It smells downright stanky.
::Speculation::
If Dynegy were to aquire the title to the pipelines, they may also become responsible for loans against which those pipelines were pledged.
If so, Dynegy would have aquired a load of debt, but also aquired the pipes and their revenue stream.
::End Speculation::
I would be highly unsurprised to see numerous Enron suits wearing Dynegy colors in a month or two.
Here’s a link: Citigroup, J.P. Morgan face Enron exposure
Hmmm, and Hmmm again. Something is very rotten here.
Dynegy claims the pipes, and the pipes are pledged as security. So unless Dynegy is planning on assuming sole responsibility for the debt, there’s a finiancial “Mexican Standoff”. Curiouser and curiouser.
Is this the same Enron that has been in bed with Dubya for awhile now?
This thing is going to get ugly! (Not that it isn’t already ugly enough for people who lost 401ks)
This will go very high into government too. Bailout or no, Bush is damned either way. He sits back and watches a homegrown, big-time company flop in a Jerry Bruckheimer-sized implosion, or he backs a bailout and looks like he was bought and paid for by Enron.
Who wants popcorn?
There’s nothing real fishy here. Dynegy wanted to buy out Enron, so Chevron/Texaco gave Dynegy $1.8 billion to give to Enron so that they could stay in business while the deal was worked out. If the deal went through then it was washed out, of course. But to protect themselves, the terms of the loan included preferred stock in the pipeline with Dynegy (read Chevron) having the option to purchase the pipeline, including taking on whatever debt that included, should the deal collapse and Enron unable to pay them back.
Does this mean the Houston Astros’ ballpark has to be re-named?
More seriously, Enron’s Ken Lay was one of the people pushing for the deregulation of electricity here in California:
Yeah, sure it would. While power rates did go down, it was because we had an unusually cool summer; demand was down.
As for the relationship between Lay and the Prez:
I certainly have sympathy for the people who lost their shirts in this, but Lay is one of the people responsible for the price of electricity skyrocketing here in California, so I certainly have no sympathy for him.
I wonder if I could ask you what you mean by posts of this sort? The facts you bring up were noted by me in an earlier post. I also noted then that there seems to have been no move by the government to help Enron, despite this. Do you have evidence to the contrary? Or are you trying to suggest somehow Bush was aware of the misdeeds by Enron executives, or party to them?
I would have thought this was beneath you. But maybe I’ve misunderstood your post, and apologize if you had some other point that I missed.
jk1245, I don’t think this is a problem at all for Bush. The world will go on, likely without Enron. The thousands of individual tragedies will not be blamed on Bush (at least by most people 
)
I’m hardly a dedicated market observer, but this doesn’t surprise me at all.
See, I used to work at a telecommunications company. The founder, the CEO, the executive staff – they were all crooks, pure and simple. The company started out as a switchless reseller (if you don’t know telecom, basically this is a combination between being a manufactured middle-man and selling snake oil), but later acquired a couple of switches. They regularly slammed customers (i.e. signed them up for the company’s long-distance service without approval), including falsifying signatures on approval documents by copying-taping-and-faxing an authentic signature from some other piece of correspondence. There’s more, much more; suffice to say it was a pit of vipers, highly unpleasant but highly educational. At any rate, the company finally went down the tubes, bottoming at one penny per share, to the degree that NASDAQ was threatening to de-list them. Exit the CEO, enter white knight, who proceeded to dismantle the company in short order. The CEO and his executive cabal were named in several shareholder lawsuits after the company’s demise, mostly for defrauding the investors and making promises they had absolutely no intention of living up to. I was there; I watched it happen.
So: That CEO, after leaving the company, was immediately picked up by, you guessed it, Enron. He was named as president of one of their energy divisions (differentiating from the financial-services area), despite the fact that the telecommunications company in question, during its death spiral, was a moderately hot topic on the Dow Jones wire. (Somebody called the company, and I quote, a “train wreck.” There’s a morbid fascination with watching somebody self-immolate, which generated quite a flurry of activity on the newswire for a while.) It was an open secret that the CEO and his cronies were squeezing as much blood as they could from the venture (which was originally started as a writeoff by the Chairman/Founder, who is an equally slimy real estate mogul) before dumping it and fleeing. Enron knew what they were getting.
I heard through the grapevine that he was fired a few months after starting, which leads me to wonder if (1) he was actually skankier than they were, or if (2) he had learned his lesson at the telecom place and wouldn’t play ball. Either way, his character was well-known; he had previously destroyed one name-recognized telecom firm before coming to the one I worked at. (Oddly, the white knight who came in after the board fired him performed exactly the same rescuer role at this previous company.) There’s no way this guy’s new employer was surprised at his being a snaky bastard, and that’s when I knew that Enron, a company I’d barely heard of, was a place whose morals I could safely condemn without knowing anything else.
These arrogant bastards skate around on top of the economy without ever having to suffer the consequences of their short-sighted greed. I used to be bitter; now I’m just tired.
From Yahoo Finance, Research page on Enron (symbol ENE):
Strong Buy 6 (!)
Buy 2
Hold 6
Sell 0 (!!!!!)
