Search Results for: JPMorgan

By Pam Martens and Russ Martens: July 24, 2018 ~ The New York Times published a 1300-word shallow dive into the byzantine, globally-interconnected world of financial derivatives in its print edition yesterday. After years of ignoring this seismic problem since it last blew up the U.S. financial system in 2008, what accounts for the New York Times’ newfound interest? We can sum up its 1300 word article using only three letters – CYA. What frightened the Times into this foray into the dark web of financial derivatives held by the biggest Wall Street banks was a frightening, 111-page deep dive into the subject by Michael Greenberger, a law professor at the University of Maryland’s Carey School of Law. Greenberger knows a thing or two about derivatives, having previously served from 1997 to 1999 as the Director of the Division of Trading and Markets at the Commodity Futures Trading Commission (CFTC) … Continue reading →

By Pam Martens and Russ Martens: July 17, 2018 ~ With all the front page headlines on Russia’s meddling in the 2016 election to put Donald Trump in the White House, there needs to be some reflection on what’s happening today. Trump’s poll numbers are not collapsing today because the U.S. stock market appears to like Donald Trump. And since tens of millions of Americans’ 401(k) plans and future retirement prospects are tied to the stock market, self interest is playing a role in propping up the President’s approval ratings. But to an ever growing degree, the U.S. stock market is being propped up by hedge fund algorithms, corporations taking on debt to buy back their own stock, big Wall Street banks’ dark pools trading in darkness and foreign central banks and foreign sovereign wealth funds gobbling up U.S. stocks. Now it seems that the tiny window the public has … Continue reading →

By Pam Martens and Russ Martens: July 16, 2018 There’s a very good reason that major Wall Street frauds haven’t been in the headlines of late. It’s certainly not because those frauds aren’t taking place at this very moment all across Wall Street and its stealthy operations in London. It’s also not simply that the U.S. Justice Department is consumed with Russian spies and the President of the United States remains obsessed with Hillary Clinton’s email server. It’s because the major investigative body of Wall Street in the U.S. Senate, the Permanent Subcommittee on Investigations, has been turned into a sleepy little backwater that has held only two hearings this year and only three during all of last year and not one of those hearings has focused on Wall Street crime. One hearing was on government red tape; two were on opioids; and two were on sex traffickers. Those are … Continue reading →

By Pam Martens and Russ Martens: July 12, 2018 ~   According to a statistical release from the Federal Reserve, as of March 31, 2018 there were 1,812 commercial banks in the United States holding consolidated assets of $300 million or more. Of those 1,812 banks, just four banks (JPMorgan Chase, Bank of America, Wells Fargo and Citigroup’s Citibank) held 45 percent of the consolidated assets of those 1,812 banks. But looking at data at the Federal Deposit Insurance Corporation (FDIC) the situation is even more extreme. The FDIC shows there are 5,606 insured banks in total holding $17.531 trillion in assets. JPMorgan Chase, Bank of America, Wells Fargo and Citigroup’s Citibank are holding 40.42 percent of the assets of all the insured banks in the country. Let us put it another way. Those four banks represent 0.07 percent of all banks in the U.S. but they have somehow managed to … Continue reading →

By Pam Martens and Russ Martens: July 9, 2018 Since 1999 the chief risk officers of the Wall Street banks that blew themselves up in 2008 because of reckless and irresponsible risk practices have been meeting in secret and calling themselves the Counterparty Risk Management Policy Group (CRMPG). Their plan was to periodically release erudite-sounding reports to regulators suggesting that Wall Street could police itself under a set of “Guiding Principles” in order to perpetuate its off balance sheet debt bombs, unregulated OTC derivatives and a self-regulation regime. The group was led by former New York Fed President E. Gerald Corrigan who then moved on to a lucrative career at Goldman Sachs. Representatives from banks like Lehman Brothers, Citigroup, Bear Stearns and Merrill Lynch sat on key committees of the Group and helped to formulate the “Guiding Principles” for Wall Street. Lehman Brothers filed bankruptcy on September 15, 2008 – … Continue reading →

