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Re: Explaining ENRON (No LBC)

To: spridgets@autox.team.net
Subject: Re: Explaining ENRON (No LBC)
Date: Tue, 19 Feb 2002 22:03:24 -0500 FILETIME=[29AC5FB0:01C1B9BB]
David, You hit it RIGHT on the head. Let me guess, you used to be a
NY investment banker before you got smart and moved to Vermont! ;-)

Brian

>
>How to Explain ENRON to Your Children:
>
>Feudalism - You have two cows. Your lord takes some of the milk.
>
>Fascism - You have two cows. The government takes both, hires you to take
>care of them, and sells you the milk.
>
>Communism - You have two cows. Your neighbors help take care of them and
>you share the milk.
>
>Totalitarianism - You have two cows. The government takes them both and
>denies they ever existed and drafts you into the army. Milk is banned.
>
>Capitalism - You have two cows. You sell one and buy a bull. Your herd
>multiplies, and the economy grows. You sell them and retire on the income.
>
>ENRON Venture Capitalism - You have two cows. You sell three of them to
>your publicly listed company, using letters of credit opened by your
>brother-in-law at the bank, then execute a debt~equity swap with an
>associated general offer so that you get all four cows back, with a tax
>exemption for five cows. The milk rights of the six cows are transferred,
>via an intermediary, to a Cayman Islands company secretly owned by the
>majority shareholder, who sells the rights to all seven cows back to your
>listed company. The annual report says the company owns eight cows, with an
>option on one more.
>


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