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Strategies & Market Trends : Booms, Busts, and Recoveries
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To: Raymond Duray who wrote (14428)2/4/2002 2:18:28 PM
From: AC Flyer  Read Replies (3) of 74559
 
Raymond:

>>But a stinker like the End Run scandal really takes the scale and stretches it to new heights.<<

Well, it is certainly high profile. These kinds of scandals seem to occur regularly, though. As far as I can see, securities and criminal laws were clearly and regularly broken at Enron. The essence of the company's technique was to create off-balance sheet entities that borrowed money and loaned it to Enron in exchange for Enron stock. At the same time these entities were used to manufacture earnings by engaging in transactions that allowed Enron to value certain tangible and intangible assets at prices that were far higher than an objective market value. This "created" book value for these assets that allowed Enron to impute earnings from these transactions. This all amounts to a variation on the classic Ponzi scheme and is clearly illegal. It will be a shame if all of the senior officers of Enron do not do time.

While I did not see it, the reported spectacle of Mrs. Lay crying on national TV and claiming that she and her husband are victims of the Enron collapse is enough to make me vomit. Mrs. Lay, by the way, is a former secretary of Ken Lay. I have found the practice of dumping the first wife to marry the secretary to be an almost infallible indicator of lack of moral character in a man. It also, by the way, speaks volumes to the nature (manipulative, devious, narcissistic) of the woman.
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