Posted on 07/07/2004 1:07:00 PM PDT by OneTimeLurker
Not really. These folks know the press examines almost everything in detail.....They're job is finding dirt after all.
That's what Bush called him.
Hehe....
Who said it was OK?
You ba$tard$!
You know, a company can get into financial trouble by borrowing too much. But their debt situation is required to be disclosed. Every financial site out there posts the debt-to-equity ratio on every security.
But these limited partnerships (or whatever financial trick Enron used to hide their debt) were not required be disclosed, apparently. IOW, they were legal.
But now the government wants to burn Ken Lay at the stake to make an example of him. Somehow...anyhow...any way. Is nobody even concerned that the charges are "secret".
But how silly of me. I should know that modern Americans have never read that antiquated document that some old white european men used to call "The Constitution". Would you just look at the kind of crap they wrote?!?!
In all criminal prosecutions, the accused shall enjoy the right to a speedy and public trial, by an impartial jury of the State and district wherein the crime shall have been committed, which district shall have been previously ascertained by law, and to be informed of the nature and cause of the accusation; to be confronted with the witnesses against him; to have compulsory process for obtaining witnesses in his favor, and to have the Assistance of Counsel for his defence.
We do know that Enron got a determination from clinton administration in 1992 that trading electricity as Enron wanted to do did not make them a "public utility" under PUHCA.
I don't have a problem with that. It allowed a market in electricity to form, and broke the monopoly of the public utilities.
I have no doubt that the Enron legal staff was the best in the world and knew exactly where they could bend the FASB rules.
I'm trying to think back. There was some precipitating event that caused the Enron house of cards to tumble. I can't recall what it was.
Your #111 was most excellent.
Email her the story anyway. No comment from you, just the story. Never bring it up when your around her, but by emailing her the story, you are putting her on notice that she believes lies.
I think most of it was equity in their stock, which simply evaporated. The U.S. stock market in general lost a total of $8 trillion of equity during the clinton crash. I don't know what the market cap of Enron was before the crash, but we know that it's zero now.
The rate at which paper asset wealth, stocks, decreased in value left behind a debt valuation shock. During the 1990's it was increasingly prevalent for companies to borrow against their paper asset valuation. As paper asset values have dropped very quickly companies have been unable to borrow against their stock or even refinance existing debt to lower rates and costs because they lack the collateral to support the loans.This is exactly what brought down Enron. It's stock price dropped below a bond trigger level that forced a call feature on their bonds. The bonds were called due by the holders. The bonds could not be refinanced and the company had to declare bankruptcy. It was after this fundamental issue that the fraud became apparent, not before. The fraud did not bring down Enron, the economy and their ludicrous leveraging did. They were not prepared for any market consolidation and got hammered when it happened.
--An Explanation of Debt and Why You Need To Understand It by Roger Arnold, Jan. 2003
Do we know who the bondholders were that triggered the demise of Enron?
In its bankruptcy filing, the company listed assets of $49bn for the units that sought protection.Last year Enron was seen as the top US energy trader with $100bn in revenues and $1bn in profits.
Since the middle of October, the company has slipped into a downward spiral after reporting a third-quarter loss and revealing a series of questionable off-balance-sheet deals.
Enron's value on the stock market has collapsed from more than $80bn to $220m on Friday.
So $80 billion in equity just disappeared. The article states that rival Dynegy pushed Enron into bankrputcy:
...Enron is also suing rival Dynegy Inc for wrongfully terminating a proposed $9bn merger deal, precipitating Enron's collapse - the biggest in US corporate history.Enron has defended its decision to launch a $10bn lawsuit by saying that Dynegy had "full knowledge" of its finances before 9 November.
The company also claimed that Dynegy waived the right to pull out of the merger after its two-week "due diligence" period.
However, Dynergy's chairman and chief executive Chuck Watson has described Enron's suit as "frivolous and disingenuous".
He said his company is countersuing to make sure that key subsidiaries - such as the Northern Natural Gas pipeline, 17,000 miles of pipes connecting Texas to the Mid-West - stay running long enough for Dynegy to take them over.
Dynegy, Mr Watson said, was owed the pipeline in exchange for the $1.5bn it injected into Enron while the talks were taking place.
Great news! Another anti-freedom criminal is held accountable under the Bush administration. Perhaps the greatest defenders of FREEDOM this nation has ever seen. GO ADMINISTRATION GO!
That's absolutely accurate. When a stock has more owners wanting to sell than can find willing buyers, the stock's price drops until enough buyers are found.
Nobody cashes in on that lost value (short sellers aside). The company certainly doesn't and what was a megabillion dollar company suddenly isn't. The billions of dollars simply disappear into the cosmos. They no longer exist.
Oh, he gave money to Dems alright. But he gave (a lot) more to Repubs. That's why it's a no-win.
An interesting point as relates to the Fed. How does that effect the way they calculate the currency stock? Does the flash of the cash in a crash allow them to stash (i.e., print more money)?
If you look at the real numbers and the relationships, Enron and Lay heavily favored the R's. Ralph Reed, Ed Gillispie and James Baker all took money from Enron, not to mention all of the donations to the RNC and R candidates.
Lay also played golf with Clinton and slept at the White House during Bush I.
The Fed doesn't count equities as currency stock except for money market mutual funds. And they don't need anyone's permission to print more cash in a flash, lol.
Well, they may not count equities, but the disappearance of equity has to have an effect on cash accounts. Cash used to buy those equities doesn't come back out when they are sold at a lower price, hence the need for liquidity in a crash. The money disappears out of the stockholders' hands and suddenly reappears in the bankers' hands as money to borrow from the Fed (who are private bankers) for money to loan. Isn't that how it works at the discount window?
(CO makes a mental note to go back to his texts on monetary theory.)
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