Courtesy of Pam Martens.
Federal Reserve Chairman Jerome Powell Gives Testimony Before the House Financial Services Committee on February 27, 2018
The U.S. Federal Reserve, the country’s central bank that is supposed to serve the interests of the nation, gave the largest Wall Street banks a big, irresponsible gift yesterday. The big banks will now be able to spend approximately $170 billion buying back their own stock and paying out increased dividends to shareholders instead of doing what banks are supposed to do: make loans to worthy businesses to stimulate the U.S. economy. But don’t expect to find that critical news on the front page of your local newspaper.
The front pages of newspapers across America proved once again today that chaos in the running of the Federal government is dominating news reporting while it continues to relegate to the back pages the alarming risks that are growing again on Wall Street. This raises the question as to whether the chaos is a bug or a feature of this presidency. Let’s not forget that numerous Goldman Sachs veterans have been installed in this administration while Federal regulators come from the ranks of Wall Street or its lawyers.
President Donald Trump’s ability to pick another U.S. Supreme Court Justice, his upcoming summit with Russian President Vladimir Putin in the midst of a Special Counsel criminal probe of the Trump campaign’s ties to Russian involvement in the 2016 U.S. election, and the babies and toddlers that remain separated from their immigrant parents under Trump’s recent, illegal, separation of families immigration policy fill today’s front pages.
According to the Federal Reserve’s announcement yesterday, under its stress test known as the Comprehensive Capital Analysis and Review (CCAR), the biggest Wall Street banks will be able to dramatically expand a technique of manipulating their own share price through share buybacks and richer dividend payouts.
The news was announced by the Fed at 4:30 p.m. yesterday and the banking behemoths could barely contain themselves before publicly boasting of their big buyback and dividend plans. Citigroup announced it would spend $22 billion in buybacks and dividend boosts over the next year, an increase of $3.1 billion from a year ago. Citigroup said $17.6 billion of that $22 billion would go to buybacks of its stock.
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