What if J.T. Marlin had an IBD division as well as the chop shop brokerage, and they had advised Enron? Is it possible that the entire unraveling and subsequent collapse could have been avoided? After being romanced by the BSD's at JT, Seth quickly realizes that something is amiss. His small, perpetually angry father lets him know that he is "ruining peoples' lives." At this point, an interesting parallel arises. JT, founded on lies and fake stocks, is remarkably similar to Enron, with complex SPEs and mountains of off-balancesheet debt. However, the lesson runs deeper. After Seth blows the whistle, he forever loses his shot at a top bucket bonus. Sherron Watkins could have taken a lesson from our dear friend Seth. Had she not blown the whistle, and arguably began the downward spiral that led to Enron's bankruptcy, Ken Lay may have been on GW's cabinet, instead of indicted. Given that many Enron employees lost their life savings and retirement funds when Enron collapsed, and many investors, with the notable exception of hedge fund genius and shrubbery lover James Chanos, lost millions, we rank the opportunity cost of Watkins' whistle blowing as very high.
Saturday, June 30, 2007
Could J.T. Marlin have saved Enron??
What if J.T. Marlin had an IBD division as well as the chop shop brokerage, and they had advised Enron? Is it possible that the entire unraveling and subsequent collapse could have been avoided? After being romanced by the BSD's at JT, Seth quickly realizes that something is amiss. His small, perpetually angry father lets him know that he is "ruining peoples' lives." At this point, an interesting parallel arises. JT, founded on lies and fake stocks, is remarkably similar to Enron, with complex SPEs and mountains of off-balancesheet debt. However, the lesson runs deeper. After Seth blows the whistle, he forever loses his shot at a top bucket bonus. Sherron Watkins could have taken a lesson from our dear friend Seth. Had she not blown the whistle, and arguably began the downward spiral that led to Enron's bankruptcy, Ken Lay may have been on GW's cabinet, instead of indicted. Given that many Enron employees lost their life savings and retirement funds when Enron collapsed, and many investors, with the notable exception of hedge fund genius and shrubbery lover James Chanos, lost millions, we rank the opportunity cost of Watkins' whistle blowing as very high.
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