Financial News Stories

Excerpts of Key Financial News Stories in Major Media

Below are key excerpts of revealing news articles on financial corruption from reliable news media sources. If any link fails to function, a paywall blocks full access, or the article is no longer available, try these digital tools.

For further exploration, delve into our comprehensive Banking Corruption Information Center.

Note: This comprehensive list of news stories is usually updated once a week. Explore our full index to revealing excerpts of key major media news stories on several dozen engaging topics. And don't miss amazing excerpts from 20 of the most revealing news articles ever published.

When discussing reserve currency alternatives to the US dollar, conversation almost inevitably returns to the International Monetary Fund’s “synthetic reserve asset,” the Special Drawing Right (SDR). However, the SDR basket of currencies is noticeably antiquated in its design, including only the currencies of industrialized nations. This week, foreign exchange manager Overlay Asset Management [OAM] has announced a currency basket it’s launching in order to offer a more up-to-date “virtual world reserve currency.” According to the Financial Times: “[OAMs] Wealth Preservation Currency Index consists of the currencies of the world’s 15 largest economies, weighted by their gross domestic product, adjusted for purchasing power parity. Overlay’s rationale is that investment portfolios are often heavily exposed to the dollar, but many investors have doubts as to whether the greenback can retain its value and remain the world’s primary reserve currency.” The global “currency war” — as many are calling it — continues to heat up, with no obvious resolution in sight. While it wouldn’t be a simple, quick, or painless process to replace the US dollar as reserve currency, it seems inevitable that calls for just such action are bound to increase, especially if currently loose US monetary policy ... continues unabated.

Note: You can read more details in Financial Times coverage of how a new world currency index has launched.

"Inside Job," as the movie title implies, sees the 2008 financial meltdown, its causes and ongoing catastrophic consequences, as the work of crooks. Crooks as in members of the financial services industry. Aided and abetted by ... administrations of both political stripes, ratings agencies and regulators, all of whom were committed to an ideology that enabled larceny on a grand scale. The documentary, written, produced and directed by Bay Area high-tech entrepreneur turned filmmaker Charles Ferguson, opened in Bay Area cinemas [on October 22]. Even if you've read through the growing pile of books, congressional hearings and material generated by the Financial Crisis Inquiry Commission, it has plenty to remind you why you are furious, all over again. If further proof is needed, the film effectively demolishes the "who knew?" argument proffered by Goldman Sachs Group CEO Lloyd Blankfein and his peers. And it makes a convincing case that much of the obscenely compensated financial services industry has been rotten to the core for decades, but is yet to be held truly accountable for activities, both immoral and illegal.

Note: For lots more from reliable sources on the criminal practices of the largest financial corporations and regulatory agencies which led to the current economic crisis, click here.

Inside the humdrum offices of a tiny trading firm called Tradeworx, workers ... tend high-speed computers that typically buy and sell 80 million shares a day. But on the afternoon of May 6, as the stock market began to plunge in the “flash crash,” someone here walked up to one of those computers and typed the command HF STOP: sell everything and shutdown. Across the country, several of Tradeworx’s counterparts did the same. In a blink, some of the most powerful players in the stock market — high-frequency traders — went dark. The result sent chills through the financial world. After the brief 1,000-point plunge in the stock market that day, the growing role of high-frequency traders in the nation’s financial markets is drawing new scrutiny. Over the last decade, these high-tech operators have become sort of a shadow Wall Street — from New Jersey to Kansas City, from Texas to Chicago. Depending on whose estimates you believe, high-frequency traders account for 40 to 70 percent of all trading on every stock market in the country. Some of the biggest players trade more than a billion shares a day. These are short-term bets. Very short. The founder of Tradebot, in Kansas City, Mo., told students in 2008 that his firm typically held stocks for 11 seconds. Tradebot, one of the biggest high-frequency traders around, had not had a losing day in four years, he said.

Note: For key reports on the dubious practices which underlay the financial crisis and the impoverishment of the public treasury, click here.

