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

To: PartyTime who wrote (1930)	1/31/2002 12:29:46 AM
From: JBTFD	Read Replies (1) \| Respond to of 5185

It is my understanding that the Cayman subsidiaries are legal. And other companies do this type of thing also. They are following the letter of the law (allegedly) while not maybe following the spirit of the law. I dont think Anderson or Enron were concerned with ethical red flags. I sense I am still misunderstanding you.

To: PartyTime who wrote (1930)	2/3/2002 7:04:00 PM
From: Raymond Duray	Respond to of 5185

OTC DERIVATIVES PARTNOY OFF SHORE BANKS Re: . But I suppose I should clarify my question. If seasoned investors know that anything set up in the Caymens should raise a red flag, certainly so should top executives? You are making the mistake of looking at this from the perpective of the retail investor, regulator or tax collector. To the banker, Caymans facilities are a godsend. There, transactions are largely unfettered by regulation, reporting or profit impairment (i.e. taxes). Off shore tax haven banking is so powerful a narcotic to the banking industry that it will fight tooth and claw to prevent change.... OTC Derivatives are one of the best profit centers of the money center banks, 'ceptin' when things blow up like End Run and Long Term Capital Mutilation. So, Uncle Al has been told "hand's off" and he's acquiesced. This is sort of the nightmare scenario I foresaw a couple of years ago being Greenspan's Achilles Heel. What you saw last fall, as the rating agencies were being indecisive about downgrading Enron's paper was that there was significant and substantial jawboning going on behind the scenes and that you can be damn sure that the Plunge Protection Team was fully alerted and the Citibank and J.P. Morgan helped to orchestrate the unwinding of derivative positions. This is the deep "secrets of the Temple" stuff that no one wants to get out, so the press is highly unlikely to be allowed to report on it. Your basic wizard of oz machinations were going on throughout October and November. So, we'll get some superficial reforms, and we might even get the accounting industry to be less arrogant and useless, but the OTC derivatives market will most likely be kept out of the spotlight, and off the table, in the discussion of the reregulation of the financial markets. I'm encouraged that Prof. Frank Partnoy is working with the Senate Governmental Affairs Committee. This means that there is at least a chance that this really dirty laundry may get aired out in the light of day. But it is such an arcane subject, that there will be absolutely no groundswell from the electorate to lift a finger. -Ray