Sep 27

Exposed: Enron billionaire’s diabolical plot to loot worker pensions (Salon, Sep 26, 2013):

How an Enron billionaire, Wall Street and a major “nonpartisan” foundation are quietly robbing American workers

This Pew-Arnold partnership began informally in 2011 and 2012 when both organizations marshaled resources to try to set the stage for retirement benefit cuts in California, Florida, Rhode Island and Kansas. With legislative success in three of those four states, Pew and Arnold created a formal partnership in late 2012 that targeted another three states, Arizona, Kentucky and Montana.

This formal partnership continues today, with the organizations issuing joint reports and conducting joint legislative briefings advocating cuts to guaranteed retirement income. It is widely expected that this partnership will continue working in these same states and potentially expand operations into Colorado, Pennsylvania, Oklahoma and Nevada.

Should an Enron Executive Be Dictating Public Pension Policy?

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Jun 23

Former Enron CEO Skilling’s prison term cut to 14 years (Reuters, June 21, 2013):

HOUSTON, June 21 (Reuters) – A federal judge on Friday cut former Enron Corp Chief Executive Jeffrey Skilling’s prison sentence to 14 years from 24 years as part of a deal with prosecutors.

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May 08

Enron’s Skilling May Be Free As Soon As 2017 Or 11 Years Early (ZeroHedge, May 8, 2013):

As we reported a month ago, when we reported that Enron CEO Jeff Skilling may be released from prison early, moments ago we just learned that, to nobody’s real surprise, the mastermind of the biggest US bankruptcy in the early 21st century may be behind bars for just four more years, cutting his total sentence, which was scheduled to expire in 2028, by 11 years. From Bloomberg:

  • ENRON’S SKILLING AND JUSTICE DEPARTMENT REACH SENTENCE DEAL
  • ENRON’S SKILLING MAY BE RELEASED IN 4 YEARS, LAWYER SAYS
  • ENRON’S SKILLING WAS SENTENCED TO MORE THAN 23 YEARS IN PRISON
  • ENRON SENTENCE DEAL ALLOWS OVER $40 MLN RESTITUTION PAYOUT
  • ENRON’S SKILLING HELPED MASTERMIND MASSIVE FRAUD AT ENERGY FIRM

Indeed he did: which is why it is surprising he served any prison time at all.

So in brief: justice for all, except for those who have $40 million set aside for “restitution payments.”

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May 03

Flashback:

JPMorgan Employee Who Invented Credit Default Swaps is One of the Key Architects of Carbon Derivatives, Which Would Be at the Very CENTER of Cap and Trade


Will JPMorgan’s “Enron” Be The End Of Blythe Masters? (ZeroHedge, Mai 3, 2013):

One year after the infamous Jamie Dimon “tempest in a teapot” fiasco, which promptly turned out to be the biggest TBTF prop-trading desk debacle in history, things were going well for JPMorgan.

On one hand, the chairman of the TBAC (and thus US Treasury advisor and policy administrator), and former LTCM trader, Matt Zames, was just recently promoted to the sole second in command post at the biggest US bank (and 2nd biggest in the world) by assets, and first in line to take over from Jamie Dimon. On the other hand, one of Mary Jo White’s former co-workers, and a JPM defense attorney from Debevoise just became head of the SEC’s enforcement division, in theory guaranteeing that the US government would never do more than slap the wrist of JPM in perpetuity. Continue reading »

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Apr 04

Eric Holder Gets Busy: Enron’s Skilling May Be Released From Prison Over A Decade Early (ZeroHedge, April 4, 2013):

Former Enron CEO Jeff Skilling may be the latest beneficiary of the culture of pervasive permitted, even according to some – encouraged, crime. After being sentenced to prison for 24 years in the aftermath of Enron’s spectacular 2001 bankruptcy, the former CEO may be released after serving well less than half of his term. As a result his prison term, which scheduled to end in 2028, may be cut by more than half as a result of a new agreement with the Department of Justice. It appears that AG Eric Holder is so busy not prosecuting Wall Street for being Too Big To Prosecute, he has decided it is far wiser to spend his time productively by commuting the sentences of convicted financial felons, because apparently there is nothing more important to do.

Reuters reports: “Former Enron Chief Executive Jeffrey Skilling, who is serving a 24-year sentence over the company’s spectacular collapse, may get a chance to leave prison early. The U.S. Department of Justice posted a notice indicating that prosecutors are considering entering an agreement with Skilling that could result in his being resentenced. It is unclear how much Skilling’s term could be shortened under a resentencing agreement. Wednesday’s notice gives former Enron employees, stockholders and other victims of Skilling’s fraud that led to Enron’s 2001 bankruptcy a chance to object.”

From the DOJ filing:

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Apr 03

From Enron To Sino-Forest – Same Old Song (ZeroHedge, Mar 30, 2012)

Enron –> Worldcom –> Adelphia –> Lehman –> MF Global –> Greece –> Sino Forest –> ????

