The ENRON Scandal Message Board

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Non-Tech : The ENRON Scandal

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To: Raymond Duray who wrote (3087)	2/26/2002 12:58:38 PM
From: Thomas M.	Read Replies (2) of 5185

I watched Skilling for a few minutes today. He was making the very accurate point that Enron went down because of a situation similar to a bank-run. He mentioned the clauses in derivative contracts that allowed the creditors to pull out when things got bad, thus exacerbating a liquidity squeeze and creating a fatal situation. He then went on to extol the FDIC. Two points: 1. He signed those contracts. So, Enron is saying "a deal is a deal" when it is Enron vs. California, but is whining "that isn't fair" when the shoe is on the other foot. 2. In the classic Walter Wriston fashion, Skilling is calling for increased government intervention in the fields in which he is the prey and the markets are the predator, though he was calling for decreased intervention where Enron was the predator and California was the prey. For those who don't remember, Walter Wriston was the Citibank CEO who constantly called for decreased regulation of bank activities, but then always screamed for government assistance when his recklessness got Citibank into trouble. Classic "bankster" mentality (to borrow a term from the 1930s). Tom

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