David Rosenthal: belief

Transcript context

…I love that it's called the Raptors. Okay, this is Fastow. There were four entities, Raptor I, II, III, and IV. They also have other names for some reason that they referred to in multiple ways, but they're off balance sheet vehicles that Enron is basically using to hide large debt loads they're carrying and huge losses. In fact, I think the Raptors start co-signing deals or at least commingling, so that if one can't pay something off, then the other one’s on the hook for it. I think the Raptors are also like, what's the right word, apotheosis? Is that the biggest, most grandest example of Enron's awfulness in accounting? The Raptors, I believe, were intended to be hedges on some of Enron's investments. But the actual mechanism and the underlying collateral that they used for the hedge was Enron stock itself. They became this massively toxic. They didn't actually hedge anything, and all it did was double the exposure to a broad based stock market hit. It feels like even if Enron hadn't started falling apart before September 11th, September 11th would have been the trigger, because they had all this correlated risk. As soon as their stock stopped going up for any reason, then the whole thing would crumble.…

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