Strong Sell 1
The California state government has been in a tizzy the past few months because it signed long-term contracts with the likes of Enron to ensure a power supply during the energy crisis (remember the energy crisis?) While the long-term price was good compared to the gougings Enron et al were giving the utilities at the height of the energy crunch, it’s still much higher than the historical price of energy. Now that Enron has gone belly up, does that mean California is released from its long-term contracts, or will they be that much harder to wriggle out of since Enron’s creditors are now going to be circling like vultures?
Jesus Christ. This is something I could talk a lot about - but nondisclosure agreements prevent me from doing so any more.
That having been said - I’d like to see an answer to IzzyR’s question too, please.
A couple of observations:
Someone mentioned about diversification and 401Ks. It’s possible that Enron’s retirement plan was a self funded profit sharing plan but erroneously reported as their 401K in the press. Our plan was like that but has been modified since the last big stock market dip (too late to save me $100K, but thems the breaks).
When the CEO and/or company officers sell their investors down the road, the law should come down as hard as possible on them. This means that their personal assets are liquidated to repay creditors and they are put in prison. If they seek bankruptcy protection during this then the judge presiding should not allow them to keep more than the small investor most severely damaged by these crooks. Besides feeling “right”, steps like these need to be taken if small investors are to feel like they have protection against these sorts of ghouls in the market. Otherwise the small investor will not put their money in the markets; they’ll go back to banks and other vehicles with guaranteed revenue streams. In other words they’ll become risk averse. There are too many “regular joe” investors in the market to allow this to happen. The current recession will take a lot of time to climb out of without both consumer and investor confidence on solid terms.
When the Dynegy talk was all in the air, yes, they were going to rename it Dynegy Park. I don’t know what the current plan is. Maybe it will just be called “The Ballpark at Union Station” or some other big corporation will step in. Not bound to be Compaq (as in Compaq Center for the Rockets) as they are hurting now. Perhaps another oil/energy company or perhaps even our hometown furniture guru and sports fan, Jim McIngvale. I can just see it now, galleryfurniture.com Park, to go along with galleryfurniture.com Bowl.
I’m in Houston right now. Course it is dominating the news but people here are really still quite in shock. There are a lot of oil companies in town, but Enron is really a hometown, past decade success story that really almost came out of nowhere. They made their money mostly on stuff that most people (myself included) really don’t understand, so I think there is a lot less incredulity when you talk about the company going out of business. Ya know, people rightly get attached to the premise that if a company still has factories, oil wells, stores, inventory, whatever, it can weather a storm or at least file Chapter 11 and batten down the hatches for a while. With Enron, (and correct me if I’m wrong), having so much debt and so little real capital means that they could be poof gone by next year.
It does make me sick how 1) the current administration all got rid of their substantial Enron holding this year before the troubles because of the “conflict of interest” and 2) how they are a darling of the Bush administration (the CEOs and top execs raised millions for the campaign) and will likely get away scot free. For 8000 Houstonians, the holidays will be about as cold as it gets in Texas.
Stop, stop, you’re ripping my heart out!
Let’s see. California usually ranks anywhere from number six to number twelve (on a bad day) in the world’s economies. Not that California didn’t help dig itself into a ginormous pit with its idiotic deregulation policies, but Enron seemed all too glad to stick it to California when the chips were down. Wasn’t Enron involved with the wrongful death of employees or people from gas line explosions?
Most of all, it is extremely difficult for me to escape the notion that Shrub was all too happy to let Enron bleed California white in retribution for California’s lack of support during the presidential elections. Way to go Shrub, allow your buddies to cripple the one state that helps shoulder a significant portion of the Union’s economic health. As speculative as this might be, I think it was supremely insane to allow such harm to come to one of the most powerful economies in the entire world. Now that the recession is howling at everyone’s door the supidity of this is only more obvious.
I was thinking of Marathon.
California has no long-term contracts with Enron.
I had somehow missed that as I was reading the thread. My apologies.
I certainly don’t have any reason to believe that Bush had any direct responsibility for Enron’s failure (altho his deregulation of areas where Enron operated, while governor, may have made it easier for their flim-flam artists to get away with what they did).
I certainly don’t think he had any personal knowledge of the workings of their business. I just think he felt that corporations like Enron were the white hats, and if government only got out of their way, the world would be a better place. I doubt that this will change Bush’s views on the subject one iota, needless to say; he’s happy to believe what he believes, regardless of the evidence.
I had heard that a number of Enron execs found their way into positions at the Bush White House this year, though I’ve been unable to track down names so far. I was hoping others here might know more in that regard than I.
Re: California & Enron, see: Californians Smirk at Enron Demise
I don’t think so. The flim-flam artists were practicing good old fashioned “accounting irregularities”. As I understand it, they transfered company losses to privately held companies owned by Enron execs, making Enron profits seem larger than they actually were. Eventually Enron had to restate their earnings for the previous 4 years, wiping out much of their profits for that time.
What is true is that the Enron books were extraordinarily complicated, and even after they “came clean” no one was able to get a good handle on exactly what was in them. This appears to be at least partially due to the nature of the business that they were in, which involved complex deals, but was likely used by the execs to throw the auditors off their trail. (See the article that jk1245 linked to earlier). But I don’t think this can be connected to Bush.
This may be true, but is unconnected to the relationship that he had to this specific company.
Anyway, as it now appears that you did not intend to insinuate that Bush was involved in the Enron collapse, I apologize for having suggested otherwise.