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posted on 19 October 2016

Early Headlines: Asia Stocks Mostly Up, China GDP Meets Expectations, Ecuador Cut Off Assange Internet, Wells Fargo Fraud For Decade, GOP Senate Trouble And More

Written by Econintersect

Early Bird Headlines 19 October 2016

Econintersect: Here are some of the headlines we found to help you start your day. For more headlines see our afternoon feature for GEI members, What We Read Today, which has many more headlines and a number of article discussions to keep you abreast of what we have found interesting.




  • Ecuador confirms it cut off Assange's internet over Clinton emails (The Hill) The Ecuadorian government confirmed Tuesday that it cut off WikiLeaks founder Julian Assange’s internet connection because of his anti-secrecy platform’s publication of emails allegedly stolen from Hillary Clinton campaign manager John Podesta. The emails are believed to have been stolen by the Russian government and their release has been widely seen as a deliberate attempt to meddle in the U.S. election - although some Republicans have lauded their publication. Ecuador said in a statement:

“The Government of Ecuador respects the principle of non-intervention in the internal affairs of other states. It does not interfere in external electoral processes, nor does it favor any particular candidate. Accordingly, Ecuador has exercised its sovereign right to temporarily restrict access to some of its private communications network within its Embassy in the United Kingdom."


  • Letter warned Wells Fargo of 'widespread' fraud in 2007 - exclusive (CNN Money) See also next article. Former Wells Fargo CEO John Stumpf told Congress under oath last month that he wasn't notified of a serious fake account problem at the bank until 2013. However, CNNMoney has obtained a 2007 letter addressed to Stumpf that warned of widespread "unethical (and illegal) activity" inside Wells Fargo and the "routine deception and fraudulent exploitation of our clients". Eerily, the letter seemed to predict the scandal Wells Fargo is dealing with today. The letter was written by a Wells Fargo (WFC) employee, who had been transferred from the branch after raising sales concerns, and who later won a federal whistleblower retaliation case against the company. The letter said the illegal activity in Northern California was "widespread and so highly encouraged that it has become a normal sales practice" and warned:

"Left unchecked, the inevitable outcome shall be one of professional and reputational damage, consumer fraud and shareholder lawsuits, coupled with regulator sanctions."

“Wall Street is an entity of unbelievable economic and political power. That’s fact. I want to say something and it may sound harsh, not to you, but to the American people. In my view, the business model of Wall Street is fraud. It’s fraud. I believe that corruption is rampant and the fact that major bank after major bank has reached multi-billion dollar settlements with the United States government, when we have a weak regulatory system tells me that not only did we have to bail them out once, if we don’t start breaking them up, we’ll have to bail them out again. I do not want to see that happen."

  • CFTC regulator oversaw compliance at firm accused of illegal trades (Reuters) A U.S. Commodity Futures Trading Commission senior regulator is being thrust into the spotlight after the agency fined her former employer for a supervisory breakdown over illegal wash trades that primarily occurred on her watch. The commission's Sept. 28 civil case against Newedge USA LLC, now fully owned by Societe Generale, makes no mention of Eileen Flaherty, who heads up the agency's office that oversees rules governing chief compliance officers at brokerage firms, among other things. Before Flaherty joined the CFTC in July 2015 as director of the Division of Swap Dealer and Intermediary Oversight, she was the global head of Compliance and Financial Crime Prevention for Newedge from mid-2011 through the end of 2014. The "wash sales," or trades executed between the same buyer and seller, occurred from June 2010 through January 2014, according to the regulator. Such trades are illegal because they can disrupt the integrity of market pricing and fundamentals. The CFTC ordered the firm to pay $750,000 to settle the civil charges. The CFTC's complaint said the firm "lacked an adequate supervisory system and compliance programs" to detect and deter the illegal trades and that it failed to train the firm's staff. It did not, however, name any individuals who might have been responsible for the supervisory failures. Econintersect: How convenient that the person responsible was not charged. Oh yeah ... that person is now a commissioner with the CTFC.

