Analysts were also discouraged from pointing out the obvious in Enron's quarterlies. The government tore down the wall between investment banking and analysis, so investment bankers could use their own analyst's reports to push stock. So bankers pressured analysts to say only good things so they could sell, analysts wanted the commission, and on top of it all, reporting negatively on Enron will take down it's price.
also the article is probably overstating how "corrupt" Enron was. Most people on the inside really didn't think it was doing so badly. Andy Fastow and a few of his cronies in finance were the primary puppeteers in all the shady SPE shit they were running.
Oh, and JP Morgan and Merrill Lynch both aided and abetted (found guilty) of helping Enron.
Oh, and Jeff Skilling was permitted to use mark-to-market accounting because SEC idiots believed natural gas derivative trading is somehow "consistent" money-earning.
Not to mention Enron sabotaged it's own goals in manipulating deregulated California energy, when it was lobbying states to deregulate energy. (Enron wasn't the only guilty party, and by far not the worst).
Bottom line: government deregulation can be bad, shitty government regulators is bad, American Harvard MBA business culture is bad.
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FriedrichNietzsche ago
Analysts were also discouraged from pointing out the obvious in Enron's quarterlies. The government tore down the wall between investment banking and analysis, so investment bankers could use their own analyst's reports to push stock. So bankers pressured analysts to say only good things so they could sell, analysts wanted the commission, and on top of it all, reporting negatively on Enron will take down it's price.
also the article is probably overstating how "corrupt" Enron was. Most people on the inside really didn't think it was doing so badly. Andy Fastow and a few of his cronies in finance were the primary puppeteers in all the shady SPE shit they were running.
Oh, and JP Morgan and Merrill Lynch both aided and abetted (found guilty) of helping Enron.
Oh, and Jeff Skilling was permitted to use mark-to-market accounting because SEC idiots believed natural gas derivative trading is somehow "consistent" money-earning.
Not to mention Enron sabotaged it's own goals in manipulating deregulated California energy, when it was lobbying states to deregulate energy. (Enron wasn't the only guilty party, and by far not the worst).
Bottom line: government deregulation can be bad, shitty government regulators is bad, American Harvard MBA business culture is bad.