Editor dies in fall from New York Times office building

Very sad. I wonder if their is the possibility that he was pushed. That might explain the "fell" instead of "jumped." Could it have been an accident? Suicide is not a given it doesn't sound like to me--yet.

Yesterday the Department of Justice announced that Kopper had pled guilty and was cooperating with the Enron investigation. Last night the Feds froze the assets of Skilling. And today a reporter covering Enron kills himself. Some coincidence.

Sorry for lack of link. I posted it right off the AP wire here at my newsroom. I hadn't seen it on the Web yet.

I originally expressed doubt that the Drudge flash was correct. Let that be a lesson to me. Sorry, Matt.

God bless the poor fellow and his family.

hmmmmm

My apologies to you, too. (What was I thinking?!)

The New York Times

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August 23, 1998, Sunday, Late Edition - Final

SECTION: Section 3; Page 4; Column 1; Money and Business/Financial Desk

LENGTH: 1053 words

HEADLINE: INVESTING IT: FOCUS ON ELECTRIC POWER -- THE COMMODITY;
A 20,000% Bounce: Now That's Volatility

BYLINE: By ALLEN R. MYERSON

DATELINE: HOUSTON

BODY:
AS president of the Enron Corporation, which trades more electricity than anyone else, Jeffrey S. Skilling presumably knows all the risks. But he is the first to acknowledge that he is still learning just how this most volatile of all commodity markets bounces. And he has 14 mathematicians with doctorates to help him.

Which helps explain why companies with less expertise in trading electricity and futures are taking huge hits, while Enron made modest, though undisclosed, profits. Just a few weeks ago, the LG&E Energy Corporation of Louisville, Ky., announced losses of $225 million -- about $315 million before taxes -- from trading electricity and then shutting most of its trading operations. Its shares fell $3, or 10.9 percent, in four weeks, to $24.5625; it closed on Friday at at $26.4375. Other companies, including First Energy of Akron, Ohio, and Illinova of Decatur, Ill., also said their earnings had been dented as a result of volatile prices, although not so much. The fallout continues. Just last week, Power Company of America L.P., a privately held electricity trading company in Greenwich, Conn., which had defaulted on some contracts, filed for bankruptcy reorganization.

No wonder investors might also be at a loss in assessing the risks companies are taking. The deregulation of electricity and the birth of trading in it have multiplied the perils for the utilities and their shareholders. Few companies disclose enough to allow even full-time analysts to say who is trying to learn this new form of poker by playing at the high-stakes tables.

There are some ways, however, to tell the difference between the Enrons and the LG&E's. First, scorekeepers should understand that electricity is nearly impossible to store, with demand soaring in unpredictable stretches of hot weather. The nation's power grid has so many bottlenecks that regional squeezes can become severe. That means prices can go wild, more than for any other commonly traded commodity.

Thus, in late June, power temporarily traded at wholesale for as much as $7,500 a megawatt-hour, more than 200 times the normal level. If utilities could pass this cost on to customers, the owner of even a modest home would pay about $400 a day in air-conditioning bills.

But they can't. So companies like LG&E, which had contracted to supply power to other utilities over the long term at fixed prices, had to buy at high short-term prices. It was not unlike the fix that savings and loans got themselves into by lending long-term and borrowing short-term.

Steven A. Parla, an analyst at Credit Suisse First Boston, therefore favors companies that are already experienced in trading natural gas, which was deregulated years before electricity.

"The players who have spent the last 10 years trading what has been the most volatile widely traded commodity on earth, which is natural gas, will be the most successful at trading what will become the most volatile widely traded commodity on earth over the next 10 years, which is electricity," Mr. Parla said.

In this category, he and several other analysts and industry executives put not only Enron, but also Duke Energy and Dynergy, which recently changed its name from the NGC Corporation. Duke Energy has gained its expertise through buying Panhandle Eastern and Louis Dreyfus Natural Gas. Dynergy, like Enron, has long been occupied primarily with natural gas.

