July 17, 2006

The Smartest Guys In the Room

After reading the book by the same name earlier this year (or late last year), it only made sense to bring the Enron story home, by hitting up Netflix again and seeing the exploratory documentary that aimed to help us understand how the once-proud energy giant fooled customers, employees, bankers and Wall Street, growing to the 7th-largest company in the world, only to collapse in a historic meltdown that wiped out pensions for thousands, and set the securities world on its ear - where repercussions are still being felt today in boardrooms across America.

As usual, I would defer to the book as being substantially more strong than the film. The book helps to fully comprehend the magnitude of the financial tomfoolery, well detailed and documented, and mastered by CFO Andy Fastow, CEO Jeff Skilling and the late Chairman Ken Lay. Yet, the film brings home the pictures and comments depicting scenes like the California rolling blackouts that occurred largely in part due to market manipulation by Enron, and more directly tying the federal government's enabling the illegalities, in large part due to the close ties between Enron and both George W. Bush and his father.

While one can't directly state that Enron was solely responsible for any of the activities, the way that the company influenced the recall of Gray Davis, the stock market's dramatic declines in 2001 and beyond, the annihilation of Arthur Andersen, and development of Sarbanes Oxley, is jaw-dropping.

It's hard to see really where the business ended and the fraud began, and even harder to see what could have been done to prevent it - especially in a fast-paced market that demanded ever-growing profits, profit margins, and an inflated stock price. We've seen other companies post-Enron, like Worldcom, Global Crossing and Tyco follow suit in the corruption chain, but we were all a part of it, from the lowly investor who sat mouth agape at CNBC's flowing ticker, to the highest positions in our national government, and in our financial institutions.

If you haven't read the book, do it. If you prefer the DVD, go get that. But make sure you take the opportunity to go beyond the headlines of Enron - and see how the smartest guys in the room took us all for a ride.

Listening to ''Tribe & Trance (Voyager Remix)'', by John Digweed (Play Count: 6)

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