I would rank these as some of the more notorious bankruptcies. These weren’t normal course of business bankruptcies. These were dark and deviant. They have many similarities.

Opaque and convoluted accounting and finances are common to them all. Whether it was Jedi for Enron, repo 105 for Lehman, or off-market swaps with Goldman for Greece, they all used every trick in the book to keep debt off balance sheet and to obfuscate the risk.

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Feb 06

Paramedics Found a Bottle of Prescription Drugs by His Bed

John Taylor Skilling, a 20-year-old communications major at Chapman College in Orange, Calif., and the son of imprisoned ex-Enron chief Jeffrey Skilling, was found dead from what police say was a drug overdose.

Paramedics broke into his apartment after friends were concerned and found Skilling in the bedroom with a bottle of prescription drugs by his bed.

“They were supposed to meet him for dinner and he didn’t show up and they knew he was despondent over a recent break-up with a girlfriend,” Santa Ana Police Corporal Anthony Bertagna told Reuters. “They looked in the window and they could see him lying on the bed.”

“We don’t know yet if it’s a possible accidental overdose or suicide,” he said.

John Taylor Skilling, or JT as he was called, was 15 when his father was sentenced to a 24 years in a federal prison in Englewood, Colo.

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Aug 22

Regulators had long classified a private Swiss energy conglomerate called Vitol as a trader that primarily helped industrial firms that needed oil to run their businesses.

But when the Commodity Futures Trading Commission examined Vitol’s books last month, it found that the firm was in fact more of a speculator, holding oil contracts as a profit-making investment rather than a means of lining up the actual delivery of fuel. Even more surprising to the commodities markets was the massive size of Vitol’s portfolio — at one point in July, the firm held 11 percent of all the oil contracts on the regulated New York Mercantile Exchange.

The discovery revealed how an individual financial player had gained enormous sway over the oil market without the knowledge of regulators. Other CFTC data showed that a significant amount of trading activity was concentrated in the hands of just a few speculators.

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Apr 27

Food riots have broken out across the globe destabilizing large parts of the developing world. China is experiencing double-digit inflation. Indonesia, Vietnam and India have imposed controls over rice exports. Wheat, corn and soy beans are at record highs and threatening to go higher still. Commodities are up across the board. The World Food Program is warning of widespread famine if the West doesn’t provide emergency humanitarian relief. The situation is dire. Venezuelan President Hugo Chavez summed it up like this, “It is a massacre of the world’s poor. The problem is not the production of food. It is the economic, social and political model of the world. The capitalist model is in crisis.”

Right on, Hugo. There is no shortage of food (This is disinformation – The Infinite Unknown); it’s just the prices that are making food unaffordable. Bernanke’s “weak dollar” policy has ignited a wave of speculation in commodities which is pushing prices into the stratosphere. The UN is calling the global food crisis a “silent tsunami”, but its more like a flood; the world is awash in increasingly worthless dollars that are making food and raw materials more expensive. Foreign central banks and investors presently hold $6 trillion in dollars and dollar-backed assets, so when the dollar starts to slide, the pain radiates through entire economies. This is especially true in countries where the currency is pegged to the dollar. That’s why most of the Gulf States are experiencing runaway inflation. Continue reading »

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Apr 27

The military adventurers in the Bush administration have much in common with the corporate leaders of the defunct energy company Enron. Both groups thought that they were the “smartest guys in the room” — the title of Alex Gibney’s prize-winning film on what went wrong at Enron. The neoconservatives in the White House and the Pentagon outsmarted themselves. They failed even to address the problem of how to finance their schemes of imperialist wars and global domination.

As a result, going into 2008, the United States finds itself in the anomalous position of being unable to pay for its own elevated living standards or its wasteful, overly large military establishment. Its government no longer even attempts to reduce the ruinous expenses of maintaining huge standing armies, replacing the equipment that seven years of wars have destroyed or worn out, or preparing for a war in outer space against unknown adversaries. Instead, the Bush administration puts off these costs for future generations to pay or repudiate. This fiscal irresponsibility has been disguised through many manipulative financial schemes (causing poorer countries to lend us unprecedented sums of money), but the time of reckoning is fast approaching. Continue reading »

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Mar 18

The military adventurers of the George W. Bush administration have much in common with the corporate leaders of the defunct energy company Enron. Both groups of men thought that they were the “smartest guys in the room”, the title of Alex Gibney’s prize-winning film on what went wrong at Enron. The neo-conservatives in the White House and the Pentagon outsmarted themselves. They failed even to address the problem of how to finance their schemes of imperialist wars and global domination. Continue reading »

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Mar 14

Global confidence in the US economy has reached zero, as was proved by last month’s stock market meltdown. But there is an enormous anomaly in the US economy above and beyond the subprime mortgage crisis, the housing bubble and the prospect of recession: 60 years of misallocation of resources, and borrowings, to the establishment and maintenance of a military-industrial complex as the basis of the nation’s economic life Continue reading »

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