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Acquired / episode intelligence

Enron

29 Nov 2022 71 published claims 2 attributable people
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Speakers in the public record

David RosenthalBen Gilbert

Claim mix

belief 47uncertainty 9evaluation 6commitment 3recommendation 2prediction 2observation 1preference 1

Evidence policy

Every row below preserves an exact excerpt. Identified speakers are linked; unresolved voices are labeled and excluded from people counts.

Claim ledger

The useful parts, with receipts.

71 published records

02 / uncertainty

I don't know enough about the energy industry to say whether the innovations in financialization, securitization, creating energy derivatives, whether the existence of all that and Enron and its principles being highly responsible for creating them, whether that generated enough value to offset the massive value destruction of Enron, the company.

“I don't know enough about the energy industry to say whether the innovations in financialization, securitization, creating energy derivatives, whether the existence of all that and Enron and its principles being highly responsible for creating them, whether that generated enough value to offset the massive value destruction of Enron, the company.”
Speaker
David Rosenthal
Episode
Enron
Publisher
Acquired

09 / belief

The company is not giving guidance on just, hey, here's what we think revenue is going to be. They're not telling employees what you should tell employees, which is, I don't really know if this will go up or down, but here's the direction I think the intrinsic measurable parts of the business are going to go.

“The company is not giving guidance on just, hey, here's what we think revenue is going to be. They're not telling employees what you should tell employees, which is, I don't really know if this will go up or down, but here's the direction I think the intrinsic measurable parts of the business are going to go.”
Speaker
Ben Gilbert
Episode
Enron
Publisher
Acquired

19 / belief

A really funny thing—maybe we'll talk about this more in playbook—is at the same time this is (I think) really best reflected in both Skilling and Fastow, they were all so smart and yet also so stupid.

“A really funny thing—maybe we'll talk about this more in playbook—is at the same time this is (I think) really best reflected in both Skilling and Fastow, they were all so smart and yet also so stupid.”
Speaker
David Rosenthal
Episode
Enron
Publisher
Acquired

20 / belief

Fortunately, for young Enron and for Lay, but unfortunately for the rest of the world, this happens early enough in the quarter that the trading floor is able to dig out enough of these losses, that they don't have to report the whole billion dollar loss come earnings time, and only end up reporting I think less than $100 million of losses.

“Fortunately, for young Enron and for Lay, but unfortunately for the rest of the world, this happens early enough in the quarter that the trading floor is able to dig out enough of these losses, that they don't have to report the whole billion dollar loss come earnings time, and only end up reporting I think less than $100 million of losses.”
Speaker
David Rosenthal
Episode
Enron
Publisher
Acquired

24 / commitment

Just like an investment bank, they now start going out and doing these development deals and co-development deals with drillers, saying, hey, we'll fund you. We will finance your exploration, your drilling.

“Just like an investment bank, they now start going out and doing these development deals and co-development deals with drillers, saying, hey, we'll fund you. We will finance your exploration, your drilling.”
Speaker
David Rosenthal
Episode
Enron
Publisher
Acquired

25 / uncertainty

The appeal ends up going all the way up to the US Supreme Court, where I don't know what the right legal term is, but they end up sending it back down to a lower court for resentencing to redo the sentencing.

“The appeal ends up going all the way up to the US Supreme Court, where I don't know what the right legal term is, but they end up sending it back down to a lower court for resentencing to redo the sentencing.”
Speaker
David Rosenthal
Episode
Enron
Publisher
Acquired

27 / belief

I suspect, again, to the incentives and behaviors, a lot of the companies that stayed private longer weren't doing so for the stated reason that it was too hard and too unrest to be a public company. But they were doing it because there was too much benefit and money to be made by staying private, whether that was secondary sales, whether that was being able to prop up your company better than your business was performing, just the general opacity that the private markets afforded.

