Financial News ArticlesExcerpts of Key Financial News Articles in Media
The more aggressively a bank lobbied before the financial crisis, the worse its loans performed during the economic downturn -- and the more bailout dollars it received, according to a study published by the National Bureau of Economic Research this week. The report, titled "A Fistful of Dollars: Lobbying and the Financial Crisis," said that banks' lobbying efforts may be motivated by short-term profit gains, which can have devastating effects on the economy. "Overall, our findings suggest that the political influence of the financial industry played a role in the accumulation of risks, and hence, contributed to the financial crisis," said the report, written by three economists from the International Monetary Fund. Data collected by the three authors -- Deniz Igan, Prachi Mishra and Thierry Tressel -- show that the most aggressive lobbiers in the financial industry from 2000 to 2007 also made the most toxic mortgage loans. They securitized a greater portion of debt to pass the home loans onto investors and their stock prices correlated more closely to the downturn and ensuing bailout. The banks' loans also suffered from higher delinquencies during the downturn.
Just under three years ago, people in the village of Gumbi in western Malawi went unexpectedly hungry. Not like Europeans do if they miss a meal or two, but that deep, gnawing hunger that prevents sleep and dulls the senses when there has been no food for weeks. Oddly, there had been no drought, the usual cause of malnutrition and hunger in southern Africa, and there was plenty of food in the markets. For no obvious reason the price of staple foods such as maize and rice nearly doubled in a few months. Unusually, too, there was no evidence that the local merchants were hoarding food. It was the same story in 100 other developing countries. There were food riots in more than 20 countries and governments had to ban food exports and subsidise staples heavily. A new theory is emerging among traders and economists. The same banks, hedge funds and financiers whose speculation on the global money markets caused the sub-prime mortgage crisis are ... taking advantage of the deregulation of global commodity markets [to make] billions from speculating on food and causing misery around the world. As food prices soar again to beyond 2008 levels, it becomes clear that everyone is now being affected. Food prices are now rising by up to 10% a year in Britain and Europe. What is more, says the UN, prices can be expected to rise at least 40% in the next decade.
Note: Remember that speculation is behind almost all of the economic bubbles and busts. The price of oil spiked a couple years ago almost purely because of speculators, while the oil companies raked in record profits. It looks like the speculators are now driving food prices as high as they can. For a treasure trove of reports from reliable sources investigating the many different strategies used by financial corporations to enrich themselves at the expense of common people, click here.
"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.
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.
Mark Pittman, an investigative reporter for Bloomberg News ... filed a Freedom of Information Act request with the Federal Reserve Board, seeking the details of its unprecedented efforts to funnel money to the collapsing banks of Wall Street. That was in September 2008. Just more than a year later, Mr. Pittman ... died unexpectedly at age 52. But his cause has persevered. It is now known as Bloomberg L.P. v. Board of Governors of the Federal Reserve, an attempt to unlock the vault of the largest Wall Street rescue plan in decades — or, as the legal briefs put it, to “break down a wall of secrecy” that the Fed has kept in place for nearly two years in its “controversial use of public money to prop up financial institutions.” The Federal Reserve has wrapped itself in secrecy since the turn of the 20th century, when a select group of financiers met at the private Jekyll Island Club off the eastern coast of Georgia and, forgoing last names to preserve their anonymity among the staff, drafted legislation to create a central bank. Its secrecy, of course, persists today, with Ben S. Bernanke, the Federal Reserve chairman, refusing to tell even Congress which banks received government money under the bailout. There is also a heated battle to force the Fed to disclose its role in the controversial attempt to save the insurance giant American International Group.
Note: Isn't it interesting that Pittman died at age 52 while trying to expose manipulations of the big bankers? For a one-minute video proving the existence of a secret weapon which can cause an undetectable heart attack, click here. For a concise, excellent background on the hidden role of the Federal Reserve, click here.