As George H. Painter was preparing to retire recently as one of two administrative law judges presiding over investor complaints at the Commodity Futures Trading Commission, he issued an extraordinary request: Please don't assign my pending cases to the other judge. [The CFTC oversees trading of the nation's most important commodities, including oil, gold and cotton.] Painter said Judge Bruce Levine ... had a secret agreement with a former Republican chairwoman of the agency to stand in the way of investors filing complaints with the agency. "On Judge Levine's first week on the job, nearly twenty years ago, he came into my office and stated that he had promised Wendy Gramm, then Chairwoman of the Commission, that we would never rule in a complainant's favor," Painter wrote. "A review of his rulings will confirm that he fulfilled his vow. Judge Levine ... forces pro se complainants to run a hostile procedural gauntlet until they lose hope, and either withdraw their complaint or settle for a pittance, regardless of the merits of the case." Levine was the subject of a story 10 years ago in the Wall Street Journal, which said that except in a handful of cases in which defunct firms failed to defend themselves, Levine had never ruled in favor of an investor. Gramm [wife of former senator Phil Gramm (R-Tex.)], was head of the CFTC just before president Bill Clinton took office. She has been criticized by Democrats for helping firms such as Goldman Sachs and Enron gain influence over the commodity markets. After leaving the CFTC, she joined Enron's board.

Note: For lots more from reliable sources on government corruption, click here.

Compensation on Wall Street is on pace to break a record high for a second consecutive year, as more than three dozen top banks and securities firms will pay $144 billion in salary and benefits ... a 4% increase from the $139 billion paid out in 2009. Compensation was expected to rise at 26 of the 35 firms. Overall, Wall Street is expected to pay 32.1% of its revenue to employees, the same as last year, but below the 36% in 2007. Profits, which were depressed by losses in the past two years, have bounced back from the 2008 crisis. But the estimated 2010 profit of $61.3 billion for the firms surveyed still falls about 20% short from the record $82 billion in 2006. Over that same period, compensation across the firms in the survey increased 23%. "Until focus of these institutions changes from revenue generation to long-term shareholder value, we will see these outrageous pay packages and compensation levels," said Charles Elson, director of the Weinberg Center for Corporate Governance.

Note: For many key reports from reliable sources on Wall Street's profiteering, click here.

Chris Miller nearly doubled his $3,500 stock investment in a renewable-energy firm in 2008. It was a perfectly legal bet, but he's no ordinary investor. Mr. Miller is the top energy-policy adviser to Nevada Democrat and Senate Majority Leader Harry Reid, who helped pass legislation that wound up benefiting the firm. Mr. Miller isn't the only Congressional staffer making such stock bets. At least 72 aides on both sides of the aisle traded shares of companies that their bosses help oversee, according to a Wall Street Journal analysis of more than 3,000 disclosure forms covering trading activity by Capitol Hill staffers for 2008 and 2009. The Journal analysis showed that an aide to a Republican member of the Senate Banking Committee bought Bank of America Corp. stock before results of last year's government stress tests eased investor concerns about the health of the banking industry. A top aide to the House Speaker profited by trading shares of Freddie Mac and Fannie Mae in a brokerage account with her husband two days before the government authorized emergency funding for the companies. The aides identified by the Journal say they didn't profit by making trades based on any information gathered in the halls of Congress. Even if they had done so, it would be legal, because insider-trading laws don't apply to Congress. Unlike many Executive Branch employees, lawmakers and aides don't have restrictions on their stock holdings and ownership interests in companies they oversee.

Note: Why is Congress exempt from so many of its own laws? Who is willing to start a movement to stop this? For lots more on government corruption from major media sources, click here.

