# Enron: The Smartest Guys in the Room



## JM Anthony (Nov 16, 2003)

If you haven't seen this one, check it out. It's a sad, sad story about how a lot of people got s*rewed by a few really greedy SOB's. Wife and I watched it last Friday night and then my 17 y.o. daugther and a half dozen or so of her friends watched it and talked about their reactions for an hour or so!! They were every bit as fried as we were.

Watching this and hearing about Exon's record profits really made my day.

John


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## DonLandis (Dec 17, 2003)

I just watched it and now have a better understanding of what happened. I never really got it from brief news reports. Just didn't take the time to learn the problem since it didn't seem to affect me and my business. I think I was wrong since, now learning indirectly, I was a victim of this but fortunately only in a very minor way.


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## Richard King (Mar 25, 2002)

If you want to go deeper into the subject pick up a copy of "Conspiracy of Fools" by Kurt Echenwald. I just finished it and was amazed by what some of these people were pulling off on the employees, shareholders and customers. It's a good 700 page read. Ken Lay looks like a total fool who had no real control over, nor knowledge of what was happening in the company that he was the head of, spending much of his time trying to find his successor so that he could move on to other things. The biggest crook of the bunch, and the main cause of the problems that brought them down, was Andy Fastow and his side deals to enrichen himself and his inside circle of buddies.


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## JM Anthony (Nov 16, 2003)

Richard,

Thanks for the heads up on the books. I'll check it out as I find Enron an interesting case of what can go totally wrong with a company and its corporate culture. From Fastow's deal, to the traders' attitudes in manipulating supply and demand, to Lay's mismanagement, to Andersen's failure to provide fiscal visibility, and to their board's absence of oversight; this is a classic case study of the American business system being out of control. I feel saddest about their pensioners who lost their life's savings. A million or two in personal pension assets wiped out over night. Tough to recover from that at 65. Very sad indeed.


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## DonLandis (Dec 17, 2003)

John- My father taught me a valuable lesson that these littleguys should have known. It boiled down to one word. Diversify! The reason these people lost everything is because they had their future eggs all in one basket. They could have lost it all using that same philosophy with another company that was not run by white collar scum. There are plenty of people in the world who have lost everything and weren't victim of Enron. While I may never get rich quick, I will never go broke over night either. Diversify your portfolio! 

I do agree with you that it was out of control, but if you viewed the extras on that DVD there were reads of skits put on by the company that made it clear that the people writing these skits were quite aware of the unethical speculative practices that brought the company and all the little guys down, while allowing the few top guns to walk away with the millions. It seems everyone there was aware they were doing something terribly wrong but were all of the opinion they would not be caught up in it. The justice dept has the videos of the skits that were performed and it seems they will use this as evidence everyone knew and planned this scam on the investors right from the start. Funny, how everyone wants to fix blame on just a few at the top. I think thousands should be found to have some degree of responsibility for unethical business practices. 

Now what I didn't know until I watched this was how close the Bush Family was to this and it should be interesting when that stuff surfaces as well. I liked the cartoon of the senate investigating committee where it was asked that any Senator who had a conflict of interest in this case should not show up and the room was empty.  Seems many at the top were also in the know what they were doing. As I said, I really didn't follow the story until watching this DVD. I wonder if there is another side to the story that was not told in the HDNet production.


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## olgeezer (Dec 5, 2003)

As the trial is now in progress, I'm sure we'll here much more. But not until after the mid term elections.


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## Bogy (Mar 23, 2002)

DonLandis said:


> John- My father taught me a valuable lesson that these littleguys should have known. It boiled down to one word. Diversify! The reason these people lost everything is because they had their future eggs all in one basket. They could have lost it all using that same philosophy with another company that was not run by white collar scum. There are plenty of people in the world who have lost everything and weren't victim of Enron. While I may never get rich quick, I will never go broke over night either. Diversify your portfolio!


This is great advice, and I certain recommend diversification. You do realize that a lot of the people counting on this stock for retirment did not have a choice in diversifying their portfolio?