If you want to encourage the kind of conspiracy theories that have prospered in the wake of last year’s financial crisis — those that describe a secret cabal of elites running the world — try doing the following: Have a group of 30 high-powered economists, government officials and bankers meet under the auspices of an international group that shares ideas on how to run the global financial architecture. Have your Board of Trustees led by an influential former Federal Reserve chairman who’s now working as a senior advisor to the president of the United States. Name the former vice chairman of bailout behemoth AIG as the group’s Chairman and CEO (It helps that he [is] former governor of the Bank of Israel). Ensure that membership includes the likes of these: A former Treasury Secretary and president of Harvard who also now works as a top presidential economic advisor; Citigroup’s senior vice chairman; a former IMF deputy managing director and the current governor of the Bank of Israel; and top representatives of the world’s four most important central banks. Hold two days of closed-door meetings at the New York Fed. Do not publicize a list of attendees and leave everyone guessing about the agenda. These were the circumstances surrounding Friday’s start to the 62nd plenary meetings of the Group of 30, whose formal name is “The Consultative Group on International Economic and Monetary Affairs, Inc.”
Note: The article interestingly then goes on to claim that this secret meeting of the world's top bankers is not really anything to worry about, that they are really working for the public good. If so, why not have the meeting open and widely covered by the press? For many other revealing articles from major media reports on secret societies and secret meetings of the most rich and powerful people in our world, click here.
Twice a year, the chairmen and chief executives of Europe's biggest banks gather in secret. They meet under the auspices of a hush-hush club formed after World War II, whose operations are so mysterious that even the grandees who attend it seem unclear what it's really called. One bank supremo told me its name was the Instituts d'Etudes Financieres ... another that it went by the moniker IIEB. Either way, what I can tell you is that it attracts a pretty high calibre of banker - and that its last meeting was just a few weeks ago at the plush London hotel, Claridges, where the main item on the agenda was the topical question of bankers' bonuses. Present were ... Stephen Green of HSBC, Philip Hampton of RBS, Marcus Agius of Barclays and David Mayhew of JP Morgan Cazenove, and their counterparts from Germany, Italy, France and so on. Now, let's be clear: the idea that banks would ever collude to solve a mutual problem would be an outrageous and unwarranted slur. That said, they would dearly love a collective agreement to cease hostilities on bankers' pay, because they know there is a one-to-one correlation between each million pound bonus they pay and damage to their reputations. But although they explored whether they could reach an entente on capping bankers' pay, they abandoned the ambition as a hopeless cause. Why? Because they can't get the Americans into the room. So what is the going rate for RBS's top profit generators? Last year, when the bonus pool was Ł900m [over $1.3 billion] for the investment bank, several hundred of its executives earned more than a million pounds each. [This year] quite a number of its top traders will be expecting $10m plus.
Note: You can bet that the money for this year's bonuses is coming out of taxpayers' pockets through the huge bailouts. So here is yet another secret meeting of the world's top bankers not being reported in the major media except for this BBC blog. For many other revealing articles from major media reports on secret societies and secret meetings of the most rich and powerful people in our world, click here.
JUDGE ANDREW NAPOLITANO, HOST: Despite growing pressure from the House and ordinary people, the Senate decided not to increase scrutiny on the Federal Reserve. They actually blocked a bid on procedural grounds to have the Government Accountability Office audit the Federal Reserve and issue a report. Here is Republican Senator Jim DeMint. Senator DeMint, ... Why should the Federal Reserve be audited? DEMINT: Well, the value of our dollar, our whole economic system, rides on [this] unelected, secret agency called the Federal Reserve. We're not sure what they're doing right now. And Ron Paul in the House with over half of the House signing up as cosponsors, and me and Bernie Sanders in the Senate are pushing the idea of a complete audit of the Federal Reserve, because frankly, a lot of us here in this country and around the world, are concerned that we're going to destroy the American dollar and the worldwide reserve currency. NAPOLITANO: How is it that legislation that has more than half the members of the House behind it and is proposed by a staunch conservative Republican like you and then independent socialists like Bernie Sanders is stopped on the floor of the Senate cold before you can even formally introduce it, before you can make a speech in favor of it? DEMINT: Well, if we could get the Federal Reserve under control, it would make it more difficult for the Obama administration, I think, to carry out the continued spending and growing of debt. Because one thing we're concerned about is the Federal Reserve ... will do what we call monetize the debt, basically print money, buy our own debt as a country, and devalue the dollar that way.
Note: For two powerful, short videos revealing efforts to expose the intriguing secrets of the Federal Reserve, click here and here. If you care about the financial health of the U.S. and its implications in our world, these are both must watch videos.
