Enron's Ghost

[rffrydr]

Centaurus Energy Advisors making the transition from the "guesswork" of trading to the "knowledge" of direct investment. Can't touch their returns of 200%/year,...


http://www.ft.com/cms/s/0/8f391e94-21ca-11dd-a50a-000077b07658.html

....learned the hardway in Enron's heyday:

http://www.spectrum.ieee.org/aug05/1693

One can a get a taste of what a powerhouse Enron could've achieved had it only survived its time'
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Today is the Tomorrow you worried about Yesterday!

[rffrydr]

A short (non) reform history of off-balance sheet SPE's. What the banks owe Enron may be the biggest debt in this whole crises:

http://www.ft.com/cms/s/0/b03665e4-60d9-11de-aa12-00144feabdc0.html?nclick_check=1
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Today is the Tomorrow you worried about Yesterday!

[rffrydr]

Finally getting around to addressing that other legacy of Enron, "structured stuff":

http://ftalphaville.ft.com/blog/2009/07/15/62141/whos-not-happy-about-extra-commodity-regulation/
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Today is the Tomorrow you worried about Yesterday!

[rffrydr]

Enron: The Smartest guys in the Room

http://www.youtube.com/watch?v=0zMakN-EMLg

Ask why?

http://www.business-standard.com/india/news/rgppl-inks-pactge-to-repair-modernise-gas-turbines-at-dabhol/360229/

Deserves a second look, for there are surely second lessons:

Something Old. Something New. It's all too easy to write off the Regan era idealogy of deregulation and pin the blame on criminality. History is a costume ball, never repeating but always coming back to the same dance floor.

But was Enron not the model for so much of that which would come later (everywhere but NatGas--take heed Bugs, the scars run deep, from high to low here)?! Is not Enron the visionary here? All that they imagined would come true. All that they dared would follow. Nothing fails like success.

Did it matter that, for the most part, there was no "intent"? Did it matter that this path was blazed by criminality? By fraud? We could say the same of the rich and very real history of Louisiana beget out of the very real fraud of the Mississippi Bubble.

Of course nothing focuses the mind like money...like a payoff. Make it big enough and you've got employees, shareholders, lawyers, government, and Volcker's old babby, Arthur Anderson to dance. But what do we choose to forget? What becomes clearer in the fullness of time?

All of finance was involved and they would target all that was weak and small and irregular--deformed markets that are determined by their context as much as any inherent value. This was where the magic wand of securitzation would be wajved.

What would this magic be if it couldn't be placed behind the curtain? Behind an SIV, at the other end of a rainbow "conduit."?

And when did the horse bolt the barn? "Mark-to-market." The shrine at which all that is good and great in finance is laid. Signed and delivered by the powers that be. Again the mismatch of price and time, the fundamental contradiction in market economies (water a function of demand? Maybe. Maybe you should check out "the rain that follows the plow" and the origins of the Dustbowl--the Great Depression's first cause. Old growth forests--they have more in Russia, right?). Marking watts ten-years out to evey town and hamlet. Marking the carry even as it's booked.

Merrill learned how to lease tankers with Enron. How much has this knowelge been applied to our flotilla of supply on the seas right now?

California failed for its audaciousness. Enron was desperate and didn't care.

Enron looked backward, a "bandwith" market, victim to the very same bubble that created it. And desperate, they tried to market the heavens, selling weather contracts--the Icarus syndrome. But their first idea was The idea. They created the EM "trade." And colonial power of the past echoed in their minds.

And, in the end, they we're all criminals. Isn't that just too easy? The path had already been blazed. The financial world as we knew it was collapsing from behind. Follow the yellow brick road.

Lessons?
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Today is the Tomorrow you worried about Yesterday!

[HenryTo]

Love this quote at the end: