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Strategies & Market Trends : VOLTAIRE'S PORCH-MODERATED

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To: Dealer who wrote (44536)	11/29/2001 4:51:57 AM
From: stockman_scott	Read Replies (4) of 65232

The Prudent Bear on 'The ENE Mess'... <<...Elsewhere, ENE was crushed for 85 percent to 61 cents, as it appears bankruptcy is a forgone conclusion with the DYN deal now completely falling apart. The rest of the utilities (ENE’s counterparties) were sold as well, as the UTIL slipped 3 percent to a new low. This is just one big mess. I called this another Long Term Capital a couple months ago, and it appears to be hitting the stage that LTCM never made it to: a total collapse. The problem is (as was the case with LTCM) if a big derivative player goes down, then uncertainty is created around the whole system since nobody knows whose “promises” (which is all derivatives are) are good and whose aren’t. It’s like a house of cards (for lack of a better description.) All the cards lean on each other and are fine until you remove one, and that causes a chain reaction collapse of the whole structure. There’s no way to know what ENE’s positions are or how or who it will affect but this is no small player. With 23 billion in debt and being the largest energy market maker out there (they have a metals arm in London and make markets in other commodities as well), this is going to hurt a lot of people. Just what exactly all the derivative damage adds up to is unknown. It’s just one big black hole at the moment, and the unknown may actually be worse than the reality...>> More available at... prudentbear.com BTW, Dealer I strongly believe that the guys running ENE should be be held accountable and we should consider 'putting them in jail'...It will be interesting to see how it all plays out. Regards, Scott

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