OT Fastow sentenced

How would even a smart investor learn the true value of a company under this scheme? Or are you saying we should make the whole thing even more of a crapshoot than it already is?

Reply to
PhysicsGenius
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You're not supposed to. If investors knew what companies were really doing, it would make it tougher to fleece the investors. Lay, Skilling, Fastow, all understood this.

This is why they used the 'hide the debt' shell game to put all of Enron's liabilities 'somewhere else.' The genius of it all is, they managed to show a sham profit at the parent company by doing this.

The government does not want the investor to see the smoke and mirrors, the securities and exchange comission which is in charge of getting companies to 'play fair' and divulge information to stockholders, was pretty much gutted over the past ten or fifteen years. The rules had been relaxed, and companies like Enron took advantage of the situation.

I'm not sure this could be done.

Jim

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Reply to
jim rozen

California set up a sham "free market" that was ripe for the picking.

*Someone* was bound to take advantage of it. Nigerians don't have a monopoly on something for nothing scams. In this case it turned out to be Enron who was the big fish in the pyramid scheme.

The real crime here was conning the public into believing that adding layers of middlemen between the regulated energy suppliers and the regulated energy distributors was somehow going to result in a more efficient system with lower prices for the consumer.

Anyone with an ounce of sense could see that the scheme couldn't possibly work that way. Even if all the middlemen were perfectly honest, they still were adding costs to the system, and those costs would have to ultimately be paid by the consumer, or the stockholders, or the system would collapse. In fact all three happened.

The irony of this situation is that it wasn't setup and sold to the public by right wingers. Instead it was leftist enviroweenies who most strongly pushed this sham through. Their unspoken agenda was to reduce consumption through higher prices, and to export pollution by shifting energy production out of state. The rigged system they created to do that encouraged fraud to run rampant.

It is virtually a fact of nature that when you create a system which encourages fraud, massive fraud will occur. There is never a shortage of people who want something for nothing, nor is there ever a shortage of people willing to take advantage of that cupidity.

Gary

Reply to
Gary Coffman

No, it was definitely a case of non-partisan, equal opportunity graft. The climax came after Bush was in, but it was clear to most of us out here what was coming well before that. It was an election issue in governor Davis' re-election campaign, for instance. Too bad he decided to do nothing about it until so late.

Al Moore

Reply to
Alan Moore

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