President Obama must stop the bailouts and start the prosecutions. It's time to focus on anti-poverty programs to protect the growing unemployed from hunger and homelessness. Stealth payments to billionaire bondholders must cease immediately. Since the mid-1970s, average Americans' wages have stayed flat when adjusted for inflation. Productivity rose, profits rose, but not wages. To compensate for stagnant wages and the desire to consume more each year, Americans worked more, retired later, spouses went to work, and many burned savings. Then they started borrowing. Debt became America's growth industry. The scheme collapsed because Americans' wages weren't sufficient to pay the interest on existing debts. The administration and the banks keep talking about a credit crisis, but there isn't one. Banks are lending. If you want a mortgage and can afford to pay it back, you can borrow at low rates today. But most Americans don't want more debt because it is a debilitating path to poverty. The average American family already pays 14 percent of annual income in interest to banks. To fix this fake crisis, there are fake discussions about what the government must do. The endlessly recycled plan to buy "troubled" assets isn't to get banks lending again, because they haven't stopped lending. The plan seeks for taxpayers to buy worthless assets at high prices to absorb rich investors' losses. That's it. It keeps coming back as a different plan, but with that same goal. There is no goal beyond that one goal: keep rich people from taking losses.
Note: For an extensive archive of key reports on the hidden realities of the Wall Street bailout, click here.
The revelation that Bernard Madoff — brilliant investor (or so almost everyone thought), philanthropist, pillar of the community — was a phony has shocked the world, and understandably so. The scale of his alleged $50 billion Ponzi scheme is hard to comprehend. Yet ... how different, really, is Mr. Madoff’s tale from the story of the investment industry as a whole? The financial services industry has claimed an ever-growing share of the nation’s income over the past generation, making the people who run the industry incredibly rich. Yet, at this point, it looks as if much of the industry has been destroying value, not creating it. And it’s not just a matter of money: the vast riches achieved by those who managed other people’s money have had a corrupting effect on our society as a whole. Last year, the average salary of employees in “securities, commodity contracts, and investments” was more than four times the average salary in the rest of the economy. Earning a million dollars was nothing special, and even incomes of $20 million or more were fairly common. The incomes of the richest Americans have exploded over the past generation, even as wages of ordinary workers have stagnated. High pay on Wall Street was a major cause of that divergence. Wall Street’s ill-gotten gains corrupted and continue to corrupt politics, in a nicely bipartisan way. From Bush administration officials ... who looked the other way as evidence of financial fraud mounted, to Democrats who still haven’t closed the outrageous tax loophole that benefits executives at hedge funds and private equity firms ... politicians have walked when money talked. The pay system on Wall Street lavishly rewards the appearance of profit, even if that appearance later turns out to have been an illusion.
Note: This entire, penetrating article is well worth a read at the link above. For many revealing reports from reliable sources on the realities of the Wall Street bailout, click here.
The Bush administration backed off proposed crackdowns on no-money-down, interest-only mortgages years before the economy collapsed, buckling to pressure from some of the same banks that have now failed. It ignored remarkably prescient warnings that foretold the financial meltdown, according to an Associated Press review of regulatory documents. "Expect fallout, expect foreclosures, expect horror stories," California mortgage lender Paris Welch wrote to U.S. regulators in January 2006, about one year before the housing implosion cost her a job. Bowing to aggressive lobbying - along with assurances from banks that the troubled mortgages were OK - regulators delayed action for nearly one year. By the time new rules were released late in 2006, the toughest of the proposed provisions were gone and the meltdown was under way. The administration's blind eye to the impending crisis is emblematic of its governing philosophy, which trusted market forces and discounted the value of government intervention in the economy. Its belief ironically has ushered in the most massive government intervention since the 1930s. Many of the banks that fought to undermine the proposals by some regulators are now either out of business or accepting billions in federal aid to recover from a mortgage crisis they insisted would never come. In 2005, faced with ominous signs the housing market was in jeopardy, bank regulators proposed new guidelines for banks writing risky loans. Those proposals all were stripped from the final rules.
Note: For many revealing reports on the Wall Street bailout from reliable sources, click here.
