Wall Street On Parade

Loan Loss Reserves at Mega Banks Are Far from Where They Need to Be

Loan Loss Reserves at Mega Banks Are Far from Where They Need to Be

By Pam Martens and Russ Martens: October 20, 2020 ~ It’s time to revisit that scene from the movie, The Big Short, where Steve Carell, playing Mark Baum, is sitting in the audience at the American Securitization Forum and interrupts the speaker on stage who has just stated that he expects subprime losses “will be contained at 5 percent.” Baum loudly asks: “Would you say that it is a possibility or a probability that subprime losses stop at 5 percent?” The speaker says: “I would say that it is a very strong probability, indeed.” Baum sits down but then begins to waive his arm in the air, forming a zero with his fingers. Baum then shouts out: “Zero! Zero! There is a zero percent chance that your subprime losses will stop at 5 percent.” You can view the scene from the movie below. That scene came to mind when we … Continue reading →

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How Criminal Charges Against a Wall Street Icon Went from Front Page News to a Yawn at the New York Times

How Criminal Charges Against a Wall Street Icon Went from Front Page News to a Yawn at the New York Times

By Pam Martens and Russ Martens: October 19, 2020 ~ On May 2, 1985 the highest law enforcement officer in the United States, the head of the U.S. Department of Justice, Attorney General Edwin Meese, held a news conference to announce that the sixth largest brokerage firm on Wall Street, E.F. Hutton, was pleading guilty to 2,000 felony counts of wire and mail fraud. It had also agreed to pay criminal fines of $2 million and up to $8 million in restitution to the 400 banks it had defrauded. The fraud had lasted less than two years, from July 1, 1980 and February 28, 1982, and consisted of the following according to the Justice Department: “The essence of the charges was that Hutton obtained the interest-free use of millions of dollars by intentionally writing checks in excess of the funds it had on deposit in various banks.” On the following … Continue reading →

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Harper’s Provides a Chilling Account of Secret Presidential Powers

Harper’s Provides a Chilling Account of Secret Presidential Powers

By Pam Martens and Russ Martens: October 18, 2020 ~ Andrew Cockburn has a stunning report in the November issue of Harper’s Magazine on secret Presidential Emergency Action Documents (PEADs) that “implement extraordinary presidential authority in response to extraordinary situations.” Cockburn notes that these sweeping powers have been “Compiled without any authorization from Congress” and were not on the public’s radar “until Donald Trump started to brag about them.”  In March, Trump made this statement: “Well, we have things that I can do.  We have very strong emergency powers under the Stafford Act.  And we are — we have it — I mean, I have it memorized, practically, as to the powers in that act.  And if I need to do something, I’ll do it. I have the right to do a lot of things that people don’t even know about.” Cockburn walks us through how Presidents throughout history have … Continue reading →

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Stock Mutual Funds Have Had Net Outflows for 25 Weeks, Bringing Total to $388.7 Billion — a Record

Stock Mutual Funds Have Had Net Outflows for 25 Weeks, Bringing Total to $388.7 Billion — a Record

By Pam Martens and Russ Martens: October 16, 2020 ~ Refinitiv Lipper, which has been tracking mutual fund flows for the past 18 years, reports that for the week ended Wednesday, October 14, equity (stock) mutual funds marked their 25th week of net negative outflows, losing -$8.6 billion for the week. Year-to-date, that brings their net outflows to -$388.7 billion. Refinitiv Lipper notes that if that figure stands, it will be the “largest annual net outflows ever, significantly outdistancing last year’s net negative result (-$294.0 billion).” That’s a pretty historic achievement given that the U.S. had the worst stock market freak out since the Great Depression in 2008 and early 2009. The S&P 500 Index lost 56.8 percent from October 9, 2007 to March 9, 2009. What raises further alarm bells about the steady outflow from stock mutual funds this year is that for the past 9-1/2 months there has … Continue reading →

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The Fed Wants the Public to Know It Can Withhold Information Under an Executive Order and Defy Subpoenas from Courts and Congress

The Fed Wants the Public to Know It Can Withhold Information Under an Executive Order and Defy Subpoenas from Courts and Congress

By Pam Martens and Russ Martens: October 15, 2020 ~  The United States is experiencing the worst pandemic since 1918. The U.S. economy is experiencing the worst economic crisis since the Great Depression of the 1930s. And the general public is attempting to vote in the most important presidential election of a lifetime with obstacles like fake ballot boxes, 5-hour wait lines, and destroyed mail-sorting machines. What is the central bank of the United States, the Federal Reserve, doing with its free time at this critical moment? It’s rewriting its rules for responding to Freedom of Information Act (FOIA) requests from the public and media. After revising the Fed’s own FOIA rules earlier this year, the Fed is now rewriting the FOIA rules for the Federal Open Market Committee (FOMC). That just happens to be the entity in charge of sluicing that cumulative $9 trillion to trading houses on Wall … Continue reading →

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Senator Whitehouse Named Names in Dark Money Tutorial at Amy Barrett’s Confirmation Hearing

Senator Whitehouse Named Names in Dark Money Tutorial at Amy Barrett’s Confirmation Hearing

By Pam Martens and Russ Martens: October 14, 2020 ~ You could hear a lot of throat clearing from the live mic at the table where Supreme Court nominee Amy Coney Barrett sat yesterday as Senator Sheldon Whitehouse (D-RI) brilliantly exposed the tentacles of the corporate and fossil fuels money that was attempting to ram her onto the U.S. Supreme Court. (See the full video of the presentation by Whitehouse below.) As a former U.S. Attorney for the Justice Department and former Attorney General of Rhode Island, Whitehouse knows corruption when he sees it. The Whitehouse tutorial was a summation of a 29-page treatise by Whitehouse that appeared earlier this year in the Harvard Law School Journal on Legislation. That article provides an in-depth look at how dark money has plied its corporate agenda to steal representative government from the American people. If you are searching for answers as to how … Continue reading →

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