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Gold/Mining/Energy : Enron - Natural Gas Industry
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To: buffaloha who wrote (1129)12/5/2001 1:30:45 PM
From: Robert Graham   of 1433
 
The orchestration was too pat.

Another person who can see this! Very good! :-)

I will also add it was too quick in order for the deal to go as smoothly as it did. Have you heard of "purposeful ignorance"? It is a technique that can be used during negotiation of an arrangement to good intentions and goodwill in the negotiation process. This is what DYN used in their dealings with Enron. Then at a later time, they will predictably come up with a "surprise" discovery. And as they slap their ands to their face in surprise, they will back out of the deal saying that this revelation will naturally materially impact their agreement in an adverse way. They will do this as they walk away what they wanted in the first place. In this case, the natural gas operations of Enron's business including a good piece of change for their efforts. However, I have never seen this pulled off on such a large scale deal. At the risk of sounding paranoid, that chairman of DYN is one slick operator.

...and the tactics of DYN (a competitor for God's sake) just rammed this thing into the dirt way too fast.

Quite predictable given what I have stated above.

The real key to this whole scenario, though, is not only the immense size of ENE but the fact that the banks had a vested interest in seeing this continue.

I see and agree. But that was after the fact, when the rebound was already underway. All this did was to make further upside *appear* to have less risk. It comes down to knowing when to exit. That will determine profit or loss.

As a side note, when banks or other companies do something uncharacteristic in a significant way, exposing themselves to unfamilliar and essentially undeterminable risks, IMO that is a red flag that needs to be heeded.

Bob Graham
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