Crookest Guys in the Room

Wednesday night that great little red envelope was in my mailbox and in it; Enron: The Smartest Guys in the Room. Being a Californian I witnessed the rolling black-outs and rising electricity prices. During the time neither I nor a whole lot of people really knew what was going on, but I came to find out that Enron was involved somehow. The documentary goes through the start of the company and the perceived brilliance of Kenneth Lay. This son of a preacher man with humble roots would eventually screw thousands upon thousands of people out of their retirement savings. The film explained what Enron did as a business which was creating an open market for natural gas and electricity. I’m not a bright guy so much of it didn't make sense to me, but the one thing that stuck out was the concept of Mark to Market Accounting
which allowed Enron to take future profits based on a current deal. For instance I (as a corporation) could by a car dealership and claim that I will make $300 Billion in 5 years, yet realize those profits now. What happens next is the same thing that happened to Enron, the stock went through the roof (they made $300 Billion in one year). Everybody loved the stock and no one questioned how or why the stock price was so high and kept going up. If you as an investment banker questioned it, your company (ie Morgan Stanley) lost the business. The stock was over-valued, everyone knew it and no one cared because they were making money, shit-loads of money.

Kennyboy as his wife, friends and one George W. Bush called him was a crooked son of a preacher man. His close relationship with the Bush family is scary. Now I am sure that all politicians have connections that may not be the most wholesome, but when Bush declines to help California by capping the energy costs because that would affect his buddies bottom line, corruption is the only word that comes to mind.

So near the end of Enron, people in California were calling for Gov. Gray Davis' head. And why not, he was governor while they had no electricity or couldn't pay their electric bills. It wasn't his fault, but who else was there to blame? Pete Wilson, whose legislation allowed Enron to screw the people of California, was out of office, Enron was just selling the energy at the market price (allegedly) and the federal government was staying out of it. So while the natives were getting restless and people were talking about a recall election. Kennyboy and a few of his friends had a meeting about California in Los Angeles. One of the guys in the room...Arnold Schwarzenegger.

The whole thing is crooked and the film told the story well.