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<blockquote data-quote="UD" data-source="post: 27982" data-attributes="member: 316">In case you were wondering how Enron came into so much trouble, here is an explanation reputedly given by an Ag Eco professor at Texas A&amp;M, to explain it in terms his students could understand.CAPITALISM: You have two cows. You sell one and buy a bull. Your herd multiplies and you hire cowhands to help out on the ranch. You sell cattle. The economy grows and eventually you can pass the business onand your cowhands can retire on the profits.ENRON VENTURE CAPITALISM: You have two cows. You sell three of them to your publicly listed company using letters of credit opened by your brother-in-law at the bank, then execute a debt/equity swap with an associated general offer so that you get all four cows back, with a tax exemption for five cows. The milk rights of the six cows are transferred via an intermediary to a Cayman Island company secretly owned by the majority shareholder who sells the rights to all seven cows back to your listed company. The annual report says the company owns eight cows, with an option on one more. Now do you see why a company with $62 billion in assets is declaring bankruptcy?</blockquote>

[QUOTE="UD, post: 27982, member: 316"] In case you were wondering how Enron came into so much trouble, here is an explanation reputedly given by an Ag Eco professor at Texas A&M, to explain it in terms his students could understand. CAPITALISM: You have two cows. You sell one and buy a bull. Your herd multiplies and you hire cowhands to help out on the ranch. You sell cattle. The economy grows and eventually you can pass the business on and your cowhands can retire on the profits. ENRON VENTURE CAPITALISM: You have two cows. You sell three of them to your publicly listed company using letters of credit opened by your brother-in-law at the bank, then execute a debt/equity swap with an associated general offer so that you get all four cows back, with a tax exemption for five cows. The milk rights of the six cows are transferred via an intermediary to a Cayman Island company secretly owned by the majority shareholder who sells the rights to all seven cows back to your listed company. The annual report says the company owns eight cows, with an option on one more. Now do you see why a company with $62 billion in assets is declaring bankruptcy? [/QUOTE]

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