  • State of Ohio to Investigate Satirical Tweet That Fooled Drudge and Limbaugh (The Intercept) Hat tip to Alice Marshall. Those who follow the "chats" on Twitter are very familiar with the "droll, troll, and satire" that abounds there. But some commentators, and even the Ohio Attorney General, apparently are unfamiliar with that social media source.

  • Trump campaign outspending Clinton on TV (The Hill) Donald Trump's presidential campaign is finally spending more money than Hillary Clinton’s. Trump’s campaign will spend almost $11.7 million on television ads set to run in 11 states this week, topping Clinton’s spending on ads for the first time. The Clinton campaign is spending $10.5 million on advertising in seven states. Big spending by a Clinton-backing outside group will mean Democrats are still outspending the GOP overall, but the spending by Trump nonetheless represents a shift for the Republican presidential nominee, who has spent relatively little on television advertising until recently. Trump will drop more than $3.3 million on advertisements in the crucial swing state of Florida this week. The campaign is also spending more than $1 million each in North Carolina, Ohio and Pennsylvania, three states Trump must win if he hopes to reach the 270 electoral votes necessary to take the White House. Trump’s team has also purchased airtime this week in Colorado, Iowa, Maine, New Hampshire, Nevada, Virginia and Wisconsin.

  • A surprisingly high number of first-timers now buying homes (Associated Press) For years, the U.S. housing market looked bleak for young couples hoping to buy their first homes but struggling with high student debt, low pay and meager down-payment savings. But a new survey by the real estate firm Zillow suggests that first-time buyers may be entering the market in greater numbers than industry watchers had assumed. Over the past year, the survey found, nearly half of home sales have gone to first-timers. That's a much higher proportion than some other industry estimates had indicated. And it comes as a surprise in part because ownership rates for adults under 34 are at their lowest levels since the government began tracking the figure in 1994. Zillow's survey results suggest that the trend is shifting, and that some of this year's growth in home sales has come from a wave of college-educated couples in their 30s, who are the most common first-time buyers.

  • Donald Trump Lashes Out at Foreign-Lobbyist Donations, Despite Accepting Them (The Intercept) Newly filed campaign reports show several donations from foreign lobbyists to his own campaign. They are among a tide of other lobbyists, mainstream special-interest groups and consumer-facing companies that have begun to heavily fund Trump’s political campaign, which was previously fueled by small donors.

  • Who will win the Senate? (FiveThirtyEight)



  • RT: NatWest denies shutting accounts of Russian TV channel (BBC News) A British bank has denied reports it closed the UK accounts of RT, Russian state TV's international channel. NatWest said a letter had been sent to one of RT's suppliers, not RT itself, and no accounts had been frozen. RT says that the "supplier", Russia Today TV Ltd, provides all RT services in the UK. It told the BBC that NatWest is the sole banking facility for Russia Today TV Ltd. The Russian embassy in London says it is an "openly political decision". But the UK Treasury said no new sanctions or obligations relating to Russia had been imposed on British banks since February 2015. Econintersect: If this sounds like double talk, we think that's what it is.


  • Islamic State said to use human shields as coalition advances on Mosul (Reuters) Residents of Mosul said Islamic State was using civilians as human shields as Iraqi and Kurdish forces captured outlying villages in their advance on the jihadists' stronghold. The leader of Islamic State was reported to be among thousands of hardline militants still in the city, suggesting the group would go to great lengths to repel the coalition. With attacking forces still between 20 and 50 km (12-30 miles) away, residents reached by telephone said more than 100 families had started moving from southern and eastern suburbs most exposed to the offensive to more central parts of the city.

  • U.S. expects Islamic State to wield chemical weapons in Mosul fight (Reuters) The United States expects Islamic State to use crude chemical weapons as it tries to repel an Iraqi-led offensive on the city of Mosul, U.S. officials say, although adding that the group's technical ability to develop such weapons is highly limited. U.S. forces have begun to regularly collect shell fragments to test for possible chemical agents, given Islamic State's use of mustard agent in the months before Monday's launch of the Mosul offensive, one official said. In a previously undisclosed incident, U.S. forces confirmed the presence of a sulfur mustard agent on Islamic State munition fragments on Oct. 5, a second official said. The Islamic State had targeted local forces, not U.S. or coalition troops.


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