I made a comment in another thread about Enron, one of the more respected names in energy before the huge scandal and company meltdown.

Since that time, I feel the same way about the major energy companies (Sempra, Exxon, you name it) as I do about politicians since Duke Cunningham got caught.


What if Enron is the typical model, the others just haven't gotten caught yet? I know its unfounded, but we are seeing a very ugly side of capitalism these days, and the consumer is the one who is taking it in the shorts.

And yeah, maybe I'll throw major banks into the fray as well.

The ugly side of capitalism emerges when regulatory oversight is co-opted or disappears.

When you say "typical model" re: Enron, I assume you mean extreme accounting tricks to obfuscate real financial data as well as buying political influence. If that is the case, then, yes most of the major banking institutions are guilty of that behavior. I have far less knowledge of the energy companies.

I generally reserve the term 'conspiracy theorist' for a much broader indictment of conventional wisdom. I understand your point (I think), but one doesn't have to be out of the mainstream to see that the major banking institutions are behaving very much as Enron did before they imploded. In fact, they got themselves specifically excluded from the legislation preventing companies from taking like actions.

Look carefully at the announcements made by John Thain (ex-mortgage specialist for Goldman-Sachs), CEO of Merrill since December, and subsequent actions undertaken by that company. Nakedly illegal market manipulation. He should be in jail.

Yeah, that's what I'm talking about.

In every industry, there are thieves and peolpe who want more than legally entitled too. Since Enron, the rules have changed, and have in fact become a pain in the rear end. Takes so much longer to get things done now and has driven up the cost of doing business somewhat through the inefficiencies of the system.

Mark

I agree with that, Mark. In fact I have a good friend who's made a small fortune as a consultant on Sarbanes-Oxley compliance. Major pain for many, many companies.

What most people are hesitant to confront is the degree of evil people will tolerate when obscured behind a corporate facade.

And lest I be branded as an 'anti-corporatist', I am not. I own and operate a "C" corp, and have worked for a couple of corporate interests that were exceptionally benign.

Troop's point, though, is an important one. The degree to which we have been exposed to great financial peril, and by which players and for what purpose, is a topic that will get a great deal of attention in the next few years.

In every organization, it is the acts of a few that create the bottlenecks for everyone. I am a tightwad about spending university money, but I often find situations where the best deal is not always the one allowed. I have a machinist that does a lot of work for me. He is reliable, competitive, and honest. I took a pump to him to be serviced and he found some major problems with it. The repairs are now above the minimum requirements for bidding. So now, I am waiting for weeks to get a couple of estimates on new pumps for comparison. A total waste of time, but an issue I have to deal with as a matter of rule.

Our company is anal about Sarbanes Oxley compliance as well as compliance with all regulations, but I have noticed how everything has slowed down. Takes 3 to 4 times longer now to get anything accomplished. Drives costs up significantly all because of a few major knuckleheads.

Mark