Goldman Sachs Shines Up Its Swamp Creature Reputation by Rehiring Robert Kaplan as Vice Chairman – the Guy Who Traded Like a Hedge Fund Kingpin While President of the Dallas Fed

By Pam Martens and Russ Martens: May 9, 2024

The swampiest trading house on Wall Street, Goldman Sachs, issued a press release on Tuesday which was revolting – even to Wall Street veterans who are familiar with its scandalous history. (See Related Articles below.)

The press release stated that “Rob Kaplan will rejoin the firm as Vice Chairman of Goldman Sachs and a member of the Management Committee. He will be a member of the Executive Office and will be based in Dallas.”

Robert (Rob) Kaplan is the man who scandalized the Dallas Fed and the Federal Reserve (the central bank of the United States) by flagrantly serving his own trading interests and violating financial reporting rules while trading like a hedge fund kingpin in S&P 500 futures for his own account during a declared National Emergency in 2020 (from the COVID-19 pandemic) while he was President of the Dallas Fed (one of the 12 regional Federal Reserve Banks).

Fed Balance Sheet QT: -$1.60 Trillion from Peak, to $7.36 Trillion, Lowest since December 2020

by Wolf Richter • May 2, 2024

Quantitative Tightening has removed 38% of Treasury securities and 27% of MBS that pandemic QE had added.

By Wolf Richter for WOLF STREET.

Total assets on the Fed’s balance sheet fell by $77 billion in April, to $7.36 trillion, the lowest since December 2020, according to the Fed’s weekly balance sheet today. Since the end of QE in April 2022, the Fed has shed $1.60 trillion.

After months of talking about it, the Fed has now clarified officially when, how, and by how much it will slow QT. They’re trying to get the balance sheet down as far as possible without blowing anything up, and easy will do it, that’s the hope.

Starts in June

Cap for Treasury runoff reduced to $25 billion from $60 billion

Cap for MBS runoff unchanged at $35 billion

Buckle Up, The Commodities Bull Market is Here

Dear Reader,

What’s about to unfold in the global financial markets will be referred to as,

“The golden bull market of the century”

You’ll be bombarded with headlines about how economic instability and soaring inflation are propelling the price of gold to unprecedented heights.

As a result, countless investors and funds will turn to gold, pushing its value to unparalleled levels.

Central banks and individuals alike will seek gold as a safeguard against diminishing currency value.

This is all happening, right now.

You, however, will be one step ahead, understanding that this gold surge is long-anticipated and a result of years of groundwork.

This shift signifies a major transfer of global wealth, offering substantial gains for those who act early.

Forget waiting for insights from the media, financial advisors, or governments. It’s crucial for you to understand and prepare for this shift.

But, it’s also important to remember that a massive bull market like this is going to make a lot of money for those who position themselves right.

The Best Way to Play Offense and Defense in the Markets

Is this a “good” or “bad” economy?

It’s like one of those inkblot tests psychologists give patients to learn about their state of mind.

When folks in the “bad” camp look at the economy, they see high inflation… rising interest rates… and collapsing banks.

Folks in the “good” camp see record-low unemployment.

And they’re both right to a degree…

To say the economy is good and bad at the same time isn’t a neat answer. But it’s the reality of the situation.

That means it’s more important now than ever that you play offense and defense in your portfolio.

So today we’ll look at why this is so critical. Then we’ll go over the necessary steps for you to apply this to your own wealth-building plan.

Diversification Is Key to Your Portfolio Performance

When you’re diversified, you have eggs in different baskets…

You don’t have all your money in only stocks… cash… bonds… real estate… gold… or crypto.

Instead, you make sure you own a mix of these different asset classes. (That’s Wall Street speak for a group of investments with similar characteristics.)

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

By Pam Martens and Russ Martens

Federal Reserve Building, Washington, D.C.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 at higher interest rates, they become more attractive and the current market value of the low-yielding fixed-rate bonds fall. U.S. Treasuries and agency MBS guarantee principal at maturity but if the securities have to be sold prior to maturity they will be sold at their current market value. This is what triggered the death spiral at Silicon Valley Bank in March of last year.