If they turn it into a movie, how about: Enron -- Italian-style? The news that the financial cupboard of the Parmalat dairy group in Italy contains a bare corner where there should be US$4.8 billion in cash and securities certainly livened up the pre-Christmas financial pages.
According to Parmalat, the US$4.8 billion was deposited with the Bank of America in New York by -- wait for it -- a subsidiary (Bonlat) based in the Cayman Islands.
According to one Italian banker: "This is all financial engineering cooked up by US banks. Parmalat raised cash with bonds, then took the cash and put it all in these offshore accounts in order to borrow yet again off the balance sheet."
It remains to be seen what share of the cooking was done by whom, but the episode has immediately escalated into an Italian political crisis, involving a power struggle between the Italian treasury and the Bank of Italy as to who should be controlling financial supervision (at present it's the Bank), with Prime Minister Silvio Berlusconi promising a bail-out even as the administrators sharpen their red pencils.
There are question marks over other accounts, with some US$8.7 billion gone missing, according to the London Financial Times.
Wall Street and Italian banks involved with Parmalat are reported to be "bickering among themselves" and, as it were, running for cover.
Modern capitalism depends heavily on trust and goodwill, but this is a timely reminder during the season of goodwill that trust in business affairs sometimes hangs by a thread. With the Maxwell pension fund scandal in the UK and the Enron affair the anti-globalization movement should, perhaps, be paying less attention to globalization per se, and more to that very old-fashioned issue, the ethics of capitalism.
Lord Acton is often quoted on political power -- "Power tends to corrupt, and absolutely power corrupts absolutely" -- but the same applies to financial power. Often, of course, the corruption begins before the first penny is raised. There is no shortage of crooks out to deprive the public of its money.
But sometimes the rot sets in later, in apparently honest enterprises, where charismatic financiers and businessmen retain trust long after they have ceased to deserve it -- Robert Maxwell was a classic example. Indeed, in Maxwell's case, he almost certainly did not set off intending to deprive pensioners of their cash -- he just gambled on being able to use it to rescue his company. In different circumstances he might have got away with it and have been able to replenish the pillaged pension fund.
But often outside investors just don't want to know that something might be amiss. Already the Financial Times is saying: "With hindsight, signs that Parmalat might not be a good company to invest in had been growing ever since it was first quoted on the Milan stock exchange in 1987, nearly 20 years ago."
Apparently Parmalat was not too forthcoming in explaining its results, and far from keen to meet analysts. As long as the results, however dependent on financial engineering, looked good, investors did not ask too many questions.
It will be interesting to watch how the credit and blame for this fiasco is shared out between the Italian end of the job and Wall Street. It has all the makings of a great movie.
President William Lai (賴清德) attended a dinner held by the American Israel Public Affairs Committee (AIPAC) when representatives from the group visited Taiwan in October. In a speech at the event, Lai highlighted similarities in the geopolitical challenges faced by Israel and Taiwan, saying that the two countries “stand on the front line against authoritarianism.” Lai noted how Taiwan had “immediately condemned” the Oct. 7, 2023, attack on Israel by Hamas and had provided humanitarian aid. Lai was heavily criticized from some quarters for standing with AIPAC and Israel. On Nov. 4, the Taipei Times published an opinion article (“Speak out on the
Eighty-seven percent of Taiwan’s energy supply this year came from burning fossil fuels, with more than 47 percent of that from gas-fired power generation. The figures attracted international attention since they were in October published in a Reuters report, which highlighted the fragility and structural challenges of Taiwan’s energy sector, accumulated through long-standing policy choices. The nation’s overreliance on natural gas is proving unstable and inadequate. The rising use of natural gas does not project an image of a Taiwan committed to a green energy transition; rather, it seems that Taiwan is attempting to patch up structural gaps in lieu of
News about expanding security cooperation between Israel and Taiwan, including the visits of Deputy Minister of National Defense Po Horng-huei (柏鴻輝) in September and Deputy Minister of Foreign Affairs Francois Wu (吳志中) this month, as well as growing ties in areas such as missile defense and cybersecurity, should not be viewed as isolated events. The emphasis on missile defense, including Taiwan’s newly introduced T-Dome project, is simply the most visible sign of a deeper trend that has been taking shape quietly over the past two to three years. Taipei is seeking to expand security and defense cooperation with Israel, something officials
“Can you tell me where the time and motivation will come from to get students to improve their English proficiency in four years of university?” The teacher’s question — not accusatory, just slightly exasperated — was directed at the panelists at the end of a recent conference on English language learning at Taiwanese universities. Perhaps thankfully for the professors on stage, her question was too big for the five minutes remaining. However, it hung over the venue like an ominous cloud on an otherwise sunny-skies day of research into English as a medium of instruction and the government’s Bilingual Nation 2030
RSS