I spent Sunday afternoon brooding over a [New York Times] front-page article, entitled ["Citigroup Saw No Red Flags Even as It Made Bolder Bets”]. In searing detail it exposed ... how some of our country’s best-paid bankers were overrated dopes who had no idea what they were selling, or greedy cynics who did know and turned a blind eye. But it wasn’t only the bankers. This financial meltdown involved a broad national breakdown in personal responsibility, government regulation and financial ethics. So many people were in on it: People who had no business buying a home, with nothing down and nothing to pay for two years; people who had no business pushing such mortgages, but made fortunes doing so; people who had no business bundling those loans into securities and selling them to third parties, as if they were AAA bonds, but made fortunes doing so; people who had no business rating those loans as AAA, but made fortunes doing so; and people who had no business buying those bonds and putting them on their balance sheets so they could earn a little better yield, but made fortunes doing so. Citigroup was involved in, and made money from, almost every link in that chain. And the bank’s executives, including ...the former Treasury Secretary Robert Rubin, were ... so ensnared by the cronyism between the bank’s risk managers and risk takers (and so bought off by their bonuses) that they had no interest in stopping it. These are the people whom taxpayers bailed out on Monday to the tune of what could be more than $300 billion.
Note: For many revealing reports on the Wall Street bailout from major media sources, click here.
“Chase recently received $25 billion in federal funding. What effect will that have on the business side and will it change our strategic lending policy?” It was Oct. 17, just four days after JPMorgan Chase’s chief executive, Jamie Dimon, agreed to take a $25 billion capital injection courtesy of the United States government, when a JPMorgan employee asked that question [during] an employee-only conference call. The JPMorgan executive who was moderating the employee conference call didn’t hesitate to answer. “What we ... think it will help us do is perhaps be a little bit more active on the acquisition side or opportunistic side for some banks who are still struggling. I think there are going to be some great opportunities for us to grow in this environment, and I think we have an opportunity to use that $25 billion in that way.” Read that answer as many times as you want — you are not going to find a single word in there about making loans to help the American economy. On the contrary: It is starting to appear as if one of Treasury’s key rationales for the recapitalization program — namely, that it will cause banks to start lending again — is a fig leaf, Treasury’s version of the weapons of mass destruction. In fact, Treasury wants banks to acquire each other and is using its power to inject capital to force a new and wrenching round of bank consolidation. Treasury would even funnel some of the bailout money to help banks buy other banks. And, in an almost unnoticed move, it recently put in place a new tax break, worth billions to the banking industry, that has only one purpose: to encourage bank mergers. As a tax expert, Robert Willens, put it: “It couldn’t be clearer if they had taken out an ad.”
Note: Was the real purpose of the "bailout" to strengthen the biggest banks by enabling them to gobble up the smaller ones at the public's expense? No wonder the legislation was rushed through without discussion! For lots more highly revealing reports on the Wall Street bailout, click here.
For a few days an obscene proportion of the world's wealth and clout will be concentrated in one normally obscure Alpine town, [Davos, Switzerland]. Some 27 heads of state or government; 113 cabinet ministers; hundreds of chief executives, bankers, sovereign wealth fund managers, economists and the media: about 2,500 participants in all. So who's coming and what will they be chattering about? The official co-chairs of the Forum are mostly well-known names: Tony Blair, of JP Morgan; James Dimon, chairman and CEO of JP Morgan; KV Kamath, MD and CEO of India's ICICI Bank; Henry Kissinger, chairman of Kissinger Associates; Indra K Noovi, chairman and CEO of PepsiCo; David J O'Reilly, chairman and CEO of Chevron Corporation; and Wang Jianzhou, CEO of China Mobile Communications Corporation. The prominent role allotted to Mr Wang, while not entirely novel, is nonetheless significant. In 2008, for the first time, China will contribute more to the growth of the world economy than the United States. Double-digit growth in China should still just be possible this year, and it alone seems to stand between the world and a full-blown recession. Sovereign wealth funds (SWFs) from China and elsewhere have already been busy re-capitalising the West's stricken banks. The recycling of trillions of dollars of trade surpluses and petro dollars means that such deals will become more prevalent.
Note: Yet these meetings are kept largely secret. Why isn't the media giving lots more coverage to this gathering of some of the most powerful people on the planet? For other reliable, verifiable reports on secret meetings of the power elite of the world, click here.
