By Pam Martens and Russ Martens: September 9, 2020 ~ The mega banks on Wall Street joined the tech wreck yesterday as illustrated on the chart above. The selloff in these banks can be attributed to, primarily, the selloff in the price of crude oil – which suggests the banks will be forced to increase loan loss reserves as the threat of more bankruptcies among debt-strapped U.S. oil producers increases. Domestic crude oil, known as West Texas Intermediate or WTI, had a $41 handle on Friday on the Nymex. Yesterday, that turned into a $36 handle – a decline of 12 percent from Friday. A WTI handle below $40 is panic-time for U.S. independent oil producers who are deep in debt and struggling to avoid bankruptcy. The big summer driving season that was expected to boost crude demand was officially over the day after Labor Day. But, in fact, a … Continue reading →

By Pam Martens and Russ Martens: September 9, 2020 ~ The Dow Jones Industrial Average closed with a loss of 632 points yesterday (a 2.25 percent decline) while the Nasdaq erased 465 points for a loss of 4.11 percent. As Wall Street witnessed its most vicious correction since March over the past three consecutive trading sessions, a curious thing happened at the Fed. The Fed’s repo loan money spigot which had churned out more than $9 trillion cumulatively to the trading houses of Wall Street from the inception of the bailout program on September 17, 2019 to our tally in mid-March of this year, pumped out nary a drop of cold cash in repo loans as the market swooned. Big zeros in loans provided by the Fed populated their data sheets on all three days of the selloff. However, to comfort Wall Street with the knowledge that the Fed is … Continue reading →

By Pam Martens and Russ Martens: September 8, 2020 ~ Last week there was a big buzz among financial media outlets regarding the Japanese conglomerate, SoftBank. According to unnamed sources who spoke to the Financial Times, over the past few months SoftBank has paid about $4 billion in premiums, buying call options on individual U.S. technology stocks. The Financial Times called SoftBank the Nasdaq Whale and said its call buying had “stoked the fevered rally in big tech stocks before a sharp pullback” at the end of last week. A call option on an individual stock is a derivative that gives the buyer the right, but not the obligation, to purchase the actual stock at a specified price (strike price) over a specified time period. According to the Financial Times, the call options purchased by SoftBank gave it exposure to approximately $30 billion in the stock of big tech companies. … Continue reading →

By Pam Martens and Russ Martens: September 4, 2020 ~ There were ghosts of the dot.com bust of 2000 to 2002 on every trading screen yesterday. The Nasdaq composite index fell 4.96 percent to close at 11,458.10 but the carnage in many of the underlying stocks was far worse. Notably, 50 stocks in the tech-heavy Nasdaq dropped 9 percent or more yesterday, including some of this year’s highfliers. One of those highfliers was Zoom Video Communications (ZM). Zoom closed on the first day of trading this year at $68.72; flew to $457 by September 1; lost 9.97 percent yesterday to close at $381.32 – still showing more than a quintupling of its market value in a span of eight months. That stock has a nose-bleed-worthy price-to-earnings ratio of 474. While much of the focus has been on the bubble in the big tech names like Alphabet (parent of Google), Amazon, … Continue reading →

By Pam Martens and Russ Martens: September 3, 2020 ~ Happy New Year – here’s your eviction notice. That’s how tens of millions of struggling Americans have been set up to fail as the one percent on Wall Street, propped up by unlimited money from the Fed, ring in the New Year with Tiffany flutes of Dom Perignon in their Greenwich mansions. According to a recent study published by The Aspen Institute, 30 to 40 million Americans will be at risk of eviction over the next several months. The Centers for Disease Control and Prevention (CDC) has been dragged into the eviction morass because Democrats and Republicans in Congress cannot find common ground on a meaningful plan. On Tuesday, the CDC issued an order that bans landlords from evicting tenants that cannot afford to pay rent due to a pandemic-related job loss or income reduction. The CDC action follows an … Continue reading →

