Financial News Articles
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The former Countrywide Financial Corp., whose subprime loans helped start the nation's foreclosure crisis, made hundreds of discount loans to buy influence with members of Congress, congressional staff, top government officials and executives of troubled mortgage giant Fannie Mae, according to a House report. The report ... said the discounts from January 1996 to June 2008 were not only aimed at gaining influence for the company but to help mortgage giant Fannie Mae. Countrywide's business depended largely on Fannie, which ... was responsible for purchasing a large volume of Countrywide's subprime mortgages. "Documents and testimony obtained by the committee show the VIP loan program was a tool used by Countrywide to build goodwill with lawmakers and other individuals positioned to benefit the company," the report said. "In the years that led up to the 2007 housing market decline, Countrywide VIPs were positioned to affect dozens of pieces of legislation that would have reformed Fannie" and its rival Freddie Mac, the committee said. The Justice Department has not prosecuted any Countrywide official, but the House committee's report said documents and testimony show that Mozilo and company lobbyists "may have skirted the federal bribery statute by keeping conversations about discounts and other forms of preferential treatment internal. Rather than making quid pro quo arrangements with lawmakers and staff, Countrywide used the VIP loan program to cast a wide net of influence."
Note: For a treasure trove of reliable reports on the criminality and corruption within the financial and banking industries, click here.
The Deputy Governor of the Bank of England encouraged Barclays to try to lower interest rates after coming under pressure from senior members of the last Labour government, documents have disclosed. A memo published by Barclays suggested that Paul Tucker gave a hint to Bob Diamond, the banks chief executive, in 2008 that the rate it was claiming to be paying to borrow money from other banks could be lowered. His suggestion followed questions from senior figures within Whitehall about why Barclays was having to pay so much interest on its borrowings, the memo states. Barclays and other banks have been accused of artificially manipulating the Libor rate, which is used to set the borrowing costs for millions of consumers, businesses and investors, by falsely stating how much they were paying to borrow money. The bank claimed yesterday that one of its most senior executives cut the Libor rate only at the height of the credit crisis after intervention from the Bank of England. The memo, written on Oct 29, 2008, by Mr Diamond and circulated to two other senior bank officials, said: Mr Tucker reiterated that he had received calls from a number of senior figures within Whitehall to question why Barclays was always toward the top end of the Libor pricing. Government sources suggested that Baroness Vadera, one of Gordon Browns closest colleagues, was responsible for the contact with the Bank of England.
Note: For deeply revealing and reliable major media reports on corruption and criminality in the operations and regulation of the financial sector, click here.
Wall Street has already watered down or delayed most of Dodd-Frank [financial reform act]. Now it wants to create a giant loophole, exempting its foreign branches from the law. Yet the overseas branches of Wall Street banks are where the banks have done some of their wilder betting. Four years ago, bad bets by American International Group's London office nearly unraveled the U.S. financial system. When the Commodity Futures Trading Commission, the main regulator of derivatives (bets on bets), recently proposed extending Dodd-Frank to the foreign branches of Wall Street banks, the banks screamed. "If JPMorgan overseas operates under different rules than our foreign competitors," warned Jamie Dimon, chairman and CEO of JPMorgan, Wall Street will lose financial business to the banks of nations with fewer regulations, allowing "Deutsche Bank to make the better deal." This is the same Jamie Dimon who chose London as the place to make highly risky derivatives trades that have lost the firm upward of $2 billion so far - and could leave American taxpayers holding the bag if JPMorgan's exposure to tottering European banks gets much worse. JPMorgan's risky betting in London is added proof that unless the overseas operations of Wall Street banks are covered by U.S. regulations, giant banks will hide irresponsible bets overseas. Squadrons of Wall Street lawyers and lobbyists have been pressing all the agencies charged with implementing Dodd-Frank to go easy on the Street.
Note: The author of this article, Robert Reich, is former U.S. secretary of labor, professor of public policy at UC Berkeley and the author of Aftershock: The Next Economy and America's Future. He blogs at www.robertreich.org.