U.S. companies are rebounding quickly from the recession and posting near-historic profits, the result of aggressively re-tooling their operations to cope with lower revenue and an uncertain outlook. An analysis by The Wall Street Journal found that companies in the Standard & Poor's 500-stock index posted second-quarter profits of $189 billion, up 38% from a year earlier and their sixth-highest quarterly total ever, without adjustment for inflation. For all U.S. companies, the Commerce Department estimates second-quarter after-tax profits rose to an annual rate of $1.208 trillion, up 3.9% from the first quarter and up 26.5% from a year earlier. That annual rate is the highest on record, though it doesn't account for inflation. As a percentage of national income, after-tax profits were the third-highest since 1947, surpassed only by two quarters in 2006, near the peak of the last economic expansion. The data indicate that big companies are recovering from the downturn faster and more strongly than the overall economy, helping send stock prices higher this year. To achieve that performance, companies laid off hundreds of thousands of workers, closed less-profitable units, shifted work to cheaper regions and streamlined processes. Despite the hefty profits, executives aren't expected to boost spending on new employees, products and equipment anytime soon. "We've focused on permanent changes that won't have to be undone as sales improve," said John Riccitiello, chief executive of Electronic Arts.

Note: For highly revealing reports on income inequality, click here.

A mushrooming crisis over potential flaws in foreclosure documents is threatening to throw the real estate industry into chaos as Bank of America [today] became the first bank to stop taking back tens of thousands of foreclosed homes in all 50 states. The move ... adds to growing concerns that mortgage lenders have been evicting home­owners using flawed court papers, without verifying the information in them. Bank of America Corp., the nation’s largest bank, said [its decision] applies to homes that the bank takes back itself and those that it transfers to investors such as mortgage giants Fannie Mae and Freddie Mac. The bank did so in reaction to mounting pressure from public officials inquiring about the accuracy of foreclosure documents. A document obtained last week by The Associated Press showed a Bank of America official acknowledging in a legal proceeding that she signed thousands of foreclosure documents a month and typically didn’t read them. The official, Renee Hertzler, said in a February deposition that she signed up to 8,000 such documents a month.

Note: For any who might be facing home foreclosure, don't miss the CNN News clip with important advice from a courageous congresswoman available here. For many key reports from reliable sources on the corrupt practices of major banks, click here.

The world's wealthiest people have responded to economic worries by buying gold by the bar -- and sometimes by the ton -- and by moving assets out of the financial system, bankers catering to the very rich said [today]. Fears of a double-dip downturn have boosted the appetite for physical bullion as well as for mining company shares and exchange-traded funds, UBS executive Josef Stadler told the Reuters Global Private Banking Summit. "They don't only buy ETFs or futures; they buy physical gold," said Stadler, who runs the Swiss bank's services for clients with assets of at least $50 million to invest. UBS is recommending top-tier clients hold 7-10 percent of their assets in precious metals like gold, which is on course for its tenth consecutive yearly gain and traded at around $1,314.50 an ounce [today], near the record level reached last week. Julius Baer's chief investment officer for Asia is also recommending that wealthy investors park some of their assets in gold as a defensive stance following a string of lackluster U.S. data and amid concerns about currency weakness.

Note: Gold has increased from under $300/oz at the time of 9/11 to over $1,300 in Oct. 2010. Is it a bubble, or a sign that our economy could be collapsing?

For months, companies have been sitting on the sidelines with record piles of cash. Now they're starting to deploy some of that money - not to hire workers or build factories, but to prop up their share prices. Sitting on these unprecedented levels of cash, U.S. companies are buying back their own stock in droves. So far this year, firms have announced they will purchase $273 billion of their own shares, more than five times as much compared with this time last year, according to Birinyi Associates, a stock market research firm. But the rise in buybacks signals that many companies [do not plan to] spend their cash on the job-generating activities that could produce economic growth. "They don't know what they want to do with all the cash they're sitting on," said Zachary Karabell, president of RiverTwice Research. Historically low interest rates are also prompting some companies to borrow to repurchase shares. Microsoft, for instance, borrowed $4.75 billion last month by issuing new bonds at rock-bottom interest rates and announced it would use some of that money to buy back shares. The company already has nearly $37 billion in cash. A share buyback is a quick way to make a stock more attractive to Wall Street. It improves a closely watched metric known as earnings per share, which divides a company's profit by the total number of shares on the market. Such a move can produce a sudden burst of interest in a stock, improving its price.

