Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Non-Tech : The Enron Scandal - Unmoderated -- Ignore unavailable to you. Want to Upgrade?

To: Raymond Duray who wrote (768)	1/27/2002 7:24:01 PM
From: Edscharp	Read Replies (1) \| Respond to of 3602

Capitalism vs Enron Venture Capitalism Excerpt from the soon to be published book "Economics for Dummies" Chapter 11 'Creative Accounting - The Enron Example' How a Company claiming $62B in assets can go bankrupt. (Or take the money Enron). 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 Venture 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 the majority shareholder 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 one more. Pay your accounting firm 1/2 cow for creative memory problems and paper shredders. Sell your shares in the other half of the cow and eat steak. see Chapter 12 - 'Corporate level plea bargaining'