Five of the biggest banks in the United States are putting finishing touches on plans for going out of business as part of government-mandated contingency planning that could push them to untangle their complex operations. The plans, known as living wills, are due to regulators no later than July 1 under provisions of the Dodd-Frank financial reform law designed to end too-big-to-fail bailouts by the government. The living wills could be as long as 4,000 pages. Since the law allows regulators to go so far as to order a bank to divest subsidiaries if it cannot plan an orderly resolution in bankruptcy, the deadline is pushing even healthy institutions to start a multi-year process to untangle their complex global operations, according to industry consultants. JPMorgan Chase, Bank of America, Citigroup, Goldman Sachs and Morgan Stanley are among those submitting the first liquidation scenarios to regulators at the Federal Reserve and the Federal Deposit Insurance Corp. The liquidation plans are coming amid renewed questions about the safety of big banks following JPMorgan's stunning announcement last month that a trading debacle has cost it more than $2 billion.
Note: For other key major media articles showing blatant financial corruption, click here. For more vitally important information on banking manipulations, explore the excellent, reliable information in our Banking Corruption Information Center available here.
The Trans-Pacific Partnership (TPP) may soon be an acronym as recognizable as NAFTA but this free trade venture could have much more economic strength and impact than its North American predecessor. The Trans-Pacific Partnership is a free trade deal aimed at further expanding the flow of goods, services and capital across borders. Its four founding members New Zealand, Chile, Singapore and Brunei soon caught the attention of five other nations: the United States, Australia, Peru, Vietnam and Malaysia, who joined in 2008. The nine partners currently have a combined GDP of more than $17 trillion. Canada and Mexico are now being considered for membership, subject to the approval of the nine countries already involved. Add to this the possibility that Japan could join the TPP, despite mounting protests in that country, and the economic and political traction of the group increases. In fact, the TPP could become the world's largest free-trade zone. "It's really a trade agreement for the one per cent and their corporate interests," said Maude Barlow, the National Chairperson of the Council of Canadians, which opposed and continues to criticize NAFTA. "This is not going to be a good deal for Canadians."
Note: A later Toronto Star article reveals that the agreements of the TPP are secret.
When Jamie Dimon, CEO of JPMorgan Chase Bank, appeared before the Senate Banking Committee on June 13, he was wearing cufflinks bearing the presidential seal. Was Dimon trying to send any particular message by wearing the presidential cufflinks? asked CNBC editor John Carney. Was he . . . subtly hinting that hes really the guy in charge? The groveling of the Senators was so obvious that Jon Stewart did a spoof news clip on it. JPMorgan Chase is the biggest campaign donor to many of the members of the Banking Committee. Financial analysts Jim Willie and Rob Kirby think it may be something far larger, deeper, and more ominous. They contend that the $3 billion-plus losses in London hedging transactions that were the subject of the hearing can be traced, not to European sovereign debt (as alleged), but to the record-low interest rates maintained on U.S. government bonds. The national debt is growing at $1.5 trillion per year. Ultra-low interest rates must be maintained to prevent the debt from overwhelming the government budget. Near-zero rates also need to be maintained because even a moderate rise would cause multi-trillion dollar derivative losses for the banks, and would remove the banks chief income stream, the arbitrage afforded by borrowing at 0% and investing at higher rates. The low rates are maintained by interest rate swaps, called by Willie a derivative tool which controls the bond market in a devious artificial manner.
Note: We don't usually use alternet.org as a reliable source, but because the major media failed to ask the hard, very important questions posed in this article, we've included it here. For powerful reports on financial corruption, click here.
There's been a lot of speculation about the cufflinks [JPMorgan Chase CEO] Jamie Dimon wore during [his Congressional] testimony. They caught the eye of folks because they seemed to bear some sort of official government stamp. As it turns out, they were emblazoned with the seal of the President of the United States. CNN's Lizzie O'Leary first confirmed the story last night over Twitter. They were, in fact, a gift from a resident of the White House. But people close to the JPMorgan Chase CEO won't say which president gave them to him. Dimon's got a bunch of official U.S. government cufflinks. Search for images of him and you'll see FBI cufflinks, for example. Was Dimon trying to send any particular message by wearing the presidential cufflinks? Was he, for instance, trying to remind the Democrats he supported Obama? Or subtly hinting that he's really the guy in charge?
