By Matt Goldstein
It’s too soon to say whether the recent madness on Wall Street will drive away ordinary investors from the stock market, but the trend lines certainly aren’t looking good.
In the past two weeks, retail investors pulled $17.4 billion out of U.S. equity mutual funds, according to the mutual fund information service Lipper. But the exodus from stock funds really began in late 2008 at the height of the financial crisis. And the move of retail money out of stock funds continued through 2009, even as the markets bottomed and rallied back.
Today’s special report, “Pension fund scandal shakes up Venezuelan oil giant,” examines state oil company PDVSA and the problems it has exploiting what are said by OPEC to be the world’s largest known reserves of crude oil.
At the heart of the latest scandal is a Connecticut hedge fund manager named Francisco Illarramendi who has pleaded guilty to multiple counts of wire fraud, securities and investment advisor fraud. Prosecutors say he ran a Ponzi scheme that lost up to half a billion dollars, most of it money that had been entrusted to Illarramendi by PDVSA’s pension fund.
Laurence Fletcher and a team of reporters from Canberra to the small town of Apache Junction in Arizona have a special report today that is the latest in our series “Shell Games,” exploring the extent and impact of corporate secrecy in the United States and beyond.
“The bonds that turned to dust” tracks the fate of $500 million of highly illiquid paper purportedly issued by a company in a trailer-park suburb of Phoenix, on behalf of a small Australian commodities firm — and backed by the proceeds from $10 billion of diesel from the tiny autonomous Russian republic of Bashkortostan.
Today’s special report “The perils of Paulson” takes a look at hedge fund king John Paulson, who shot to fame by calling the U.S. housing market crash in 2007, and making a lot of money out of it. This year, his funds are not doing so well.
This graphic tells the story — while Paulson may have reduced his stakes in the companies concerned, the size of his holdings will have made it difficult to unload in full.
Back in December, a Reuters investigation examined the ties between economists who testify to Congress on financial regulation and big financial institutions.
A Reuters review of 96 testimonies given by 82 academics to the Senate Banking Committee and the House Financial Services Committee between late 2008 and early 2010 — as lawmakers debated the biggest overhaul of financial regulation since the 1930s — found no clear standard for disclosure.
Steven Barnett, professor of communications at London’s Westminster University, spoke for a lot of people when he said of the news: ”Astonishing. I’m completely gobsmacked. Talk about a nuclear option.”
On Tuesday, a Reuters Special Report called “A Little House of Secrets on the Great Plains ” explored the questionable – and sometimes illegal practices – of several businesses incorporated at a single-family home in Cheyenne, Wyoming. The 1,700-sq. ft, brick house is the address of a business incorporation specialist called Wyoming Corporate Services, which has set up more than 2,000 companies there, according to incorporation records.
The article launched a Reuters series which will explore the extent and impact of corporate secrecy in the U.S., which stands in stark contrast to its call for greater transparency in global transactions to lift the veil on shadowy money flows.
A Reuters exclusive today describes a method China used recently to hide some of its U.S. Treasury purchases – “US caught China buying more Treasuries than disclosed.”
Treasury officials said they were simply modernizing outdated procedures two years ago when they revamped the rules for participating in government bond auctions.
Part one, a special report by Brian Grow and Kelly Carr, focuses on a little house in Cheyenne, Wyoming that is home to more than 2,000 companies.
It seems every day brings news of another data breach, from defense firms to banks and even the U.S. Senate.