Note: For lots more from reliable sources on the massive profiteering by corporate recipients of government financial largesse, click here.

Italian authorities froze nearly Ł20 million belonging to the Vatican’s bank on [September 21] in an unprecedented investigation into alleged money-laundering by the Holy See. It was the first time that such action has been taken against the bank, which is formally known as the IOR or Institute for Religious Works. Prosecutors placed the bank’s director-general and its chairman under investigation in connection with two allegedly suspicious transactions which may have breached Italy’s anti-money laundering laws. Investigators have spent more than a year scrutinising millions of euros of Vatican bank transactions to see if they violated regulations. The Vatican bank’s chairman, Ettore Gotti Tedeschi ... was placed under investigation. He is not being investigated for laundering money but for omitting to disclose key information. The Vatican expressed “the utmost confidence” in the bank’s senior executives, including Mr Gotti Tedeschi. A member of the conservative religious movement Opus Dei, he has spoken out on the need for more morality in financing. Mr Gotti Tedeschi is a close adviser to Italy’s finance minister, Giulio Tremonti. The IOR manages the Vatican’s finances as well as the accounts of Catholic organisations and religious orders.

Note: This unprecedented case shows that big things are happening behind the scenes. There is much more here than catches the eye.

"The Conehead economy" [is] the idea that if the economy were a person, its growth over the past few decades would've turned it from a normal-looking individual into a conehead. Jacob Hacker and Paul Pierson get at this idea slightly differently [in their book Winner-Take-All Politics]. They've got a table showing how incomes would look if growth had been equally shared from 1979 to 2006 -- much as it was in the decades before 1979. If growth had been equally shared, the middle quintile would be making $64,395 today. Instead, they're making $52,100. That's a 23 percent raise those folks didn't get -- and that I'm sure they would've noticed. The top 1 percent ... made, on average, $1,200,300 in 2006. If growth had been equally shared in the three decades before that, however, their incomes would've been cut by more than half, down to $506,002. That's real, serious money we're talking about. The top 1 percent now accounts for 23.5 percent of the national income if you include capital gains. In 1979, they only had 9.8 percent of the nation's earnings. During that same period, tax rates on the richest Americans have actually dropped. So as the economy went one way -- toward more money going to the rich -- the tax system went the other.

Note: For lots more on income inequality from reliable sources, click here.

An intelligence analyst named Eitan Arusy [at the district attorney's office in Manhattan] began studying a slim lead. Suspicious money was flowing to and from an Iranian nonprofit. Mr. Arusy's probe, later merged with a Justice Department inquiry, ultimately widened to some of Europe's vaunted banks, helping spark a global inquiry that found they actively evaded U.S. law in aiding sanctioned countries, banks or other enterprises move some $2 billion undetected. Nine banks have been caught up in the probe. These weren't rogue operations. The investigators discovered that the banks ran dedicated units to systematically aid the undetected transfer of money through the U.S. banking system. They did that by removing identifying coding on fund transfers so they could evade automated U.S. bank computer systems designed to spot money flowing from a sanctioned state. The far-reaching inquiry started small. Mr. Arusy arrived at the district attorney's office in 2005 to help ferret out illegal financing tied to the Middle East. Though the office prosecutes everyday crime, it carved out a role infiltrating crimes tied to the city's financial markets and institutions. Its expertise dates to the 1990s, when it led the investigation of Bank of Credit & Commerce International, or BCCI, which collapsed in a fraud and money-laundering scandal.

Note: For a treasure trove of articles from reliable sources revealing the criminality of many major financial corporations, click here.

