The history of Bloomberg News came to mind. That news outlet had previously come under fire for spiking stories that may have been counter to the business interests of its billionaire owner Michael Bloomberg, who derives his billions of wealth from leasing the Bloomberg data terminal to Wall Street’s trading floors around the world.
On March 11, 2016, Matt Winkler, Editor-in-Chief-Emeritus at Bloomberg, wrote a sycophantic piece titled “Stop Bashing Wall Street. Times Have Changed.” Winkler wrote a fantasy view of where things stood at the time:
”One of the reasons the American economy is performing better than any of the largest in Asia and Europe is that its regulators have repaired the damage of the financial crisis and the worst recession since the Great Depression. Led by the Federal Reserve, they replaced incentives for reckless speculation with catalysts for old-fashioned credit creation backed by levels of capital that are unprecedented in modern times.”
Winkler’s column was an egregious coverup of the “reckless speculation” that continued on steroids on Wall Street. The megabanks were trading their own stock in their own dark pools – which continues to this day. The Office of the Comptroller of the Currency would report that as of March 31, 2016, just four banks held 91 percent of $192.9 trillion in notional derivatives held by all banks and savings associations in the U.S. Those four banks were JPMorgan Chase, Citigroup’s Citibank (which blew itself up with derivatives in 2008), Goldman Sachs Bank USA, and Bank of America – the same banks that were taking giant sums from the Fed’s emergency repo loan facility in 2019.
Also in 2016, Michael Bloomberg showed very poor judgement in co-authoring an OpEd with Jamie Dimon, Chairman and CEO of JPMorgan Chase, a man who should have been the target of investigative reporting by Bloomberg journalists for an unprecedented crime spree at his bank.
In 2015 Politico’s Luke O’Brien deeply reported the details of a Bloomberg News article that was critical on China and appeared to have been spiked to preserve business sales of the Bloomberg terminal in that country.
And then there are those strange associations with felony counts or fines at Wall Street banks and those expensive Bloomberg terminals. The chat rooms that facilitated the rigging of the Libor interest rate benchmark and the criminal charges that came out of the rigging of foreign exchange trading were tied to chat rooms on the Bloomberg terminals. According to the late Bloomberg reporter, Mark Pittman, the Bloomberg terminal also had the capability of allowing hedge funds to find the worst subprime dreck in the market, making it possible for hedge funds like John Paulson’s to short the market while getting banks like Goldman Sachs to sell the other side of the deal to its unwitting investors.
On November 20, 2019, Brian Chappatta, who still works for Bloomberg News, wrote this about the Fed’s emergency repo loans under the headline “Fed Throws the Kitchen Sink at Short Rates and Still Struggles”:
”Consider all the steps the Fed has taken since Sept. 16 just for [Fed Chair] Powell to get to the point where he thinks funding markets are under control:
”Sept. 17: The New York Fed conducts its first overnight system repurchase agreement in a decade, taking in $53.2 billion of securities.
“Sept. 25: The New York Fed increases the size of its overnight system repurchase agreement operations to a $100 billion maximum, from $75 billion previously, and also raises the limit on its 14-day term repo operation to $60 billion from $30 billion.
“Oct. 11: The Fed announces it will purchase $60 billion of Treasury bills a month and will keep doing so ‘at least into the second quarter of next year.’
“Oct. 23: The New York Fed boosts the size of its overnight repo offerings to at least $120 billion, a size it is set to maintain through at least Dec. 12.
“Nov. 14: The New York Fed says it will conduct two repo operations, each with terms of 42 days, on Nov. 25 and Dec. 2. With maximum sizes of at least $25 billion and $15 billion, these would carry past the end of the year. Taken together, it’s readily apparent that Fed officials are throwing the kitchen sink at the short-term funding markets and hoping they’ll settle down….”
Numerous other Bloomberg News reporters wrote about the Fed’s emergency repo operations in 2019 and early 2020, including Liz McCormick, Adam Tempkin, and Alex Harris. And yet, today, not one of them has revealed to the American people that the very same megabanks that were drinking at the Fed’s trough in 2008 were back again at the trough in 2019.
One of the most inquisitive reporters in September 2019 when it came to what had led to the Fed’s hasty interventions in the repo market was Francine McKenna, who at that time reported for the Dow Jones affiliate, MarketWatch. Less than two months later, according to her LinkedIn profile, McKenna no longer worked for MarketWatch. She had gone independent, publishing The Dig, a newsletter at Substack. On November 3, 2019, McKenna reported as follows at The Dig on the ongoing repo crisis:
“One of the opinion writers at Market Watch wrote late last week that the Fed is in ‘stealth’ intervention mode after the Fed injected $99.9 billion in temporary liquidity into the financial system and $7.5 billion in permanent reserves as part of a program to buy $60 billion a month in Treasury bills.
