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Strategies & Market Trends : John Pitera's Market Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: John Pitera who wrote (5279)	12/13/2001 7:53:04 PM
From: Logain Ablar	Read Replies (1) \| Respond to of 33421

John: ON the face of it I'll go along with the ene management defense (Ken Lay said something similar) that they had made some bad investments. However, management crossed the line by knowingly hiding the mistakes and now taking its medicine. If Lay was unaware of this (hey Bill never had sex with Monica either) then he was just incompetent. At the least he was incompetent in picking his successor who was aware of it. The problem with the mania and with all growth companies is when a speed bump arrives. We get to see how good management is in how they handle it. ENE not only fails but they broke some laws. However, with the CFO having Boyles as his attorney who knows if anyone sees jail time. Ellison has accounting issues in the early 90's but at least could blame it on an agressive sales staff and no real accounting/financial controls with a young company. ENE had no excuse. Dell may have had some issues but from my feeble memory accounting gimicks were not part of it.

To: John Pitera who wrote (5279)	12/14/2001 6:51:23 AM
From: Stoctrash	Read Replies (1) \| Respond to of 33421

<< find it quite ironic that the Treasury announced the end of the 30 year bond auction, just as the US Government was moving back to deficit spending, after several years of surplus. I'd say that US Government tax receipts were significantly enhanced over the past 3 or 4 years due to the very powerful bull market. The huge corporate profitability, coupled with significant capital gains in the corporate and individual sector, created a Wave of Inflated tax receipts that was never more sustainable than the market bubble mentality and equity valuations in the stock market itself.>> yeah..ironic and moronic!! or is it? My guess is this move was just a figure head move to get the long end down but as you pointed out, why fund "it" with ST stuff when you can do it with longer paper and wash your hands?? We'll see how smart they are over the next few years I guess. First solid hint of econ turn and I'd bet they reopen the 30year..just guessing... ps...where do you watch the corp. bond market from? Any good sites we should know about?

To: John Pitera who wrote (5279)	12/14/2001 8:51:54 AM
From: Henry Volquardsen	Read Replies (2) \| Respond to of 33421

Hi John, Agree with that being the likely scenario with Lay. But he was still chairman so he can't shirk responsibility. Enron is a fascinating story for both what they did right and where their hubris brought them down. I absolutely agree that they were brilliant innovators in energy trading. And their innovations will survive long after them. But then hubris hit the same way its hit so many who succeed, hence my comment about thinking they were brilliant instead of just clever. They were able to innovate in energy because they had a wealth of experience and history in that field. They knew where all the pitfalls were. But when their innovations spread through the market and started narrowing profitability. They responded this by wishing to spread their innovations to other markets, such as broadband and water. The problem is they had innovations and cleverness but no experience or institutional knowledge of these segments. So they wind up getting in at cycle peaks and overpaying for assets. In the water business they appeared to have gotten into international political situations they had no clue about. They thought they were brilliant because they HAD revolutionized energy trading and that blinded them to the fact that they were clueless in these other fields. Hubris. Or as I like to call it 'farting above your asshole'. I agree about risk. Risk is not bad its good. You don't grow without risk. One of the senior guys at are former shop used to say 'if you never lose money you're not taking enough risk'.