Fidel Castro is showcasing a theory long popular both among the far left and far right: that the shadowy Bilderberg Group has become a kind of global government, controlling not only international politics and economics, but even culture. The 84-year-old former Cuban president published an article [on August 18 to quote] from a 2006 book by Lithuanian-born writer Daniel Estulin. Estulin's work, The True Story of the Bilderberg Group, argues that the international group largely runs the world. It has held a secretive annual forum of prominent politicians, thinkers and businessmen since it was founded in 1954 at the Bilderberg Hotel in Holland. Estulin's book, as quoted by Castro, described "sinister cliques and the Bilderberg lobbyists" manipulating the public "to install a world government that knows no borders and is not accountable to anyone but its own self." The prominence of the group is what alarms critics. It often includes members of the Rockefeller family, Henry Kissinger, senior U.S. and European officials and major international business and media executives. Castro -- who had an inside seat to the Cold War -- has long expressed suspicions of back-room plots. He has raised questions about whether the Sept. 11 attacks were orchestrated by the U.S. government to stoke military budgets and, more recently suggested that Washington was behind the March sinking of a South Korean ship blamed on North Korea.

Note: For lots more on secret societies like the Bildergroup, click here.

[An] IMF paper [that] first came out in April, 2010, [a]uthored by Reza Moghadam, director of the IMF’s strategy, policy and review department, ... discusses how the IMF sees the International Monetary System evolving after the financial crisis. In the eyes of the IMF ... the best way to ensure the stability of the international monetary system (post crisis) is actually by launching a global currency. And that, the IMF says, is largely because [sovereign nations] cannot be trusted to redistribute surplus reserves, or battle their deficits, themselves. The ongoing buildup of such imbalances, meanwhile, only makes the system increasingly vulnerable to shocks. It’s also a process that’s ultimately unsustainable for all, says the IMF. All in all, the IMF believes there has simply been too much reserve hoarding going on. A global currency makes the most sense, the paper concludes — especially since the SDR [Special Drawing Rights] is currently just an accounting tool that draws on the freely usable currencies of member states, not an actual currency itself.

Note: For key news articles on the global financial crisis to which this IMF report is responding, click here.

The head of China’s largest credit rating agency has slammed his western counterparts for causing the global financial crisis and said that as the world’s largest creditor nation China should have a bigger say in how governments and their debt are rated. “The western rating agencies are politicised and highly ideological and they do not adhere to objective standards,” Guan Jianzhong, chairman of Dagong Global Credit Rating, told the Financial Times. “China is the biggest creditor nation in the world and with the rise and national rejuvenation of China we should have our say in how the credit risks of states are judged.” On the corporate side, Mr Guan argues Moody’s Investors Service, Standard & Poor’s and Fitch Ratings – the three companies that dominate the global credit rating industry – have become too close to the clients they are supposed to be objectively assessing. He specifically criticised the practice of “rating shopping” by companies who offer their business to the agency that provides the most favourable rating. In the aftermath of the financial crisis “rating shopping” has been one of the key complaints from western regulators , who have heavily criticised the big three agencies for handing top ratings to mortgage-linked securities that turned toxic when the US housing market collapsed in 2007.

Note: For key news articles on the global financial crisis, click here.

AT&T Inc. and Verizon Wireless, the biggest U.S. mobile carriers, are planning a venture to displace credit and debit cards with smartphones, posing a new threat to Visa Inc. and MasterCard Inc., three people with direct knowledge of the plan said. The trial would be the carriers’ biggest effort to spur mobile payments in the U.S. and supplant more than 1 billion plastic cards in American wallets. Smartphones have encroached on tasks ranging from Web browsing to street navigation and now may help the phone companies compete with San Francisco-based Visa and MasterCard, the world’s biggest payments networks. The service, similar to those already available in Japan, Turkey and the U.K., would use contactless technology to complete purchases in stores. They’d be processed through Discover’s payments network, currently the fourth-biggest behind Visa, MasterCard and American Express Co. Barclays would be the bank helping to manage the accounts, said the people, who requested anonymity because of confidentiality agreements. Retailers may be eager to help another network after years of fighting over transaction fees set by Visa and MasterCard.