The market for derivatives grew at the fastest pace in at least nine years to $516 trillion in the first half of 2007, the Bank for International Settlements said. Credit-default swaps, contracts designed to protect investors against default and used to speculate on credit quality, led the increase, expanding 49 percent to cover a notional $43 trillion of debt in the six months ended June 30, the BIS said in a report published late yesterday. Derivatives of debt, currencies, commodities, stocks and interest rates rose 25 percent from the previous six months, the biggest jump since the Basel, Switzerland-based bank began compiling the data. Investors have been turning to credit derivatives as a way to speculate on a growing risk of defaults amid record U.S. mortgage foreclosures. The money at risk through credit-default swaps increased 145 percent from last year to $721 billion, the report said. The amount at stake in the entire derivatives market is $11.1 trillion, according to the BIS, which was formed in 1930 to monitor financial markets and regulate banks. Derivatives are financial instruments derived from stocks, bonds, loans, currencies and commodities, or linked to specific events like changes in interest rates or the weather. The report is based on contracts traded outside of exchanges in over-the- counter market.
Note: Like most reporting in the major media, this article trivializes the massive size of the derivatives market. $516 trillion is equivalent to $75,000 for every man, woman, and child in the world! Do you think the financial industry is out of control? For lots more powerful, reliable information on major banking manipulations, click here. For a powerful analysis describing just how crazy things have gotten and giving some rays of hope by researcher David Wilcock, click here.
The most important--and unfortunately the least debated--issue in politics today is our society's steady drift toward a class-based system, the likes of which we have not seen since the 19th century. America's top tier has grown infinitely richer and more removed over the past 25 years. Few among them send their children to public schools; fewer still send their loved ones to fight our wars. They own most of our stocks, making the stock market an unreliable indicator of the economic health of working people. The top 1% now takes in an astounding 16% of national income, up from 8% in 1980. The tax codes protect them, just as they protect corporate America, through a vast system of loopholes. Incestuous corporate boards regularly approve compensation packages for chief executives and others that are out of logic's range. As this newspaper has reported, the average CEO of a sizeable corporation makes more than $10 million a year, while the minimum wage for workers amounts to about $10,000 a year, and has not been raised in nearly a decade. When I graduated from college in the 1960s, the average CEO made 20 times what the average worker made. Today, that CEO makes 400 times as much. Trickle-down economics didn't happen. Wages and salaries are at all-time lows as a percentage of the national wealth. This ever-widening divide is too often ignored or downplayed by its beneficiaries. A sense of entitlement has set in among elites, bordering on hubris.
Note: For some reason the Wall Street Journal has removed this article. You can read it on the website of the article's author at this link.
ENRON: The Smartest Guys in the Room [is] the inside story of one of history’s greatest business scandals, in which top executives of America’s seventh largest company walked away with over one billion dollars while investors and employees lost everything. Based on the best-selling book ... this tale of greed, hubris and betrayal reveals the outrageous personal excesses of the Enron hierarchy and the moral vacuum that led CEO Ken Lay - along with other players including accounting firm Arthur Andersen, Chief Operating Officer Jeffrey Skilling and Chief Financial Officer Andy Fastow - to manipulate securities trading, bluff the balance sheets and deceive investors. By 2000, the company has grown into the largest natural gas merchant in North America, eventually branching out into trading other commodities. Jeff Skilling is named CEO, and the company stock skyrockets. Meanwhile, Skilling’s “black box” accounting results in declared earnings of 53 million dollars for a collapsing deal that doesn’t profit a cent. And Enron’s West Coast power desk has its most profitable month ever as California citizens become casualties of Enron’s scheme to artificially increase demand for electricity, resulting in rolling blackouts and two deaths. When Enron’s sleight of hand accounting and unethical trading eventually meet the realities of balance sheets that don’t balance and products that don’t exist, unwitting employees who have anchored their financial futures to the Enron ship watch in horror as water rushes in overhead.
Note: Watch this revealing documentary on this webpage. Enron was American's seventh-largest public company and controlled 25 percent of the nation's energy before it failed in 2002. Its stock plummeted from $90 a share to 9 cents a share in a matter of months after fraud was uncovered. For more along these lines, see concise summaries of deeply revealing corporate corruption news articles from reliable major media sources.
