IP: In case you haven't seen this about Enron

[David Farber <dave () farber net>]

>  In case you haven't seen this about Enron
>
>  First, some brief historical definitions:
>
>     * 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. You must take care of them, but the
>       government takes all the milk and may give some back to you.
>
>     * 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
>
>  And now, the "Enron Style"
>
>  You have two cows. You borrow 80% of the forward value of the two
>  cows from your bank then buy another cow with 5% down and the rest
>   financed by the seller on a note callable if your market cap goes below 
> $20B at
>   a rate 2 times prime. You now sell three cows to your publicly listed
>   company, using Letters of credit opened by your brother-in-law at a 2nd 
> bank,
>   then execute a debt/equity swap with an associated general offer so that
>   you get four cows back, with a tax exemption for five cows. The milk 
> rights of
>   six cows are transferred via an intermediary to a Cayman Island company
>   secretly owned by the majority shareholder who sells the rights to 
> seven cows
>   back to your listed company. The annual report says the company owns eight
>   cows, with an option on one more and this transaction process is upheld by
>   your independent auditor and no Balance Sheet provided with the press
>   release that announces that Enron as a major owner of cows will begin 
> trading
>   cows via the Internet site COW (cows on web).

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