Gold Has Set Historic Highs this Year as the Federal Reserve Has Reported Historic Losses

By Pam Martens and Russ Martens: April 17, 2024 ~ According to Federal Reserve data, for the first time in its history, the Fed has been losing money on a consistent basis since September 28, 2022. As of the last reporting date of April 10, those losses came to a cumulative $162.9 billion. As the chart above from the Fed indicates, the monthly losses thus far in 2024 have ranged from a high of $13.4 billion in January to $5.5 billion in March. We are not talking about unrealized losses on the debt securities the Fed holds on its balance sheet, which it acquired under its various Quantitative Easing programs. (The Fed does not mark to market the gains or losses on those securities on the basis that it plans to hold them to maturity.) We’re talking about real cash operating losses the Fed is experiencing from earning approximately 2 percent interest on … Continue reading →

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Stanford Finance Professor Anat Admati Is Making Jamie Dimon Very Nervous – Again Calling His Bank “Dangerous”

By Pam Martens and Russ Martens: April 16, 2024 ~ Stanford Finance Professor Anat Admati has been valiantly attempting to save the American financial system from the corrupting influence and disinformation campaigns of men like JPMorgan Chase’s Jamie Dimon for more than a decade. Her voice is gaining traction and that’s making Dimon very nervous. Dimon has admitted in his recent letter to shareholders that his federal banking regulators want the bank to raise 25 percent more capital. Making banks hold more equity capital (as opposed to debt) is an issue that Admati has made a central focus of her arguments for years. Dimon’s bank would have a lot more equity capital if Dimon had retained the bank’s earnings each year instead of tapping those earnings to boost the bank’s stock price by using $117 billion of the bank’s earnings for share buybacks over the past decade. (Retained earnings add to a … Continue reading →

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Jamie Dimon Dumped $150 Million of His JPMorgan Stock in February; Now He Says His Regulators Want 25 Percent More Capital at his Bank

By Pam Martens and Russ Martens: April 15, 2024 ~ On October 27 of last year, JPMorgan Chase filed an 8K form with the Securities and Exchange Commission (SEC) advising that, for the first time ever, its long-tenured Chairman and CEO, Jamie Dimon, and his family, intended to “sell 1 million shares” of his common stock holdings in the bank in 2024. The news made headlines because an insider selling a large amount of stock in any company – and particularly a bank with JPMorgan Chase’s serial history of running afoul of the law – can be a harbinger of bad news ahead for other shareholders. Dimon didn’t wait long into 2024 to start dumping stock. JPMorgan Chase filed another SEC form this past February showing that Dimon had sold 821,778 shares of the bank’s common stock for $150,167,222.52, or an average share price of $182.73 – which was suspiciously close to … Continue reading →

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The Black Swan Rears Its Head: The Fed Has Negative Capital Using GAAP Accounting

By Pam Martens and Russ Martens: April 11, 2024 ~ The Fed’s unprecedented experiments with years of ZIRP (Zero Interest Rate Policy) and QE (Quantitative Easing), where it bought up trillions of dollars of low-yielding U.S. Treasuries and agency Mortgage-Backed Securities (MBS) and quietly parked them on its balance sheet, are now posing a threat to the Fed’s flexibility in conducting monetary policy.  (Since 2008, the Fed’s concept of conducting monetary policy has come to enshrine serial Wall Street mega bank bailouts as a regular part of its monetary policy. Large and growing cash losses at the Fed may seriously crimp such future bailouts.) As of last Wednesday, according to Fed data, the Fed was sitting on $6.97 trillion of debt instruments it had predominantly purchased at very low fixed rates of interest. Because the interest rate (coupon) is fixed for these past purchases, when new bonds are issued in the marketplace … Continue reading →

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