The news that the bankers Rothschild are to withdraw from the gold market, in which they have been a major player for two centuries, has been hailed as the end of an era. In one sense, of course, it is. But in another way it marks out the continuation of an even older tradition - the ability of the family which has founded one of the world's largest private banking dynasties to sustain their secretive fortune, which industry insiders count not in billions but in trillions, and keep it within the family. Secrecy has been a hallmark of the Rothschilds from the outset. The Rothschilds created the world of banking as we know it today. [They] invented, or at any rate popularised, the government bond, which allowed investors, big and small, to buy bits of the debts of sovereign states by purchasing fixed-interest bearer bonds. It brought investment in railways, the industrial revolution and ventures like the Suez Canal. The Rothschilds got a cut of everything. They made billions in the 1980s from Margaret Thatcher's privatisations of state-owned industries on which they advised. In France after their bank was nationalised by the Socialist president Francois Mitterrand they slowly built a new business which, under Baron David de Rothschild, has risen to the top ranks of the merger and acquisition league tables. They have pulled out of retail fund management - into which they went with much fanfare only three years back - and now they are pulling out of oil and gold in favour of the higher-margin areas of private banking and wealth management
Note: For some reason this article was removed from the website of the Independent, which is why the above link takes you to a cached version of this revealing article. For more on financial corruption, see the deeply revealing reports from reliable major media sources available here.
The Department of Defense, already infamous for spending $640 for a toilet seat...couldn't account for more than a trillion dollars in financial transactions, not to mention dozens of tanks, missiles and planes. The nonpartisan General Accounting Office has raised the volume of its perennial complaints about the financial woes at Defense, which recently failed its seventh audit in as many years. "Overhauling DOD's financial management operations represent a challenge that goes far beyond financial accounting," GAO chief David Walker told lawmakers. Recent government reports suggest the Pentagon's money management woes have reached astronomical proportions. A GAO report found Defense inventory systems so lax that the U.S. Army lost track of 56 airplanes, 32 tanks, and 36 Javelin missile command launch-units. When military leaders were scrambling to find enough chemical and biological warfare suits to protect U.S. troops, the department was caught selling these suits as surplus on the Internet "for pennies on the dollar," a GAO official said. "We are overhauling our financial management system," said Dov Zakheim, the Pentagon's chief financial officer. "The Pentagon has failed to address financial problems that dwarf those of Enron," said Rep. Henry Waxman, D-Los Angeles. Gregory Kutz, director of GAO's financial management division [said] "I've been to Wal-Mart. They were able to tell me how many tubes of toothpaste were in Fairfax, Va. And DOD can't find its chem-bio suits." Opposition to defense spending is portrayed as unpatriotic. Legislators are often more concerned about winning Pentagon pork than controlling defense waste.
Note: You can read the GAO Report (Page 17 on missing planes). Page two states, "To date, no major part of DOD has yet been able to pass the test of an independent audit." For an intriguing Online Journal article exposing the deep role of the Pentagon's former CFO (Chief Financial Officer) Zakheim in this corruption, click here. Why wasn't and isn't this front page headlines? Why are newspaper editors keeping this most vital information from the public?
Joseph Stiglitz, ex-chief economist of the World Bank, ... was in Washington for the big confab of the World Bank and International Monetary Fund. From sources unnamable (not Stiglitz), we obtained a cache of documents marked, 'confidential' and 'restricted'. Stiglitz helped translate one, a 'country assistance strategy'. There's an assistance strategy for every poorer nation, designed, says the World Bank, after careful in-country investigation. But according to insider Stiglitz, the Bank's 'investigation' involves little more than close inspection of five-star hotels. It concludes with a meeting with a begging finance minister, who is handed a 'restructuring agreement' pre-drafted for 'voluntary' signature. The Bank hands every minister the same four-step programme. Step One is privatisation. Stiglitz said that rather than objecting to the sell-offs of state industries, some politicians - using the World Bank's demands to silence local critics - happily flogged their electricity and water companies. After privatisation, Step Two is capital market liberalisation. Stiglitz calls this the 'hot money' cycle. Cash comes in for speculation in real estate and currency, then flees at the first whiff of trouble. A nation's reserves can drain in days. And when that happens, to seduce speculators into returning a nation's own capital funds, the IMF demands these nations raise interest rates to 30%, 50% and 80%. Step Three: market-based pricing - a fancy term for raising prices on food, water and cooking gas. Step Four: free trade. This is free trade by the rules of the World Trade Organisation and the World Bank, which Stiglitz likens to the Opium Wars. 'That too was about "opening markets",' he said.
Note: For an essay by John Perkins, an insider who was directly involved in these severe manipulations, click here. For deeply revealing reports from reliable major media sources on government collusion in financial corruption, click here.
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