Note: For powerful reports on financial corruption, click here.
The average American family's net worth dropped almost 40% between 2007 and 2010, according to a triennial study released [on June 11] by the Federal Reserve. The stunning drop in median net worth -- from $126,400 in 2007 to $77,300 in 2010 -- indicates that the recession wiped away 18 years of savings and investment by families. The results ... highlight the marked deterioration in household finances brought on by the financial crisis and ensuing recession. Much of the drop off in net worth -- to levels not seen since 1992 -- was attributable to a sharp decline in housing values, the Fed said. In 2007, the median homeowner had a net worth of $246,000. Three years later that number had fallen to $174,500, a loss of more than $70,000 on average. Making matters worse, income levels also fell during the tumultuous three-year period, with median pre-tax income falling 7.7% as earnings from capital gains all but disappeared. The loss of income and net worth appears to have impacted savings rates, as the number of Americans who said they saved in the prior year fell from 56.4% in 2007 to 52.0% in 2010 -- the lowest level recorded since the early 1990s. Families in the top 10% of income actually saw their net worth increase over the period, rising from a median of $1.17 million in 2007 to $1.19 million in 2010. Middle-class families who ranked in the 40th to 60th percentile of income earners reported that their median net worth fell from $92,300 to $65,900 over the same time period.
Note: What this article fails to emphasize sufficiently is that while most people have lost vast amounts of wealth, the wealthiest 1% has grown incredibly richer even through the recession. Is something wrong here? For key reports from reliable sources on wealth inequality, click here.
Congress gets into the JPMorgan Chase affair Tuesday with the first in a series of hearings into how a federally insured bank incurred [huge] losses on the kind of risky bets some, mistakenly, thought were a thing of the past. The losses, as suspected, look to be far higher than the $2 billion initially estimated. As of Friday, the number was $5 billion. What did CEO Jamie Dimon know, and when did he know it? "Dimon personally approved the concept behind the disastrous trades," according to the Wall Street Journal. Reportedly, similar trades, involving credit derivatives, date to 2006, ramping up with ever bigger bets as risk controls were eased in 2011.On the one hand, JPMorgan and other U.S. corporations are banking record profits and ever-growing piles of cash - $2 trillion at last count. On the other, U.S. unemployment remains unacceptably high, people are still losing their homes, small businesses are screaming for credit, local governments are cutting services left and right, and the nation's infrastructure is crumbling. Tons of money [are] sloshing around, courtesy of the Federal Reserve, but banks and corporations ... are hoarding it.
Note: For lots more from reliable sources on corruption and criminality in the finance industry, click here.
What strikes Phil Angelides the most about the $2 billion (and counting) loss sustained by JPMorgan Chase on a big trade gone bad, is how little has changed since the financial crash of 2008. "The big banks continue to be casinos," said the chairman of the government-appointed Financial Crisis Inquiry Commission, which laid out how such trades, referred to in some quarters as "bets," contributed to the crash that the country is still struggling to pull itself out of. "It has to be stopped," he said. Trouble is - as Angelides, the former California state treasurer, and others point out - no one is stopping them. Jamie Dimon, JPMorgan's CEO, dismissed initial concerns about the trades last month as a "complete tempest in a teapot." His main concern, he told analysts, was how the affair "plays right into the hands of a bunch of pundits out there." Dimon was referring to those who have been pushing for regulations to prevent federally insured banks like JPMorgan from indulging in such trades in the first place. "They've been fighting a ferocious rear-guard, no-holds-barred action," said Angelides, referring to the army of lobbyists hired and millions of dollars spent to beat back the regulations. The Securities and Exchange Commission is investigating the trades, which involved the use of complex financial instruments called credit default swaps as a hedge against the value of U.S. bonds.
Note: For a most excellent two-minute video of former U.S. Labor Secretary Robert Reich presenting five of the most urgent problems with the economy and an easy solution all in two minutes, click here. For an enlightening five-minute TED talks video further showing how the rich getting richer while they pay increasingly less taxes is at the root of most economic woes, click here. For a treasure trove of revealing reports from reliable sources on the criminality and corruption of major financial corporations and their "regulators" in government, click here.
