BOOK 'EM DANNO!!
I cannot believe it Enron were long band width from the off.
The price per unit of technology has generally only gone in one direction - down.
..........In its first contract, the one Yeck signed with Global Crossing, a telephone and data network operator, Enron agreed to buy bandwidth capable of moving data and streaming video between New York and Los Angeles. Enron planned to resell the bandwidth at a profit.
``This is `Day One' of a potentially enormous market,'' Skilling said in a news release on Dec. 2, 1999. ``The market structure for bandwidth is currently inefficient and expensive. We are demonstrating that bandwidth can be traded under flexible, market-based contract structures.''
quote.bloomberg.com
This more than stinks, the whole organisation was long bandwidth and was passing it around off-balance sheet entities to hide things.
Anyone from a financial background or not would see this as criminal.
It is like LTCM set up another company, sold them their duff positions for a profit, then told Mr G - "what leverage". A graduate accountant could see this.
Off balance sheet company is Long Equity at creation - ENE shares, and then Short bonds (to Enron) and Long derivatives (from Enron). This works provided the Enron Share price rises.
I am being frank, if there were ever documents that detailed this then Andersens are in a lot of trouble.
Get a jury of high-school kids and Skilling, Lay, Fastow and the Andersen clan are going to jail.
They would need a very good psychologist to prove that they (Enron) did not see this coming.
This is chapter one of the Crooked Company Handbook.
-macavity. |
