Investors Were Being Blocked from Fund Withdrawals Months Before the Pandemic

America needs a comprehensive investigation of what really triggered this financial crisis.

By Pam Martens and Russ Martens of Wall Street on Parade.

Wall Street On Parade has previously written that a financial crisis was already well under way before the first case of COVID-19 was reported anywhere in the world. This should matter greatly to Americans because the Federal Reserve is attempting to blame the financial crisis on the virus to avoid Congressional investigations of its second epic failure in a dozen years at regulating the behemoth Wall Street banks.

America needs a comprehensive investigation of what really triggered this financial crisis in order to restructure the U.S. financial system away from a casino culture into one that doesn’t regularly need massive Federal Reserve and government bailouts. These bailouts are piling more and more debt on the shoulders of taxpayers and becoming a crushing drag on the U.S. economy, notwithstanding Fed Chairman Jerome Powell’s dismissive remark to Congress that we’ll worry about the debt later.

Today we’re expanding our financial crisis timeline to include pre-COVID-19 announcements of big job cuts at global banks; mutual funds and hedge funds taking the desperate measure of locking out investors from access to their money; and the massive sums investors were pulling from mutual funds and hedge funds throughout 2019 — all prior to the first case of COVID-19 anywhere in the world.

According to the timeline at the World Health Organization, on December 31, 2019, China first reported a cluster of cases of pneumonia which were identified in early January to be the coronavirus now known as COVID-19. This is the timeline of events suggesting that a financial crisis was in the works months before December 31, 2019.

June 3, 2019: The highly-touted $4.7 billion Woodford Equity Income Fund in the U.K. froze withdrawals by investors. It had too many illiquid securities.

July 7, 2019: Deutsche Bank, the large German bank that is heavily intertwined via derivatives with the behemoth Wall Street banks, confirms it is slashing 18,000 jobs.

July 29, 2019: Bloomberg News runs this headline: “Citi to Cut Hundreds of Trading Jobs in Bad Wall Street Omen.”

August 8, 2019: Reuters reported that the amount of foreign sovereign debt carrying negative yields had “increased to an all-time peak of $13.2 trillion.” This was an increase of 13.4 percent from just a month earlier. Large, rapid inflows into government bonds, which drives down the yield, signals a flight to safety from a financial storm.

August 14, 2019: The Wall Street Journal reported that “Investors continued their run on bank stocks, sending shares of some of America’s biggest financial institutions sharply lower following the latest sign of trouble ahead for the U.S. economy.” On this day, the Dow Jones Industrial Average plunges 800.49 points, or 3.05 percent but the shares of two of the biggest Wall Street banks, JPMorgan and Citigroup, significantly outpaced those losses. JPMorgan Chase lost 4.15 percent on the day while Citigroup gave up 5.27 percent. Also on this day, for the first time since the onset of the financial crisis in 2007, the U.S. saw an inversion of the yield curve, with the 2-year Treasury note yielding more than the 10-year note. An inverted yield curve is viewed by market veterans as a harbinger of an economic downturn. Also on this date, the Financial Times reported that Germany’s economy, the economic engine of Europe, had contracted in the second quarter and its annualized growth was now the slowest in six years.

August 30, 2019: Buenos Aires Times reports that more than a dozen “Argentine mutual funds block redemptions as locals rush for exit

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