Unlike LG&E, these companies are all large enough to withstand a few jolts. "LG&E is among the bigger companies in power trading, but among the smaller utilities," said Barry Abramson, an analyst at Paine Webber. "So when things go bad, it has a very big impact."

Analysts advise investors to try to determine whether companies trading electricity are betting on the direction of prices. It can be hard for outsiders to know. But LG&E had disclosed that it had long-term, fixed-price sales contracts, implying a bet that cheaper electricity would allow it to fulfill those contracts profitably.

Enron aims to supply electricity, financing, risk management and other services while limiting its own exposure to price movements. It is a complicated task, requiring computer systems, statisticians and financial controls sufficient for constant assessment of the combined effects of a company's generating capacity, sales and purchase agreements and financial instruments. The payoff is the ability to stay on top of the game. "Being a winner in electricity does not mean being on the right side of the market," said Kurt Launer, an analyst at Donaldson, Lufkin & Jenrette. "Being a winner in electricity means being able to provide a service to customers in a deregulated environment."

Almost all companies trading electricity say they have sufficient controls, as did LG&E, although it acknowledged in two previous quarters that its electricity trading had left it with unspecified losses. John R. McCall, an executive vice president, said that though prices might never return to $7,500, they would remain volatile enough to harm other utilities that are still trading.

For the time being, however, companies trading electricity appear to be able to hide some of their mistakes behind accounting standards better suited to the stable, plodding electricity providers of yore than to today's gunslingers. Few follow Enron's example of reporting the current market value of its positions every quarter; instead, most utilities report gains or losses only after they close out their futures positions and long-range contracts.

Another sign of risk is when a utility lacks enough generating capacity both to supply its own customers and to fulfill its contracted commitments to other utilities. When the city of Springfield, Mass., defaulted on a contract to supply power to LG&E, the utility was forced to pay high spot market rates for enough power to deliver to the Oglethorpe Power Company of Georgia.

Enron executives, sometimes accused by analysts of taking untoward risks, try to reassure investors. But in recent weeks, they have found themselves denying rumors not of losses but of electricity trading gains of as much as $750 million.

"It ain't going to happen," Mr. Skilling said. "That's not the way we manage the business. Conversely, we're not going to lose $750 million either."

Actually, I have begun to think about his wife and children. If this is seen as a suicide, then they might not be eligible for life insurance benefits, so that might be a reason to say it wasn't a suicide.........

maybe.....

The New York Times

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July 25, 1998, Saturday, Late Edition - Final

SECTION: Section D; Page 2; Column 1; Business/Financial Desk

LENGTH: 708 words

HEADLINE: INTERNATIONAL BUSINESS;
Enron to Buy British Water Company

BYLINE: By ALLEN R. MYERSON

DATELINE: DALLAS, July 24

BODY:
The Enron Corporation, in a stroke of business alchemy meant to turn its electricity and natural gas expertise into know-how about water, announced a $2.2 billion cash purchase today of a British water and sewage company as a base for global expansion.

Some analysts said that Wessex Water P.L.C., though profitable and efficient, was too limited in potential growth to be worth that price. But Kenneth L. Lay, Enron's chairman, called the purchase essential for his company to enter the water market, where privatization and annual investments around $100 billion are just beginning. "We think there are tremendous opportunities, probably a lot more opportunities than there are companies able to take advantage of them," he said in an interview. As in the deregulation and privatization of global natural gas and electricity businesses, he said, "Getting in early and getting in in a very substantial way can give you a strong competitive position." In just a few years, Mr. Lay added, Enron's water business could be as big as its gas or electricity operations. While the company also plans to exploit possible plans by many American cities to privatize their water services, it intends to focus on Europe, Latin America and Asia.

Enron's offer of $10.33 a share, or £6.20, is 26 percent above Wessex's Thursday closing price of £4.93 in London. Wessex shares surged today to £6.115, while Enron fell $1.25 to close at $55.25. Enron will also assume $255 million in Wessex debt.