By Pam Martens and Russ Martens: September 2, 2020 ~  Members Exchange (MEMX), a brand new stock exchange, has announced that it will begin live trading of select stocks for the first time on September 21 with a full phase-in on September 29. Criminal histories are, apparently, no barrier to running a stock exchange in the United States to the deeply conflicted way of thinking of the Securities and Exchange Commission (SEC), which issued its approval to operate the exchange on May 5. Investors in the new stock exchange are some of the most serially-charged Wall Street banks, including JPMorgan, Goldman Sachs, and UBS, along with the hedge fund, Citadel Securities. BlackRock, which is up to its neck in the Federal Reserve’s deeply conflicted bailout programs, is also an investor, as is the high-frequency trading firm, Virtu Financial, and others. JPMorgan Chase has been criminally investigated by the U.S. Department … Continue reading →

By Pam Martens and Russ Martens: September 1, 2020 ~ Yesterday, two ominous events occurred. Gina Barton, writing for the Milwaukee Journal Sentinel, part of the USA Today Network, published an in-depth report on what eyewitnesses and journalists had seen occurring on Tuesday evening, August 25. That was the night that 17-year old Kyle Rittenhouse gunned down three protesters in Kenosha, Wisconsin, two of them fatally. Before the killings, Rittenhouse was openly carrying an assault rifle when police provided him with bottled water and stated “We appreciate you guys.” Rittenhouse, a Trump supporter, had traveled to Kenosha from Antioch, Illinois to counter Black Lives Matter protesters who have been in the streets protesting since police officer Rusten Sheskey fired seven bullets at point blank range at the back of Jacob Blake, an unarmed black man, on Sunday, August 23. According to Blake’s attorney, Blake is currently paralyzed from the waist down. … Continue reading →

By Pam Martens and Russ Martens: August 31, 2020 ~ The S&P 500 stock index set a new record high on Friday, closing at 3508.01 – the first time it has ever closed above 3500. In fact, the S&P 500 set a record high close every single day last week. Here’s the actual closing numbers: Monday, August 24: 3,431.28 Tuesday, August 25: 3,443.62 Wednesday, August 26: 3,478.73 Thursday, August 27: 3,484.55 Friday, August 28: 3,508.01 Refinitiv Lipper has been reporting fund flows into and out of the stock market for the past 18 years. According to Refinitiv Lipper, for the week ending Wednesday, August 26, stock (a/k/a equity) mutual funds and stock ETFs had a combined negative outflow of -$7.8 billion. For the week ending Wednesday, August 19, stock mutual funds and stock ETFs had a negative outflow of -$6.6 billion. Put the two weeks together and you have investors … Continue reading →

By Pam Martens and Russ Martens: August 28, 2020 ~ Thanks to the behemoth banks on Wall Street that engineered the largest Inside Job in the history of global banking and cratered the economy in 2008, retirees are now looking at a yield of 0.75 percent on a 10-year U.S. Treasury note. That paltry yield compares to the 4 percent or higher that retirees have been able to get throughout much of the last century on a T-Note. The Federal Reserve is directly responsible for these unprecedented low yields. For much of the past 12 years, the Fed has been manipulating interest rates lower by buying up trillions of dollars in bonds (quantitative easing) in order to avoid crashing the Wall Street banks. The Wall Street banks are holding tens of trillions of dollars in interest-rate derivative bets — betting that rates won’t rise substantially or will drift lower. So … Continue reading →

By Pam Martens and Russ Martens: August 27, 2020 ~ A rather fascinating picture is emerging that suggests that things were not as rosy in the U.S. economic landscape prior to the pandemic as President Donald Trump and his Director of the National Economic Council, Larry Kudlow, would have the public believe. Challenger, Gray & Christmas, Inc. has been tracking CEO departures for the past 12 years. Its Vice President, Andrew Challenger, called the numbers for 2019 “staggering.” It was the highest number since their surveys began in 2002. A total of 1,640 CEOs headed for the exits last year. That was 156 more CEOs than those who left their post in 2008 – the year that Wall Street blazed a scorched earth trail through the U.S. economy. The number of CEOs that did not leave on their own accord last year was 101 out of the 1,640. According to … Continue reading →