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Strategies & Market Trends : Z Best Place to Talk Stocks
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To: Kelvin Taylor who wrote (38337)2/8/2002 10:04:05 AM
From: Larry S.  Read Replies (2) of 53068
 
ENRON capitalism:

ENRON EXPLAINED
In case you were wondering how Enron came into so much trouble, here is
an explanation reputedly given by a Colorado Ag professor to explain it
in terms his students could understand.

Capitalism
You have two cows.
You sell one and buy a bull.
Your herd multiplies, and the economy grows. You sell them and retire on
the income.

Enron Capitalism
You have two cows. You sell three of them to your publicly listed
company, using letters of credit opened by your brother-in-law at the
bank, then execute a debt/equity swap with an associated general offer
so that you get all four cows back, with a tax exemption for five cows.
The milk rights of the six cows are transferred via an intermediary to a
Cayman Island company secretly owned by your CFO who sells the rights to
all seven cows back to your listed company. The annual report says the
company owns eight cows, with an option on six more. The report does not
note that an option for one cow each has been given to the Bush and
Cheyney families and sides of beef promised to the chair of every
congressional committee who would accept the gift.

Now do you see why a company with $62 billion in assets is declaring
bankruptcy?
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