hearing scheduled for today: “Robinhood does something very novel; they combine investing/trading tools with a social media experience targeted to young people – complete with trading addiction, and a herding effect. They … Continue reading →

By Pam Martens and Russ Martens: March 16, 2021 ~ Less than five months ago, Goldman Sachs and its Malaysian subsidiary were criminally charged by the U.S. Department of Justice “for a sweeping international corruption scheme, conspiring to avail itself of more than $1.6 billion in bribes to multiple high-level government officials across several countries so that the company could reap hundreds of millions of dollars in fees.” The case has become infamously known as the 1MDB scandal, named after the Malaysian sovereign wealth fund that was ripped off. Goldman Sachs admitted to the charges and paid a criminal penalty and disgorgement of over $2.9 billion to settle the charges with the Department of Justice. That sum was on top of the $2.5 billion in cash it paid to settle with the government of Malaysia. Stripping shareholders of $5.4 billion of their capital for criminal conduct in the midst of the worst … Continue reading →

By Pam Martens and Russ Martens: March 15, 2021 ~ Last Wednesday, March 10, a Subcommittee of the Senate Judiciary Committee held a hearing of critical importance to every American on the growing tsunami of dark money that is corrupting the U.S court system, up to, and including, the U.S. Supreme Court. Senator Sheldon Whitehouse (D-RI), who has written extensively on the corrupting influence of dark money on American democracy, chairs that Subcommittee on Federal Courts, Oversight, Agency Action and Federal Rights. One would have thought that every major print and broadcast news outlet would have covered that hearing. Instead, the silence was deafening and smacked of censorship. The one peep that was heard from a major news outlet was a snarky attack on Whitehouse himself on the day of the hearing by the corporatized, right-wing Editorial Board of the Wall Street Journal, part of the Rupert Murdoch empire. The “Editorial … Continue reading →

March 14, 2021 ~ Senator Sherrod Brown (D-OH) delivered these remarks at the opening of the Senate Banking Committee hearing on March 4, 2021. “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 what kind of society we want to live in. Despite what we’re constantly told on TV, most Americans share a lot of the same values – they want an economy that’s fair and just, where hard work pays off for everyone, no matter who you are or what kind of work you do, and where everyone has the economic security to raise a family and retire with dignity. “But when you look at our economy, it doesn’t reflect the society most of us want. You can’t look at decades of growing productivity, with workers getting a smaller and smaller share of … Continue reading →

Ask and it shall be given: pic.twitter.com/FcnwtuAJQT — Trevor Chow (@tmychow) March 11, 2021 By Pam Martens and Russ Martens: March 12, 2021 ~ Trevor Chow is a first-year economist and Jardine Scholar at Trinity College, part of the University of Cambridge in England. With his hilarious and profoundly thought-provoking video satire of the four most recent Chairs of the Federal Reserve singing the words to Rick Astley’s 1987 hit single, “Never Gonna Give You Up,” he has immortalized himself with us and, very likely, Nomi Prins, Senator Bernie Sanders and the family of the late, courageous reporter, Mark Pittman of Bloomberg News. All of us have attempted to bring transparency to the wayward path of the Fed. Debuting in what is sure to be the first of many such Fed singing videos are, left to right, former Fed Chairs Alan Greenspan, Ben Bernanke, Janet Yellen and the current Fed Chair, … Continue reading →

By Pam Martens and Russ Martens: March 11, 2021 ~ Welcome to the casino where the house always wins. One day after the U.S. Senate Banking Committee held a wide-ranging hearing on the price manipulation that is occurring in the shares of GameStop and other meme stocks, the high frequency traders and hedge funds and Dark Pools that are making a killing on this manipulation poked their fingers directly in the eyes of Senate lawmakers. They put on a wild trading show yesterday that basically said, “catch us if you can.” GameStop is not some penny stock operating out of a boiler room in some grimy backwater of Wall Street. GameStop is a New York Stock Exchange listed stock. It has a market capitalization of $18.48 billion. But the brazen manipulation of its stock, as both the House Financial Services Committee and Senate Banking Committee conduct investigative hearings into who’s behind … Continue reading →