Courtesy of Pam Martens.
Why are the mega Wall Street banks throwing gasoline on the fire of this stock market rout?
One of the damndest things in Wall Street history happened last week. No, we’re not talking about the Dow and S&P having the largest drop in the first week of the New Year in history, although that was certainly noteworthy. We’re talking about those mega Wall Street banks that can rarely bring themselves to put out a sell rating on a stock they follow, deciding to throw gasoline on a plunging stock market last week by issuing negative outlooks.
A cynical person (like someone who has just seen The Big Short movie) might be inclined to suspect that the Wall Street banks have gotten their short positions in place and are now ready to make some serious fast money.
Bloomberg News ran an article last Tuesday, in the midst of the rout, headlined: “Citi Has Cut U.S. Stocks to Underweight.” Citi is short for Citigroup, the mega Wall Street bank that crashed in 2008 and would have burned to the ground except for the largest taxpayer bailout in U.S. history. The article reveals this:
“In a note published on Monday, a team of Citi analysts led by equity strategist Robert Buckland pointed to the end of easing by the Federal Reserve as a key reason for the bank’s downgrade of U.S. equities.”
Citigroup’s prior executives currently sit as Secretary of the U.S. Treasury who also heads the Financial Stability Oversight Council (Jack Lew) and Vice Chairman of the Federal Reserve (Stanley Fischer).
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