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Strategies & Market Trends : Strictly: Drilling II -- Ignore unavailable to you. Want to Upgrade?

To: TheBusDriver who wrote (7477)	2/9/2002 9:21:57 AM
From: russwinter	Read Replies (2) \| Respond to of 36161

A new term for our investor vocabulary: "structured finance". More sordid conduct from you guessed it, this time Citicorp. It's the same cast of characters (scandrals actually) over and over and it's no coincidence: From this week's Doug Noland: prudentbear.com "Today’s New York Times’ revelation that Citigroup successfully hedged against its Enron exposure by creating and selling structured instruments is worthy of comment. In Citigroup’s largest transaction of its kind, the company sold securities worth $1.4 billion with the stipulation that investors’ principal would not be returned in the “unlikely” event of an Enron default. Well, well, well, sort of brings back memories of Goldman Sachs as lead underwriter for Russian eurobond issues in June of 1998. Goldman enjoyed excellent timing, as $1 billion of issuance proceeds were used to repay a Russian loan, significantly cutting its exposure only weeks prior to the eruption of the Russian crisis. Leaving aside potential claims of insider information or related lawsuits in Citigroup’s transaction, it is not rocket science to appreciate that speculators in such products will not be so easily “bagged” in the future. This is also further indication that huge losses have been suffered out there somewhere in “structured products.”