This month in (financial) history.
On this day in 1963, American Express subsidiary American Express Warehousing declared bankruptcy after inspectors exposed a fraud scheme orchestrated by commodities trader and con man Anthony De Angelis.
De Angelis and his company Allied Crude Vegetable Oil company obtained a contract with federal program Food for Peace, which was in charge of selling excess U.S. food stocks to poor countries. De Angelis posted 1.8 billion pounds of soybean oil as collateral for $180 million in loans. In reality, Allied had only about 110 million pounds of oil. Allied would trick inspectors in multiple ways, including filling cargo ships mostly with sea water and floating a few feet of salad oil on top. When inspectors audited Allied’s facilities, the company would transfer the same oil stock from tank to tank to fool the inspectors while entertaining them during lunch.
The Salad Oil Scandal was only exposed when there was a problem with the Russian soybean market, and soybean prices fell drastically as a result. The lenders attempted to cash in the supposed 1.8 billion pounds of Soybean oil, only to discover they were a few hundred million pounds short.
The Salad Oil Scandal drove the American Express stock price down from $60 to $35. An opportunist investor swooped in and invested about 25% of his assets at the time into American Express shares, which were back up 150% within four years. That investor was none other than Warren Buffett.
Vaguely interesting facts.
- Foreign Accent Syndrome is a rare side effect of brain trauma. Affected patients still speak their native language, but in a foreign dialect.
- Ravens in captivity can learn to talk better than parrots. Intelligence tests rate them at a similar level to chimpanzees and dolphins.
- A British man changed his name to Tim Pppppppppprice to make it harder for telemarketers to pronounce.
- Galileo’s middle finger is on display at the Museo Galileo in Florence, Italy. We have no idea why.
- The world’s entire spider population weighs around 25 million tonnes. *
Source: mentalfloss.com, wikipedia.com.
* Bonus fact. It has been estimated that the world’s spiders consume somewhere between 400 and 800 million tonnes of biomass each year consisting almost entirely of creepy crawlies, plus a few lizards, snakes, frogs and bats. That’s around twice the combined weight of all the world’s adults.
How common are dogs with human names? Or humans with dog names? Glad you asked. The Washington Post explored the names of 61,000 dogs available for adoption on the Petfinder website and compared them with baby names stretching back to 1880. If your name is Emily, you’re almost certainly human. Rover? 100% dog. Jack? See below.