SKIMMED $$ AT PARMALAT COULD MILK U.S. BANKS

New York Post ^ | December 25, 2003 | STEPHEN LYNCH

[sarcasm]

December 25, 2003 -- Some of the largest U.S. banks may be soon be dunked into the growing scandal at Italian dairy giant Parmalat.

As Parmalat sinks into financial turmoil, firms like Merrill Lynch and Citigroup are being eyed for the same kind of financial shenanigans that marked earlier disasters such as Enron.

[PGalt]

Thanks for the post. Good news bump. The war against economic terrorists is being waged and won.

[Iris7]

"Economic terrorists" is excessive hyperbole. "Thieves", perhaps.

[billorites]

"Parmalat...can't account for $12.5 billion - or the whereabouts of its disgraced founder, Calisto Tanzi."

I'm sure there's a good explanation.

[doosee]

I'm sure there's a good explanation

The Cookie Monster did it.

[ZinGirl]

Parmalat...can't account for $12.5 billion

have they checked the pantry shelf? that stuff can sit there for years...

[Phaedrus]

A preliminary investigation has found that Citigroup in 1999 helped Parmalat construct a financing arrangement called "buconero," which is Italian for "black hole." Though recorded as a form of investment by Parmalat, auditors now call it a debt.

Citi again. Not "black hole", fraud. The integrity of the U.S. financial system is disintegrating. Sooner or later, foreign investors are going to head for the tall grass.

[razorback-bert]

4 billion becomes 5 billion moving on to 6 billion then 9 billion, now 12 billion.

Bet they aren't through yet.

[arete]

Bet they aren't through yet.

How could this happen to a milk and cookies company? I think that it just goes to point out the problems built into the structured finance system and using IOU's to back other IOU's.

Richard W.

[radiohead]

...Citigroup in 1999 helped Parmalat construct a financing arrangement called "buconero," which is Italian for "black hole." Though recorded as a form of investment by Parmalat, auditors now call it a debt.

And people call lawyers crooked...

True career advice to me from my step-father, "If you ever want to become a thief, become an accountant and do it right."

[dalereed]

"a milk and cookies company"

The milk went sour and some diry guy threw it out!

[dalereed]

Last note for the ex CEO:

don't cry over spilt milk!

[dennisw]

Their origins are in proscuitto but today are a huge dairy conglomerate.

[the invisib1e hand]

The war against economic terrorists is being waged and won.

and bad taste...Archway and Mother's?!

[Phsstpok]

How could this happen to a milk and cookies company? I think that it just goes to point out the problems built into the structured finance system and using IOU's to back other IOU's.

Maybe this will help explain it. This is from a Newsmax article (citing the NYT) from 2002 about Robert Rubin and Enron.

Citigroup is paying Enron pal and former Clinton Treasury Secretary Robert Rubin a whopping $40 million a year to "advise on strategy" - while he continues to help Democrats undermine President Bush, the New York Times reported today.

If you think about it, using IOUs to back other IOUs is all the "Clinton economic miracle" ever was.  Sounds like Bobby Rubin was selling that idea all over.  Maybe this explains why I can't find my favorite Christmas cookies this year, the Archway cashew nougats.

Oh, and the reason that a "milk and cookies" company could be in this big a hole?  Think how "little" RJR Nabisco is.  Think of the high finance shenanigans around that merger (read Barbarians at the Gate) and you get the idea.

[sarcasm]

How could this happen to a milk and cookies company?

Have you ever tasted their milk?

[Moonman62]

Thanks for the post. Good news bump. The war against economic terrorists is being waged and won.

What do you call the people who've been raiding the Social Security "lockbox?"

[groanup]

"How could this happen to a milk and cookies company?"

These shennanigans were SOLD to milk and cookie companies like this by the likes of investment bankers who made TONS of money off of these structured deals.

[arete]

cashew nougats.

Mmmmm . . . cashew nougats.

Richard W.

[Lael]

How could this happen to a milk and cookies company? I think that it just goes to point out the problems built into the structured finance system and using IOU's to back other IOU's.

Agreed!!!

This thing has DERIVATIVES written all over it!!!

So, who is the Italian Elliot Spitzer in this case???

P.S....Even on CNBC there was commentary that this is only the BEGINNING...like living under a Giant Centipede waiting for the Next Shoe To Drop!!