Enron, based in Houston, has been a pioneer in turning natural gas and electricity into global businesses. But some analysts said the water and sewage industry was different in ways that Enron might not expect.

Where Enron's energy projects have often been fresh starts, its water investments are likely to require the purchase of existing companies with their current systems and employees. Enron might have to lay off half the employees and spend heavily to upgrade systems, said Richard Smith of Deutsche Morgan Grenfell in London. Enron's dealings with foreign leaders in its energy investments might prove of limited value because water commonly is managed locally. "At this stage the international water market isn't as easy as the international electricity market," Mr. Smith said.

Enron also faces two huge French competitors, Suez Lyonnaise des Eaux and Vivendi, which have long head starts in water projects around the world. Enron quietly entered the business last month with a group that paid $150 million for 70 percent of a newly privatized water and sewer company in Mendoza province of Argentina. But it lost a project in China to Suez Lyonnaise des Eaux.

Enron's admirers point out that it has already shown the ingenuity to apply lessons learned in the natural gas business. David Fleischer of Goldman, Sachs compares the Wessex purchase to Enron's $2.9 billion acquisition last year of the Portland General Corporation, Oregon's largest power provider, as a base for attacking the electricity market.

In water services, Mr. Fleischer said, "Enron has a lot of capabilities, and the Wessex deal gives them the capabilities they didn't have."

In Wessex, Enron would get a water company too small to realize its own foreign ambitions but with managers who have greatly improved its efficiency. "The track record of Enron married to the experience of Wessex is a formidable combination," said Nicholas Hood, who will remain the Wessex chairman. He will also become vice chairman of the new water division of Enron, which will be managed by Rebecca P. Mark, Enron's vice chairwoman.

Although Enron said the acquisition would improve its earnings next year, British regulators are considered likely to trim the company's rates in 2000. Wessex, based in Bristol, provides water for an area of 1.1 million people and sewage services for an area of 2.5 million, both in southwestern England. Its sale is subject to the approval of its shareholders and British regulators. While British water companies were privatized in 1989, American cities, including Atlanta, are just in the process of privatizing their services.

Enron said that other cities, including New York, Los Angeles and Chicago, were considering whether to follow.

So clearly Myerson had spoken to Skilling, precisely on the subject of Enron's accounting. Was Kopper already Skilling's right-hand man when Myerson was working on this article?

Any relation to the kleptomaniac Bess Myerson?

News can be spun any way.

Earlier this year the last remaining flyable Boeing 307 airliner crashed into Seattle Bay after the dumb sh*ts flying it managed to run the four-engine antique out of gas. Volunteers had spent years and hundreds of thousands of private dollars to restore this beauty to flying condition. You really need to read the whole accident report to get the full flavor, but my point is that the official cause of the crash is "air in the fuel lines."

Well, DUH! Of course, when you've drained the tanks dry, there then appears air in the fuel lines. The cheap b*st*rds only put an hour's worth of fuel in the plane for its first test flight.

I wonder what we'll learn about today's death in NY.

Okay, what did he know about Hillary and when was he planning to publish it?

Hmmm, all of this seems Clintonesque...

Excellent point in your post #31.

Does anyone know where I could find a picture of this guy?

I remember seeing Enron ads on TV and reading articles like this. My opinion then was that their primary operation, stripped to its essence, was that of a middleman. Middlemen have been squeezed relentlessly out of most industries and I concluded then that their prosperity would not last. Historically, IMHO, when companies like Enron go on a merger binge, they're trying to cover a fundamental flaw in their business plan.

In case anyone's keeping track, this would appear to be the second Enron-cide.

In case anyone's keeping track, this would appear to be the second Enron-cide.

And let's not forget that Goldman Sachs guy that jumped out of a window a couple of weeks ago.

Personally, I haven't a shred of sympathy for suicides. It is the ultimate "poor me the victim" cop-out.

As is noted in this thread, however, at this point (and maybe never) we really don't know whether he jumped or was pushed.