“I suspect, again, to the incentives and behaviors, a lot of the companies that stayed private longer weren't doing so for the stated reason that it was too hard and too unrest to be a public company. But they were doing it because there was too much benefit and money to be made by staying private, whether that was secondary sales, whether that was being able to prop up your company better than your business was performing, just the general opacity that the private markets afforded.”
Speaker
David Rosenthal
Episode
Enron
Publisher
Acquired

31 / belief

Whenever you're looking for the smoking gun, it's really difficult to find anyone's signatures or a discussion of this in the board minutes. It's especially difficult to find Jeff Skilling signature on anything, even though the whole agreement was Skilling will sign off as the final approver on (I think) deals, but definitely Fastow's compensation from this.

“Whenever you're looking for the smoking gun, it's really difficult to find anyone's signatures or a discussion of this in the board minutes. It's especially difficult to find Jeff Skilling signature on anything, even though the whole agreement was Skilling will sign off as the final approver on (I think) deals, but definitely Fastow's compensation from this.”
Speaker
Ben Gilbert
Episode
Enron
Publisher
Acquired

32 / belief

I think there's this pretty interesting thing around the results of Sarbanes-Oxley being stay private longer, that it's much more likely that fraud now happens in the private market than the public market, and that is basically what we saw with Theranos, with FTX.

“I think there's this pretty interesting thing around the results of Sarbanes-Oxley being stay private longer, that it's much more likely that fraud now happens in the private market than the public market, and that is basically what we saw with Theranos, with FTX.”
Speaker
Ben Gilbert
Episode
Enron
Publisher
Acquired

38 / belief

I think there's another thing that's in The Smartest Guys in the Room, where they reference the fact that I don't think for his particular sales, they classified under some weird thing where they didn't have to disclose it till after the fiscal year rather than in quarter, so he was able to sell an enormous amount before having to report it.

“I think there's another thing that's in The Smartest Guys in the Room, where they reference the fact that I don't think for his particular sales, they classified under some weird thing where they didn't have to disclose it till after the fiscal year rather than in quarter, so he was able to sell an enormous amount before having to report it.”
Speaker
Ben Gilbert
Episode
Enron
Publisher
Acquired

40 / belief

I think if you look at what's been reported about what he says publicly and what he says in all of his speaking engagements that he does, this is his message of, yeah, there was illegal stuff that happened.

“I think if you look at what's been reported about what he says publicly and what he says in all of his speaking engagements that he does, this is his message of, yeah, there was illegal stuff that happened.”
Speaker
David Rosenthal
Episode
Enron
Publisher
Acquired

42 / belief

Supposedly, everything he did was aboveboard. But then I think he took that money, used it as the seed money to start the firm, and then it ended up becoming one of the most successful funds of the past 20 years.

“Supposedly, everything he did was aboveboard. But then I think he took that money, used it as the seed money to start the firm, and then it ended up becoming one of the most successful funds of the past 20 years.”
Speaker
David Rosenthal
Episode
Enron
Publisher
Acquired

43 / belief

I think as soon as the business became the derivatives trading as an end, rather than as a means of hedging or as a means of cash flow stabilization and price predictability, basically, everything after that was bad.

“I think as soon as the business became the derivatives trading as an end, rather than as a means of hedging or as a means of cash flow stabilization and price predictability, basically, everything after that was bad.”
Speaker
Ben Gilbert
Episode
Enron
Publisher
Acquired

59 / belief

Cooper worked for a consulting firm that managed to get $60 million out before the board realized that he was not the most economical choice for the creditors. They fired him and brought in Ray, who I think was a board member.

“Cooper worked for a consulting firm that managed to get $60 million out before the board realized that he was not the most economical choice for the creditors. They fired him and brought in Ray, who I think was a board member.”
Speaker
Ben Gilbert
Episode
Enron
Publisher
Acquired

60 / belief

I think JP Morgan comes into the deal, too. JP Morgan mandates that, but they also mandate that all future Enron investment banking business will be handled by JP Morgan over the next 18 months.

“I think JP Morgan comes into the deal, too. JP Morgan mandates that, but they also mandate that all future Enron investment banking business will be handled by JP Morgan over the next 18 months.”
Speaker
Ben Gilbert
Episode
Enron
Publisher
Acquired

61 / belief

I think what they would do as part of it, too, is call up generation plants where they had relationships, and encourage them to shut down for maintenance at specific points in time when they knew it would cause blackouts and spike the price.