“But market demand for overnight repo operations far exceeded even the $75 billion the Fed allocated. So, on Wednesday, the Fed added $45 billion in addition to the $75 billion repo facility for a daily total of $120 billion.
“There’s nothing stealth about continuing to pump billions into the repurchase market long after it said it would be needed.
“The Fed originally said it planned to conduct daily repo operations until October 10. That intervention has now gone on beyond the end of the month of October with no end in sight.
“Something is cooking but no one who knows what is telling the rest of us who is suddenly chronically illiquid.”
Obviously, the banks that were borrowing the largest sums on a perpetual basis from the Fed were the “chronically illiquid.” JPMorgan Chase and Citigroup’s Citibank are among the largest deposit-taking, federally-insured banks in the U.S. Americans have an urgent need to know why they needed to borrow from the Fed on an emergency basis in the fall of 2019.
We’ve never before seen a total news blackout of a financial news story of this magnitude in our 35 years of monitoring Wall Street and the Fed. (We have, however, documented a pattern of corporate media censoring news about the crimes of Wall Street’s megabanks.)
Theories abound as to why this current story is off limits to the media. One theory goes like this: the Fed has made headlines around the world in recent months over its own trading scandal – the worst in its history. Granular details of just how deep this Fed trading scandal goes have also been withheld from the public as well as members of Congress. If the media were now to focus on yet another scandal at the Fed – such as it bailing out the banks in 2019 because of their own hubris once again – there might be legislation introduced in Congress to strip the Fed of its supervisory role over the megabanks and a restoration of the Glass-Steagall Act to separate the federally-insured commercial banks from the trading casinos on Wall Street.
Why might such an outcome be a problem for media outlets in New York City? Three of the serially charged banks (JPMorgan Chase, Goldman Sachs and Citigroup) are actually owners of the New York Fed – the regional Fed bank that played the major role in doling out the bailout money in 2008, and again in 2019. The New York Fed and its unlimited ability to electronically print money, are a boon to the New York City economy, which is a boon to advertising revenue at the big New York City-based media outlets.
The history of Bloomberg News came to mind. That news outlet had previously come under fire for spiking stories that may have been counter to the business interests of its billionaire owner Michael Bloomberg, who derives his billions of wealth from leasing the Bloomberg data terminal to Wall Street’s trading floors around the world.
On March 11, 2016, Matt Winkler, Editor-in-Chief-Emeritus at Bloomberg, wrote a sycophantic piece titled “Stop Bashing Wall Street. Times Have Changed.” Winkler wrote a fantasy view of where things stood at the time:
”One of the reasons the American economy is performing better than any of the largest in Asia and Europe is that its regulators have repaired the damage of the financial crisis and the worst recession since the Great Depression. Led by the Federal Reserve, they replaced incentives for reckless speculation with catalysts for old-fashioned credit creation backed by levels of capital that are unprecedented in modern times.”
Winkler’s column was an egregious coverup of the “reckless speculation” that continued on steroids on Wall Street. The megabanks were trading their own stock in their own dark pools – which continues to this day. The Office of the Comptroller of the Currency would report that as of March 31, 2016, just four banks held 91 percent of $192.9 trillion in notional derivatives held by all banks and savings associations in the U.S. Those four banks were JPMorgan Chase, Citigroup’s Citibank (which blew itself up with derivatives in 2008), Goldman Sachs Bank USA, and Bank of America – the same banks that were taking giant sums from the Fed’s emergency repo loan facility in 2019.
Also in 2016, Michael Bloomberg showed very poor judgement in co-authoring an OpEd with Jamie Dimon, Chairman and CEO of JPMorgan Chase, a man who should have been the target of investigative reporting by Bloomberg journalists for an unprecedented crime spree at his bank.
In 2015 Politico’s Luke O’Brien deeply reported the details of a Bloomberg News article that was critical on China and appeared to have been spiked to preserve business sales of the Bloomberg terminal in that country.
And then there are those strange associations with felony counts or fines at Wall Street banks and those expensive Bloomberg terminals. The chat rooms that facilitated the rigging of the Libor interest rate benchmark and the criminal charges that came out of the rigging of foreign exchange trading were tied to chat rooms on the Bloomberg terminals. According to the late Bloomberg reporter, Mark Pittman, the Bloomberg terminal also had the capability of allowing hedge funds to find the worst subprime dreck in the market, making it possible for hedge funds like John Paulson’s to short the market while getting banks like Goldman Sachs to sell the other side of the deal to its unwitting investors.
