Word: tinos
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Dates: during 1960-1969
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Paper Mountain. To finance his rapid growth, Tino borrowed huge sums of money, using huge amounts of oil as collateral. But there was one hitch: he never had all that oil. What he did have was a mountain of paper-certificates attesting that he owned the oil. Although Billie Sol Estes at that very time was making headlines for having passed off similarly spurious paper for nonexistent ammonia tanks, the bankers and brokers never bothered to check up on De Angelis' tanks. Nor did they question De Angelis' warehouse receipts, because Tino had them signed by officials...
...sense, American Express got mixed up with Tino in an effort to spur sales of its famous travelers' checks. Back in 1944, the company figure J that it could induce bankers to push the checks by performing a service for them. A subsidiary, American Express Warehousing, would store, inspect and vouch for the oil that commodities dealers commonly used as collateral for their bank loans. It was a rewarding business-De Angelis paid American Express Warehousing up to $20,000 a week-but terribly risky. If anything went wrong, Amexco's subsidiary was responsible for making good...
...weighted tape measure, then shout down to an Amexco inspector on the ground that the tank was 90% full. Sometimes the tanks were indeed full-with water, topped by a thin slick of oil. Usually many were empty. Moreover, the tanks were connected by a jungle of pipes; Tino's men sometimes sneaked into the casually guarded tank farm on weekends, pumped oil from one tank to another. These machinations gave him an endless supply of oil certificates-and endless borrowing power. At one time he had loans out on three times as much oil as the Bayonne tanks...
...Equals $12 Million. In 1962 Tino set out on a fantastic scheme to corner the entire market in soybeans. He plunged into commodities futures, a frantic market of paper and promises, where fortunes are made or lost on fluctuations of a fraction of a penny. Betting that the price of soybeans would rise, Tino bought huge contracts for future deliveries of soybeans from other speculators who in turn were betting that the market would fall. He was helped by the fact that commodities markets work on bargain-basement margins of 5% to 15%-that is, big traders need...
What made the matter more complex was that Tino by then had grown so cocky and creative that he bypassed even the lax warehouse inspectors, forged some of his own receipts. By mid-1963, he had contracted to buy 20,000 tank cars of oil-an astonishing 1.2 billion Ibs., worth about $120 million. With every 10 shift in price, he stood to gain or lose $12 million...