“I think what they would do as part of it, too, is call up generation plants where they had relationships, and encourage them to shut down for maintenance at specific points in time when they knew it would cause blackouts and spike the price.”
Speaker
David Rosenthal
Episode
Enron
Publisher
Acquired

62 / evaluation

You might know more than I do here, but I think Arthur Andersen went under not because they were found guilty of anything, but because when this all started playing out and they went in the news as being Enron's auditors for all this document destruction, for being really sloppy, they were complicit and sloppy, Enron needed to do a handful of restatements that were just straight up Arthur Anderson's fault.

“You might know more than I do here, but I think Arthur Andersen went under not because they were found guilty of anything, but because when this all started playing out and they went in the news as being Enron's auditors for all this document destruction, for being really sloppy, they were complicit and sloppy, Enron needed to do a handful of restatements that were just straight up Arthur Anderson's fault.”
Speaker
Ben Gilbert
Episode
Enron
Publisher
Acquired

63 / evaluation

You then start to have reporters getting involved, because reporters love getting tips from short sellers, because short sellers have a massive financial incentive to go and investigate and figure out what companies are going to fail, and that's a really good ‘where there's smoke, there's fire’ for reporters, so reporters start getting involved.

“You then start to have reporters getting involved, because reporters love getting tips from short sellers, because short sellers have a massive financial incentive to go and investigate and figure out what companies are going to fail, and that's a really good ‘where there's smoke, there's fire’ for reporters, so reporters start getting involved.”
Speaker
Ben Gilbert
Episode
Enron
Publisher
Acquired

65 / evaluation

I say, well, if I take the most aggressive possible circumstance for what the price of that could be over time, and the amount of volume that that could produce over time, and I take the most aggressive possible stance on the amount of interesting financial instruments that I could make out of that, I think you and I can agree that this deal that we're signing is a ludicrously valuable deal for me, Enron.

“I say, well, if I take the most aggressive possible circumstance for what the price of that could be over time, and the amount of volume that that could produce over time, and I take the most aggressive possible stance on the amount of interesting financial instruments that I could make out of that, I think you and I can agree that this deal that we're signing is a ludicrously valuable deal for me, Enron.”
Speaker
Ben Gilbert
Episode
Enron
Publisher
Acquired

66 / preference

There is this notion of like, okay, if the way to accelerate a country that is becoming—I don't know if developed country is the correct parlance anymore—an economy that has high employment, high quality of life, a good mix between information work and physical work, making real things in the real world, growing GDP rapidly, becoming a player on the world stage, whatever you want to call it, every single thing requires massive amounts of energy as a precondition.

“There is this notion of like, okay, if the way to accelerate a country that is becoming—I don't know if developed country is the correct parlance anymore—an economy that has high employment, high quality of life, a good mix between information work and physical work, making real things in the real world, growing GDP rapidly, becoming a player on the world stage, whatever you want to call it, every single thing requires massive amounts of energy as a precondition.”
Speaker
Ben Gilbert
Episode
Enron
Publisher
Acquired

68 / prediction

Those contracts have Transco buying the assets at an ever increasing price, because the prices of oil and gas have only been going up for the last decade, but market prices have just fallen.

“Those contracts have Transco buying the assets at an ever increasing price, because the prices of oil and gas have only been going up for the last decade, but market prices have just fallen.”
Speaker
David Rosenthal
Episode
Enron
Publisher
Acquired

71 / evaluation

The big cognitive dissonance, I think, is the reported profits versus the cash flow, because if you think about startups, lots of startups for instance can be reporting high revenue growth but be burning lots of cash as they're investing in growth, operations, and whatnot.

“The big cognitive dissonance, I think, is the reported profits versus the cash flow, because if you think about startups, lots of startups for instance can be reporting high revenue growth but be burning lots of cash as they're investing in growth, operations, and whatnot.”
Speaker
David Rosenthal
Episode
Enron
Publisher
Acquired
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