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Pastimes : The California Energy Crisis - Information & Forum -- Ignore unavailable to you. Want to Upgrade?

To: Raymond Duray who wrote (1054)	11/29/2001 11:05:45 AM
From: portage	Respond to of 1715

Hi Ray. My view is maybe a bit simpler, but just as strong. You do the crime, you do the time. Hello Spike. This white collar thievery has gone too far. They are the latter day mafia, without the leg breaking. From pro forma accounting to lax SEC oversight (or none in the case of Enron trading) to insider information, this system is out of control, and is going to screw the country badly (except for the top insiders). Lay and the top guys hurt a lot of people, from Californians who they conned into the dereg disaster down to their own "family" workers at Enron. Absolute greed, selfishness, and hidden illegal behavior it appears. Here's a telling post from a month ago from bondbear over at Bear Forum (he seems to have good insights into the world of bonds and other financial instruments) : "Enron. Oh oh! The cat is out of the bag! Here is how the problem came about. Companies are faced with demanding shareholders. They want the highest returns with the lowest risk. Enron was in the boring old energy business. The energy business could not provide shareholders with the type of returns they demanded. What did management do? They turned Enron into a highly levered hedge fund. But highly levered hedge funds are risky aren't they? Well Enron's management thought they had discovered a way that they could make financial speculation appear less risky. They transferred all the risk to an offshore credit facility which they controlled. This way they could lend the offshore credit facility monies at a very high rate of interest without having to deal with the nasty ramifications of having to deal with the volatility of marking their portfolio to market. Neat trick…until it doesn't work anymore. The ramifications of this are potentially greater than LTCM disaster. Enron accounted for up to 25% of the nations commodities transactions. They are huge! Who else has been playing this game? We don’t know right now, but some pretty big and scary names come to my mind." bearforum.com Cheers, I suppose.