> Now what I didn't know until I watched this was how close the Bush Family was to this and it should be interesting when that stuff surfaces as


Bush and his lovers have denied that anyone in the family had anymore than a passing aquaintence with Enron or anyone running it. Less starstruck observers have been aware of this connection for some time.


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## JM Anthony (Nov 16, 2003)

Don - I agree with your advice and think it's right on the money. But Bogey's recollection is the same as mine. Not only could they not diversify their pension stock holdings, they also could not sell.

John


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## DonLandis (Dec 17, 2003)

Bogy- I strongly disagree that people were forced to put 100% of their portfolio in Enron. I think you meant to say that people felt they had a need, maybe, to invest all their retirement in one portfolio that was Enron. In fact there is a part of the movie that documents one woman, taking the podium and claiming she had 100% of her 401k in Enron and was ecstatic about it. I recall she was one of the owner's wives. But, I'm sure even her investment was voluntary. Maybe you meant that if they did invest in a retirement plan and chose Enron that maybe, they didn't have anything left of their paycheck to invest elsewhere. So what would have happened to them if they did have an IRA at their bank? Would they have been murdered? 

As for Bush family... I'm not surprised they were involved, I just didn't know how until this movie made a minor issue of it.


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## Richard King (Mar 25, 2002)

JM Anthony said:


> Richard,
> 
> Thanks for the heads up on the books. I'll check it out as I find Enron an interesting case of what can go totally wrong with a company and its corporate culture. From Fastow's deal, to the traders' attitudes in manipulating supply and demand, to Lay's mismanagement, to Andersen's failure to provide fiscal visibility, and to their board's absence of oversight; this is a classic case study of the American business system being out of control. I feel saddest about their pensioners who lost their life's savings. A million or two in personal pension assets wiped out over night. Tough to recover from that at 65. Very sad indeed.


I think you would probably enjoy the book. Along with the things that I mentioned the book also reveals a few fabrications that have been leaked to the public to demonize Enron management, not that they didn't do enough without the fabrications to be properly demonized.


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## Richard King (Mar 25, 2002)

JM Anthony said:


> Don - I agree with your advice and think it's right on the money. But Bogey's recollection is the same as mine. Not only could they not diversify their pension stock holdings, they also could not sell.
> 
> John


Ah, one of the fabrications that I mentioned. Actually, they could have diversified, but they were so hyped by management that many (most?) did not. Some did though. Ken Lay's near total net worth was also invested in Enron, on margin. He had been borrowing money to invest in the company and made a great salesman in convincing others in the company to do the same. He probably lost more than any of the other investors in the company. The book was titled "Conspiracy of Fools" and Ken Lay was the chief fool and was fooled by many around him. I recall hearing about a period of time where people couldn't sell stock from their pensions, but, in reality this was a short period of time (less than two weeks if I recall correctly) and when the period was over the stock value was actually higher than when the period started, so, yes, during the period no one could sell, but no one was harmed either. The lockout on selling was due to a change in the pension fund managers.


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## Richard King (Mar 25, 2002)

Page 69-70 of "Conspiracy of Fools" discusses a golf game that Ken Lay was invited to participate in on August 14, 1993 in Colorado. He arrived expecting to find a large group of people gathered to play in several foursomes, but instead found only one foursome. That foursome consisted of the person who invited him, a fellow by the name of Bill Clinton, former president Ford, Jack Nicholas and Ken Lay. Lay had supported George Sr for re-election when Clinton won, but on page 70 the book states: "The game ended hours later, and all the players went on their way. Any thoughts that the defeat of President Bush would significantly blunt Enron's influence at the White House had evaporated with the first swing of a club."

i'm glad I didn't give the book away as I usually do when I finish reading.


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## airpolgas (Aug 13, 2002)

This got me interested, but where can I actually watch this? Netflix? Is it currently doing its rounds in dish programming? Thanks.


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## DonLandis (Dec 17, 2003)

Rented it at Blockbuster


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## JM Anthony (Nov 16, 2003)

airpolgas said:


> This got me interested, but where can I actually watch this? Netflix? Is it currently doing its rounds in dish programming? Thanks.


Netflix is where I got my copy.


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