The $2 billion trading loss that JPMorgan Chase disclosed late on Thursday provided ample ammunition for supporters of the Volcker Rule, which would restrict government-backed banks' ability to conduct proprietary trading. But it also prompted a fair amount of finger-wagging toward the company, given JPMorgan's stance as one of the rule's fiercest opponents. JPMorgan has been among the most outspoken detractors of the proposed financial regulation that is making its way through Washington. The firm has laid bare its feelings about the Volcker Rule several times, including in a Feb. 13 comment letter to the Federal Reserve. In that document, JPMorgan argued that the proposal would restrict its efforts to rein in risk-taking and would harm the firm's ability to compete against foreign rivals that did not face the same restrictions. In the letter, JPMorgan specifically mentions its chief investment office, the trading group which caused the $2 billion trading loss. JPMorgan also happens to run one of the most active and best-financed lobbying operations within the commercial banking industry. In the first four months of 2012, the firm has spent $1.92 million, barely trailing Wells Fargo in terms of banks' lobbying expenses. Last year, JPMorgan spent $7.62 million; two years ago, it spent $7.41 million, the most in its industry. And JPMorgan's chief, Jamie Dimon has been among the most frequent visitors to Washington to press his case.
Note: For lots more from major media sources on the corruption of major financial corporations, click here.
The Rothschild dynasty is to merge its British and French banking operations to secure long-term control of the business and to boost the firm's financial strength ahead of the introduction of tougher capital requirements for banks. The 200-year-old banks will be reunited under a single shareholding that will bring together the fortunes of the French and English sides of the renowned family as they attempt to safeguard the business against the effects of new regulation and the fallout from the global financial crisis. Paris Orleans, the Rothschild Group's Paris-based holding company, will convert into a French limited partnership, securing the families' control of the bank against potential takeovers. The new partnership will then buy out minority investors in NM Rothschild & Sons, the UK business, as well as outstanding minority interests in the French operations. Paris Orleans has a market value of more than 500m (415m) and is about 30pc owned by outside investors. The Rothschild Group employs 3,000 people in 42 countries and is one of the world's leading independent investment banks, advising some of the largest international companies on capital raisings and mergers and acquisitions. The bank also remains a player in the private equity industry and operates several merchant banking operations that invest directly in business across Europe and the rest of the world.
Note: Why is that these two hugely wealthy families get so little press coverage? Could it be that their wealth and influence exerts control over the major media? For more on secret societies which command huge hidden power, see the deeply revealing reports from reliable major media sources available here.
The Vatican has for the first time appeared on the U.S. State Departments list of money-laundering centres. It was added to the list because it was considered vulnerable to money-laundering. To be considered a jurisdiction of concern merely indicates that there is a vulnerability to a financial system by money launderers. With the large volumes of international currency that goes through the Holy See, it is a system that makes it vulnerable as a potential money-laundering center, Susan Pittman of the State Departments Bureau of International Narcotics and Law Enforcement, told Reuters. The Vatican Bank, founded in 1942 by Pope Pius XII, has been in the spotlight since September 2010 when Italian investigators froze 23 million euros ($33 million) in funds in Italian banks after opening an investigation into possible money-laundering. The bank said it did nothing wrong and was just transferring funds between its own accounts. The money was released in June 2011 but the investigation is continuing. Two months ago, Italian newspapers published leaked internal letters which appeared to show a conflict among top Vatican officials about just how transparent the bank should be about dealings that took place before it enacted its new laws. The Vatican Bank was formally known as the Institute for Works of Religion (IOR) and was entangled in the collapse 30 years ago of Banco Ambrosiano, with its lurid allegations about money-laundering, freemasons, mafiosi and the mysterious death of Ambrosiano chairman Roberto Calvi - Gods banker.
Note: For more on the Vatican money-laundering scandal, click here. For speculation on the role of secret societies in all of this, click here.