On November 20, 2019, Brian Chappatta, who still works for Bloomberg News, wrote this about the Fed’s emergency repo loans under the headline “Fed Throws the Kitchen Sink at Short Rates and Still Struggles”:
”Consider all the steps the Fed has taken since Sept. 16 just for [Fed Chair] Powell to get to the point where he thinks funding markets are under control:
”Sept. 17: The New York Fed conducts its first overnight system repurchase agreement in a decade, taking in $53.2 billion of securities.
“Sept. 25: The New York Fed increases the size of its overnight system repurchase agreement operations to a $100 billion maximum, from $75 billion previously, and also raises the limit on its 14-day term repo operation to $60 billion from $30 billion.
“Oct. 11: The Fed announces it will purchase $60 billion of Treasury bills a month and will keep doing so ‘at least into the second quarter of next year.’
“Oct. 23: The New York Fed boosts the size of its overnight repo offerings to at least $120 billion, a size it is set to maintain through at least Dec. 12.
“Nov. 14: The New York Fed says it will conduct two repo operations, each with terms of 42 days, on Nov. 25 and Dec. 2. With maximum sizes of at least $25 billion and $15 billion, these would carry past the end of the year. Taken together, it’s readily apparent that Fed officials are throwing the kitchen sink at the short-term funding markets and hoping they’ll settle down….”
Numerous other Bloomberg News reporters wrote about the Fed’s emergency repo operations in 2019 and early 2020, including Liz McCormick, Adam Tempkin, and Alex Harris. And yet, today, not one of them has revealed to the American people that the very same megabanks that were drinking at the Fed’s trough in 2008 were back again at the trough in 2019.
One of the most inquisitive reporters in September 2019 when it came to what had led to the Fed’s hasty interventions in the repo market was Francine McKenna, who at that time reported for the Dow Jones affiliate, MarketWatch. Less than two months later, according to her LinkedIn profile, McKenna no longer worked for MarketWatch. She had gone independent, publishing The Dig, a newsletter at Substack. On November 3, 2019, McKenna reported as follows at The Dig on the ongoing repo crisis:
“One of the opinion writers at Market Watch wrote late last week that the Fed is in ‘stealth’ intervention mode after the Fed injected $99.9 billion in temporary liquidity into the financial system and $7.5 billion in permanent reserves as part of a program to buy $60 billion a month in Treasury bills.
“But market demand for overnight repo operations far exceeded even the $75 billion the Fed allocated. So, on Wednesday, the Fed added $45 billion in addition to the $75 billion repo facility for a daily total of $120 billion.
“There’s nothing stealth about continuing to pump billions into the repurchase market long after it said it would be needed.
“The Fed originally said it planned to conduct daily repo operations until October 10. That intervention has now gone on beyond the end of the month of October with no end in sight.
“Something is cooking but no one who knows what is telling the rest of us who is suddenly chronically illiquid.”
Obviously, the banks that were borrowing the largest sums on a perpetual basis from the Fed were the “chronically illiquid.” JPMorgan Chase and Citigroup’s Citibank are among the largest deposit-taking, federally-insured banks in the U.S. Americans have an urgent need to know why they needed to borrow from the Fed on an emergency basis in the fall of 2019.
We’ve never before seen a total news blackout of a financial news story of this magnitude in our 35 years of monitoring Wall Street and the Fed. (We have, however, documented a pattern of corporate media censoring news about the crimes of Wall Street’s megabanks.)
Theories abound as to why this current story is off limits to the media. One theory goes like this: the Fed has made headlines around the world in recent months over its own trading scandal – the worst in its history. Granular details of just how deep this Fed trading scandal goes have also been withheld from the public as well as members of Congress. If the media were now to focus on yet another scandal at the Fed – such as it bailing out the banks in 2019 because of their own hubris once again – there might be legislation introduced in Congress to strip the Fed of its supervisory role over the megabanks and a restoration of the Glass-Steagall Act to separate the federally-insured commercial banks from the trading casinos on Wall Street.
Why might such an outcome be a problem for media outlets in New York City? Three of the serially charged banks (JPMorgan Chase, Goldman Sachs and Citigroup) are actually owners of the New York Fed – the regional Fed bank that played the major role in doling out the bailout money in 2008, and again in 2019. The New York Fed and its unlimited ability to electronically print money, are a boon to the New York City economy, which is a boon to advertising revenue at the big New York City-based media outlets.