By Pam Martens and Russ Martens: July 2, 2018 ~  Wall Street’s top cop, Securities and Exchange Commission Chair Jay Clayton, will embark on a four-city Town Hall type event with retail investors beginning next Monday, July 9. The cities targeted will be Miami, Washington D.C., Philadelphia and Denver. The SEC says it wants to hear first-hand about retail investors’ experiences with their investment advisers. That announcement came from the SEC on Friday. On Monday of the previous week, Clayton delivered a speech on improving the Wall Street culture at a full day symposium held by the New York Fed  — an institution whose culture has also been deeply compromised by Wall Street. (See Is the New York Fed Too Deeply Conflicted to Regulate Wall Street?) The low point of Clayton’s speech came in the opening minutes when he lavished praise on the scandal-laced tenure of the President of the … Continue reading →

By Pam Martens and Russ Martens: June 29, 2018 ~ The U.S. Federal Reserve, the country’s central bank that is supposed to serve the interests of the nation, gave the largest Wall Street banks a big, irresponsible gift yesterday. The big banks will now be able to spend approximately $170 billion buying back their own stock and paying out increased dividends to shareholders instead of doing what banks are supposed to do: make loans to worthy businesses to stimulate the U.S. economy. But don’t expect to find that critical news on the front page of your local newspaper. The front pages of newspapers across America proved once again today that chaos in the running of the Federal government is dominating news reporting while it continues to relegate to the back pages the alarming risks that are growing again on Wall Street. This raises the question as to whether the chaos … Continue reading →

By Pam Martens and Russ Martens: June 27, 2018 ~  Despite President Donald Trump’s leanings toward authoritarianism, he is likely to learn a hard truth this year and next – that the Federal Reserve can make or break his presidency by delivering up to three different gut punches to the markets, which are very likely to spill over into the economy. And without a good economy, even Trump’s most fervent supporters may begin to doubt his omnipotence. For starters, next Monday the Federal Reserve is scheduled to shrink its purchases of U.S. Treasury securities and Federal agency debt and mortgage-backed securities by another $10 billion a month, from a shrinkage of $30 billion to $40 billion. And by October 1 of this year, the Fed will move from draining $40 billion a month from the markets to draining $50 billion, according to its previously announced schedule. (See chart below.) At … Continue reading →

By Pam Martens and Russ Martens: June 14, 2018 ~ Finance Professor John Griffin and fellow researcher Amin Shams, both at the University of Texas, released a study yesterday that is causing alarm bells to ring for investors in Bitcoin and other digital currencies. Titled “Is Bitcoin Really Un-Tethered?” the researchers found strong evidence that Tether, another digital currency, is being used to artificially support the price of Bitcoin when it comes under selling pressure. Griffin and Shams found further that “Tether seems to be used both to stabilize and manipulate Bitcoin prices.” Bitcoin soared over 1400 percent last year but has been selling off this year. It’s lost about 70 percent from the peak it set last year. The researchers write: “To illustrate the potential magnitude and predictive effect of Tether issuances on Bitcoin prices, we focus on the hours with the largest lagged combined Bitcoin and Tether flows on … Continue reading →

By Pam Martens and Russ Martens: June 7, 2018 ~ Short memories are going to once again doom millions of stock market investors who are getting their advice from Wall Street’s minions of deeply conflicted analysts and brokers. This is a good time to reflect on the fact that when the dot.com bubble went bust from 2000 to 2002 it wiped 78 percent of the value off the Nasdaq stock index. In the midst of the crash, this is how Ron Chernow correctly described what was happening for New York Times’ readers on March 15, 2001: “Let us be clear about the magnitude of the Nasdaq collapse. The tumble has been so steep and so bloody — close to $4 trillion in market value erased in one year —  that it amounts to nearly four times the carnage recorded in the October 1987 crash.” Chernow characterized the Nasdaq stock market … Continue reading →