The Italian police ... arrested eight people on charges related to the seizure of $6 trillion in fake United States Treasury bonds, in a mysterious scheme that stretched from Hong Kong to Switzerland to the southern Italian region of Basilicata. The value of the seized bonds is in the neighborhood of half of the United States entire public debt of $15.36 trillion, but only the uninitiated would have accepted them as real securities. Rather than counterfeit, they were what officials call fictitious, printed in 6,000 units of $1 billion each, a denomination that does not exist and the equivalent of $3 bills. The United States Embassy in Rome said its experts had examined the bonds, which bore the date 1934, and determined that they were fictitious and apparently part of a scheme intended to defraud Swiss banks. According to the Federal Reserve, such fictitious instrument fraud is increasingly common, and unwitting investors have been cheated of nearly $10 billion in recent years. In a common ploy, criminals present fictitious financial instruments such as Federal Reserve notes, standby letters of credit, prime bank guarantees or prime bank notes in order to fraudulently collateralize loans, the Federal Reserve says on its Web site. In 2009, Italian police seized phony United States Treasury bonds with a face value of $250 billion.
Note: There is a major problem with the claim that these are fake. If you were a counterfeiter and wanted to fake bonds, you would have to be out of your mind to fake them in denominations of $1 billion. As reported here, no one would ever dream of cashing them. For excellent research by David Wilcock suggesting that the bonds are real, and that this may be part of a huge, hidden manipulation, click here.
[A] report from San Francisco auditors [shows] that 84 percent of foreclosures examined contained at least one violation of the law by the foreclosing party. The report is only the latest in a series of incidents involving bad actors in the foreclosure crisis. In fact, problems have been so rampant that banks now require many buyers of foreclosed homes to sign contracts absolving the bank of liability should irregularities appear with the original foreclosure. In light of these negligent practices, the $26 billion settlement last week between the U.S. Department of Justice, state attorneys general and the major banks raises as many questions as answers. For instance: If a house is illegally foreclosed upon and subsequently sold by the bank, who owns the home? The new buyer or the original owner? Untangling this mess might require new consumer protections, not just a payout from the banks accused of wrongdoing. The best way to prevent foreclosure problems, however, has always been to prevent foreclosures in the first place. Offering families facing foreclosure the same bankruptcy protections enjoyed by business speculators is one place to start. As it stands today, a single family that buys a home in a housing development is treated differently in bankruptcy court than a businessman who bought 10 units in the same project. If and when the housing bubble bursts, the underwater speculator is able to seek bankruptcy relief on all 10 units, while the owner of the single home is left out in the cold.
Note: For lots more from reliable sources on the impacts of the financial crisis on homeowners, click here.
European Union diplomats and the European Parliament agreed ... to overhaul regulation of the roughly $700 trillion derivatives market, a move that will make it easier to control one of the most opaque areas of finance. Under new EU laws, banks, hedge funds and other buyers and sellers of derivatives will be encouraged to move away from the unregulated 'over-the-counter' market, which accounts for almost 95 percent of all trades. In the past, it has been common for multi-million-euro contracts to be recorded by no more than a fax, with only the parties involved aware of the details. This will change under the new law, which would standardise most trading so it happens on open exchanges. Settlement of such deals will be cleared centrally, making them easier to monitor. Those that do not shift to exchanges or a central counterparty such as LCH Clearnet in London, which acts as an intermediary between buyer and seller, will face higher capital charges to reflect the extra risk. Crucially, the new rules mean that all deals must be recorded, whether conducted on or off an exchange. Supervisors hope that will make it easier to monitor the market and intervene, if necessary, to avoid a repeat of the chaos surrounding the 2008 collapse of Lehman Brothers, where it proved difficult to assess exposure to derivatives. By forcing increased transparency, the rules are likely to challenge the half a dozen or so large banks that dominate the market now.
Note: For key reports on the grave risks posed by the unregulated derivatives market, click here.
