The news that there is $1 trillion of Afghanistan mineral wealth hiding in the country's scarred and deserted landscape has global investors calculating how likely it would be for this incredibly poor country to transform itself into a natural-resources powerhouse.
It has also spawned debates about which nations should be given a piece of this vast apparent fortune.
The discovery - and its transformational potential - is mind-boggling: At $1 trillion, the estimated value of the mineral reserves is 100 times the size of Afghanistan's entire economy, estimated at $12 billion. And it's not just the dollar figures that could bring about change. Much of Afghanistan's economic activities involve drug-trafficking and terrorism. About 40% of the country's population lives below the poverty line, and 70% lives on $2 a day.
We Want to Hear From You: Is Afghanistan's Mineral Wealth a Blessing or a Curse?
The news that there is $1 trillion of Afghanistan mineral wealth hiding in the country's scarred and deserted landscape has global investors calculating how likely it would be for this incredibly poor country to transform itself into a major global exporter.
It has also spawned debates about which nations should be given a piece of this potential fortune.
At $1 trillion, the estimated value of the mineral reserves is 100 times the size of Afghanistan's $12 billion economy. And it's not just the dollar figures that could bring about change. Much of Afghanistan's economic activities involve drug trafficking and terrorism. About 40% of the country's population lives below the poverty line, and 70% lives on $2 a day.
How to Cure Western Bankers of "Bad-Banker" Behavior
Masayuki Oku, the new head of the Japan Bankers Association, recently said that Western bankers did not understand self-control the way Asian bankers did, which was a major cause of the 2008 crash and the Great Recession.
I think he has a point.
Oku's main purpose in denouncing Western bankers for their lack of self-control was to object to the tougher proposed capital rules from the Basel Committee, the global body that sets banking regulations.
To understand how to fix the Western banking sector, please read on...
Downgrades Crush Goldman Sachs Stock On News of Criminal Investigation
Goldman Sachs Group, Inc (NYSE: GS) fell 9.39% Friday after being downgraded on news released Thursday that federal prosecutors started a criminal investigation into whether Goldman committed securities fraud.
Standard & Poor's Financial Services LLC downgraded Goldman to sell from hold and lowered its price target to $140 from $180.
"Though traditionally difficult to prove, we think the risk of a formal securities fraud charge, on top of the SEC fraud charge and pending legislation to reshape the financial industry, further muddies Goldman's outlook," S&P analysts wrote in a note to clients Friday morning.
Money Morning Mailbag: Readers Eager For Effective Financial Regulation
The Money Morning mailbag continues to overflow with reader thoughts and concerns regarding financial reform – which is finally making slow progress in Washington. After three failed attempts to bring a financial regulation bill to the floor this week, the Senate on Wednesday finally agreed to start debate.
Following is a collection of this week’s Money Morning reader comments on our articles regarding reform, inspired also by more news from the Securities and Exchange Commission case against Goldman Sachs Group, Inc. (NYSE: GS) as executives faced a Senate committee hearing.
Goldman Director Linked to Insider Trading on Buffett Investment
Galleon Group founder Raj Rajaratnam Rajat may have engaged in insider trading on Goldman Sachs Group Inc. (NYSE: GS) stock by profiting from a tip from Rajat Gupta, a director at Goldman, The Wall Street Journal reported, citing a person it didn't identify.
The new disclosure stems from a government examination into whether Gupta gave inside information to Mr. Rajaratnam about a $5 billion investment Warren Buffett's Berkshire Hathaway (NYSE: BRK.A, BRK.B) made in the Wall Street bank before it became public knowledge.
In a March 22 court filing, the government revealed more details about the information it alleges Rajaratnam received, alleging that he or "co-conspirators" traded on non-public information, including advance notice about the Buffett investment in Goldman.
Money Morning Mailbag: What's More Broken – Washington or Wall Street?
While policymakers will have taken up the debate over financial reform in the halls of Congress, Money Morning readers have been posting comments to our Money Morning Facebook page and writing in to our e-mail mailbag at email@example.com with their thoughts on the Goldman Sachs Group Inc. (NYSE: GS) case and the relationship between Washington and Wall Street.
A week after the Securities and Exchange Commission brought fraud charges against Goldman Sachs, President Barack Obama yesterday (Thursday) blamed the financial meltdown on both Washington and Wall Street in a speech in New York and urged Wall Street giants to stop fighting reform.
Goldman's First-Quarter Profit Doubles to $3.46 Billion, Even as its Fraud Probe Takes on an International Twist
Investment-banking giant Goldman Sachs Group Inc. (NYSE: GS) - the target of a civil fraud case filed by U.S. securities regulators - yesterday reported that its first-quarter earnings nearly doubled, even as the probe against it took on an international twist.
The New York-based Goldman said it earned reported first quarter earnings of $3.46 billion today (Tuesday), or $5.59 a share, an increase of 91% from earnings of $1.66 billion, or $3.39 a share, for the same period a year ago. The earnings report came just days after the U.S. Securities and Exchange Commission filed a civil fraud case against the Wall Street financial heavyweight.
Goldman's earnings beat analysts' average estimates of $4.16 a share. Its investment bank income revenue rose to $12.78 billion, and its fixed-income, currency and commodities trading generated net revenue of $7.39 billion.
How the Goldman Sachs Fraud Case Could Accelerate Wall Street Reform
When the U.S. Securities and Exchange Commission announced Friday that it had filed a fraud action against Goldman Sachs Group Inc. (NYSE: GS), the news hit the financial markets like a carefully targeted bomb.
The Goldman Sachs fraud case, which relates to the investment bank's subprime-mortgage business, caused the financial giant's shares to nosedive 12.8%. The fallout spread to the broader markets, too, causing the Dow Jones Industrial Average to drop 1.1% and the Standard & Poor's 500 Index to skid 1.6%.
That reaction wasn't overblown.
Depending on how rough the SEC wants to play it, the case has the potential to shut down the cartel known as Wall Street. It could even jump-start the kind of sweeping overhaul that legal or regulatory reformists have so far failed to launch.
To see how the government fraud case against Goldman Sachs could force Wall Street to reform, please read on...
SEC Charges Goldman Sachs With Fraud, Sending Its Stock, Reputation Tumbling
The Securities and Exchange Commission (SEC) on Friday charged Goldman Sachs Group, Inc. (NYSE: GS) with securities fraud in a civil suit, claiming the financial giant defrauded investors with a mortgage-related investment that was intended to fail.
The SEC accused Goldman Sachs of failing to disclose vital information on a synthetic collateralized debt obligation (CDO) that was peddled to clients while the bank bet against its success, knowing the bank was likely to come out the winner. The SEC says Goldman used hedge fund Paulson & Co. to pick particularly risky securities for the product with a higher chance of collapsing.
The whole financial sector slid after the SEC's announcement. Goldman's stock fell over 12% Friday to close at $160.70 a share.