Brief History of Enron 
By Paul D. Miller, “ Brief History of Enron “ Nettime mailing list archives, January 16, 2002.

Another Enron executive told The New York Times the company's goal was to create "a regulatory black hole" in order to be "to be the first mover into a market and to make money in the initial chaos and lack of transparency."

As the night began to permanently close in on Enron, there was a brief glimmer of hope against hope that the "smaller, scrappier" Dynegy company would acquire the ailing giant. Perhaps the lesser competitor wasn't Enron's size, but it wasn't so small to hand Enron $1.5 billion cash as a calling card, as merger talks opened in November. But by the end of the month, the deal was practically dead.

In Dynegy CEO Chuck Watson's conference call with Enron management on December 3, he asked why cash-on-hand in the recent 10Q was $1.2 billion? Where was the $3 billion he had been expecting? Well, that nice $1.5 billion present had been burnt through. What's worse, Enron couldn't account for it. "Neither the treasurer nor the CFO could explain where the cash went. The 10-Q destroyed any remaining confidence and credibility."

Dynegy might have realized it was buying a big mess, and then purposely released language in a Nov. 21 release that sent a "lukewarm" signal. This scared the institutional investors even more. Simultaneous with this, Enron's credit rating was downgraded, and they were thus bound to pay out $690 million to a creditor. Whoops, there goes another half of cash-on-hand. Now Enron was down to $510 million.

The investment banks downgraded Enron's stock even lower, giving Dynegy an excuse to scuttle the deal. Their gentleman caller leaving town, Enron sued Dynegy for backing out of the marriage. With no one left to screw over, Enron ate their own flesh.

After they were abandoned by Dynegy there was no way Enron could recover, so management decided to do the most professional thing possible: they stuck their own workers with the tab. They had already planned for this a month and a half in advance: on October 17, when the S.E.C. announced it was investigating Enron, top brass deliberately switched 401(k) administrators. Their employees' retirement funds were already dedicated to holding only Enron stock. This move locked their employee's pensions into this stock as it began to nosedive. Enron executives unloaded their own equity on the market, and ran for the door stuffing their pockets with $600 million in cash. Enron robbed their common employees of their life savings. Sick employees were left without health insurance; the transitional health care system COBRA was a mess of unfinished paperwork.

Overseas employees in Moscow and the UK were told "find your own way back." An anonymous ex-employee who until recently helped run generators in the Generation Control Unit stated "none of Enron's laid-off H1B's [temporary overseas employees] have been given their expense funds to return home, something Enron is required to do by law." In Houston, he states, "Rich White Republicans remain above the law."

[ Comment by Walter Sorochan:]

The Enron connection to Credit Default Swaps: Thus began the first bizarre use of Credit Default Swaps [CDS ] as a speculation to make money using paper derivatives or bonds without any collateral to back it up. Enron bragged that the corporation had a special secret way to make money. The Enron way was sheer gambling under the table and that is why no one understood the money scheme. Enron fooled everyone, the two presidents, the politicians in congress and the senate, the bankers and the investors. It was easy to fool everyone, as no one could trace the money, no records were kept, and swapping then as now is still unregulated.

CDS has been adopted by banks as a way to make money. It is a scheme used by speculators on Wall Street to gamble on the future price of oil and commodities. Indirectly, the speculators have driven up the price of oil per barrel. This scheme is so politically corrupt that senate committees investing the price of oil and the real estate crash fail to ask the appropriate and relevant questions because they do not understand what CDS is. Or if the senators do, then they are hi-jacked by their campaign donors and lobbyists into silence.

Today the speculators who ran Enron swaps money machine are now working for Wall Street as money managers. They learned their trade from Enron and practice witch craft.

To this day, almost no one has heard of Credit Default Swap. No one mentions " Credit Default Swap!! Its not a dirty word so ask your banker and investment manager to explain " CDS " to you. I bet that you know more about it than they do!

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