I am not here to cheer you up. The situation is about as serious and difficult as Ive experienced in my career, [George] Soros tells Newsweek. We are facing an extremely difficult time, comparable in many ways to the 1930s, the Great Depression. We are facing now a general retrenchment in the developed world, which threatens to put us in a decade of more stagnation, or worse. The best-case scenario is a deflationary environment. The worst-case scenario is a collapse of the financial system. Soros draws on his past to argue that the global economic crisis is as significant, and unpredictable, as the end of Communism. To Soros, the spectacular debunking of the credo of efficient markets the notion that markets are rational and can regulate themselves to avert disaster is comparable to the collapse of Marxism as a political system. Understanding, he says, is key. Unrestrained competition can drive people into actions that they would otherwise regret. The tragedy of our current situation is the unintended consequence of imperfect understanding. A lot of the evil in the world is actually not intentional. A lot of people in the financial system did a lot of damage without intending to. Still, Soros believes the West is struggling to cope with the consequences of evil in the financial world just as former Eastern bloc countries struggled with it politically. Is he really saying that the financial whizzes behind our economic meltdown were not just wrong, but evil? Thats correct.
Note: For lots more from major media sources on the criminal practices of the biggest banks and financial firms and the collusion of government agencies, see our "Banking Bailout" newsarticles.
The corporate barbarians are through the gate of American democracy. Not satisfied with their all-pervasive influence on our culture, economy and legislative processes, they want more. They want it all. Two years ago, the United States supreme court betrayed our Constitution. In its now infamous decision in the Citizens United case, five justices declared that corporations must be treated as if they are actual people under the Constitution when it comes to spending money to influence our elections, allowing them for the first time to draw on the corporate checkbook in any amount and at any time to run ads explicitly for or against specific candidates. What's next a corporate right to vote? When the supreme court says ... that corporations are people, that writing checks from the company's bank account is constitutionally-protected speech and that attempts by the federal government and states to impose reasonable restrictions on campaign ads are unconstitutional, our democracy is in grave danger. Corporations are not people with constitutional rights equal to flesh-and-blood human beings. Corporations are subject to regulation by the people.
Note: For key reports on the overpowering influence of corporate money on the US political system, click here and here.
At a packed City Council meeting ... Los Angeles lawmakers Tuesday called for more regulations on how much corporations can spend on political campaigns. The vote in support of state and federal legislation that would end so-called "corporate personhood is largely symbolic. The council resolution includes support for a constitutional amendment that would assert that corporations are not entitled to constitutional rights, and that spending money is not a form of free speech. City Council President Eric Garcetti, the resolution's sponsor, said such actions are necessary because big special interest money is behind much of the gridlock in Washington. He blamed a 2010 U.S. Supreme Court decision, Citizens United vs. the Federal Election Commission, which rolled back legal restrictions on corporate spending on the grounds that political speech by a business entity should receive the same 1st Amendment protections that people do. It allows corporations and other groups to spend unlimited money on behalf of candidates. Councilman Richard Alarcon, who also supported the resolution, said corporations are trying to take over every aspect of our lives. Corporations are at the wheel of America, Alarcon said. And they are driving us to destruction.
Note: Why was this key decision only reported in a blog and hardly covered by the media elsewhere? To understand how the media controls public debate, as reported by top journalists, click here.
Why give our money to Bank of America, only to have it lend us our own money at high interest rates or with ridiculous fees? We could hold onto our money, save quite a bit in fees, and lend it back to ourselves and to the businesses and people ... at more affordable rates. In 2008, Ellen Brown authored The Web of Debt, an analysis of the U.S. banking system that now is even more pertinent in light of the Occupy Wall Street movement. The thesis is that the power to create money has been usurped by a private international banking cartel [the Federal Reserve], which issues our money as debt and lends it back to us at interest. The cartel makes it appear that governments are creating our money, and governments get blamed when things go wrong; but they are just pawns of the cartel. We ... can regain our government and our republic only by reclaiming the power to create our own money. We can use the same credit system that private banks use, but administer it as a public utility - that is, monitored and overseen by public servants on the model of libraries and courts. To be a sustainable system, profits need to be returned to the community rather than siphoned off into private coffers.
Note: Few people realize that money in the U.S. is created by an entity privately owned by the largest banks – the Federal Reserve. For lots more important information on this, click here. For lots more from major media sources on the collusion between financial interests and government, click here.
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