Enron: Just Ahead of its Time

[Note to Readers: I originally published the following post in mid-December. At that time, the cumulative federal bailout bill was about $2 trillion. Including guarantees of dubious bank assets, that number now is closer to $4 trillion -- $173 billion of which has been pumped into just one company, AIG.

Given these developments, I thought this post was even more topical now. The only other new information is the size of the '08 bonuses Wall Street exec's paid themselves (not known in December). Suffice to say, they didn't go with "the low end of the range."]

Is it Too Late to Bail Out Enron??

"Supreme Court Overturns Bush v. Gore"--Headline; The Onion (12/9/2008)

Watching what's going on in Washington and on Wall Street, the Enron guys must be turning over in their . . jail bunk beds.

Consider the following:

--The audited financial statements of AIG, Citigroup, Bear Stearns, etc. obscured or omitted billions in company liabilities.
--Enron's audited financial statements obscured or omitted billions in company liabilities.

--Senior management at AIG, Citigroup, Bear Stearns, etc. reaped hundreds of millions in compensation and bonuses based on (dubious) asset values they determined.
--Enron senior management reaped hundreds of millions in compensation and bonuses based on (dubious) asset values they determined.

--Senior management at AIG, Citigroup, Bear Stearns, etc. publicly reassured investors, creditors, and employees that all was well, and exhorted them to buy "cheap" company stock, even as they dumped their own holdings.
--Enron senior management publicly reassured investors, creditors, and employees that all was well, and exhorted them to buy "cheap" company stock, even as they dumped their own holdings.

Enron's leadership is in jail (or in CEO Ken Lay's case, dead). Wall Street's senior management is . . . deciding what their 2008 bonuses should be. (My advice: go with the low end of the range, guys.)

Enron wasn't corrupt -- it just had the misfortune of being ahead of its time.