pete
28/01/2002, 3:27 PM
Enron explained - How to Explain Enron to Your Children and
those LESS wise:
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 created 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 Island company secretly
owned by the majority shareholder who sells the rights to all seven cowsback to your listed
company.
The annual report says the company owns eight cows, with an
option on one more
those LESS wise:
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 created 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 Island company secretly
owned by the majority shareholder who sells the rights to all seven cowsback to your listed
company.
The annual report says the company owns eight cows, with an
option on one more