Goldman Sachs sent $4.3 billion in federal tax money to 32 entities, including many overseas banks, hedge funds and pensions, according to information made public [on July 23]. Goldman Sachs disclosed the list of companies to the Senate Finance Committee after a threat of subpoena from Sen. Chuck Grassley, R-Ia. Goldman Sachs received $5.55 billion from the government in fall of 2008 as payment for then-worthless securities it held in AIG. Goldman had already hedged its risk that the securities would go bad. It had entered into agreements to spread the risk with the 32 entities named in Friday's report. Overall, Goldman Sachs received a $12.9 billion payout from the government's bailout of AIG, which was at one time the world's largest insurance company. Goldman Sachs also revealed to the Senate Finance Committee that it would have received $2.3 billion if AIG had gone under. Other large financial institutions, such as Citibank, JPMorgan Chase and Morgan Stanley, sold Goldman Sachs protection in the case of AIG's collapse. Those institutions did not have to pay Goldman Sachs after the government stepped in with tax money. Shouldn't Goldman Sachs be expected to collect from those institutions "before they collect the taxpayers' dollars?" Grassley asked. "It's a little bit like a farmer, if you got crop insurance, you shouldn't be getting disaster aid."

Note: For lots more from reliable sources on the Wall Street bailout by taxpayers, click here.

A 2004 study of the results of stock trading by United States Senators during the 1990s found that Senators on average beat the market by 12% a year. In sharp contrast, U.S. households on average underperformed the market by 1.4% a year and even corporate insiders on average beat the market by only about 6% a year during that period. A reasonable inference is that some Senators had access to – and were using – material nonpublic information about the companies in whose stock they trade. Under current law, it is unlikely that Members of Congress can be held liable for insider trading. The proposed Stop Trading on Congressional Knowledge Act addresses that problem by instructing the Securities and Exchange Commission to adopt rules intended to prohibit such trading. This article analyzes present law to determine whether Members of Congress, Congressional employees, and other federal government employees can be held liable for trading on the basis of material nonpublic information. It argues that there is no public policy rationale for permitting such trading and that doing so creates perverse legislative incentives and opens the door to corruption. The article explains that the Speech or Debate Clause of the U.S. Constitution is no barrier to legislative and regulatory restrictions on Congressional insider trading.

Note: Do you think that these highly successful investors in the US Senate might have a vested interest in protecting the existing financial and legal structure that makes their profits possible and protects them from criminal charges?

This is the story of how some of the richest people in the world – Goldman, Deutsche Bank, the traders at Merrill Lynch, and more – have caused the starvation of some of the poorest people in the world. At the end of 2006, food prices across the world started to rise, suddenly and stratospherically. Within a year, the price of wheat had shot up by 80 per cent, maize by 90 per cent, rice by 320 per cent. In a global jolt of hunger, 200 million people – mostly children – couldn't afford to get food any more, and sank into malnutrition or starvation. There were riots in more than 30 countries, and at least one government was violently overthrown. Then, in spring 2008, prices just as mysteriously fell back to their previous level. Jean Ziegler, the UN Special Rapporteur on the Right to Food, calls it "a silent mass murder", entirely due to "man-made actions." Through the 1990s, Goldman Sachs and others lobbied hard and the regulations [controlling agricultural futures contracts] were abolished. Suddenly, these contracts were turned into "derivatives" that could be bought and sold among traders who had nothing to do with agriculture. A market in "food speculation" was born. The speculators drove the price through the roof.

Note: Some researchers speculate that the global elite are aware that alternative energies will eventually replace oil, which has been a prime means of control and underlying cause of many wars in recent decades. So as a replacement for oil, the elite and their secret societies are increasingly targeting control of the world's food supply through terminator crops which produce no seed, and through the patenting of seeds.

Important Note: Explore our full index to revealing excerpts of key major media news stories on several dozen engaging topics. And don't miss amazing excerpts from 20 of the most revealing news articles ever published.