Enron wahrscheinlich pleite - höchstgefährlich!

S&P hat Enron auf Müllbondstatus heruntergestuft. Dies bedeutet, dass Enron - schon länger schwer gebeutelt - auf die Schnelle 3-4 Milliarden Dollar aufbringen muss. Niemand gibt aber Enron Geld.
Enron war der grösste Energiehändler der USA! Keiner weiss genau, welche Leichen da noch im Keller sind! Die Enron-Pleite kann LCTM in den Schatten stellen. Damals war die Gefahr einer weltweiten Bankenkrise bei Nacht und Nebel durch Greenspan verhindert worden! Eine Enron-Pleite kann auch den DOW um 500 Punkte nach unten reissen!

werden wir erst in den nächsten Tagen erhalten....und dann auch nicht umfassend, weil gar nicht alles ans Licht der Öffentlichkeit gelangen wird.

So long,
Calexa

On Wednesday, Enron said that it had temporarily suspended "all payments other than those necessary to maintain core operations".

"We are evaluating and exploring other options to protect our core energy businesses," said Kenneth Lay, Enron chairman and chief executive.

The company has hired Blackstone Group, a well-known restructuring and bankruptcy specialist, to advise it.

Enron accounts for about 25 per cent of energy trading in the US and has a similar share of the European market. Its disappearance could cause liquidity problems in US energy markets, fuel volatility and perhaps drive some counterparties out of business.

Dynegy, its smaller rival, on Wednesday pulled the plug on its rescue bid for Enron after failing to agree renegotiated terms for the deal. "We feel we had no choice but to act in our shareholders' interests," said Chuck Watson, Dynegy chairman and chief executive. "We knew when to say no and, this morning, we said no."

Credit rating agencies also recognised the reality of Enron's plight by downgrading its debt to junk. They refrained from downgrading Enron pending the Dynegy bid and their action alone means Enron has to repay, refinance or put up extra cash backing for $3.9bn of debt. Enron shares, which at their peak last year traded at $90, fell 85 per cent on Wednesday to close at 61 cents setting a new New York Stock Exchange record for trading volume in a single stock.

"Enron is on the verge of filing for bankruptcy. I don't see any way they can avoid it," said Andre Meade, an analyst with Commerzbank.

Bankers and analysts have been warning about the systemic risk in the energy and financial sectors since Enron's crisis of confidence deepened last month. Dynegy's bid and the rating agencies' decision not to downgrade had provided a stay of execution.

Steve Bergstrom, Dynegy's chief operating officer, said on Wednesday he believed market participants had been able to prepare themselves for the potential withdrawal of Enron from the energy markets it dominated.

But, reflecting the concerns of other counterparties, he said there had been a "clear flight to quality" over the past few weeks.

Dynegy and other energy traders have stopped trading with Enron because of a lack of credit support for trades.

On Wednesday, the ripple effects from Enron's problems hit the shares of JP Morgan Chase and Citigroup, Enron's main creditors, which tumbled 5.78 per cent and 5.44 per cent respectively.

Dynegy said Enron had breached the merger agreement it signed less than three weeks ago. In what could be the first step towards the break-up of Enron's assets, Dynegy exercised its right to acquire the company's Northern Natural Gas pipeline under the agreement. Enron indicated it might dispute Dynegy's right to the pipeline.

Enron war 1985 durch die Fusion der regionalen Erdgasleitungsfirmen Houston National Gas und InterNorth entstanden. Das Unternehmen nutzte die in den späten achtziger Jahren beginnende Liberalisierung des amerikanischen Erdgas- und die spätere Entregulierung des US-Strommarktes konsequent aus und entwickelte sich zum weltgrößten Energiehändler.

Enron-Chef Kenneth L. Lay (59), ein guter Bekannter von US- Präsident George W. Bush, hatte das Pipeline-Unternehmen bis zum Jahr 2000 zu einem weltweit operierenden Energie- und Rohstoffhandels- Konzern mit 100 Milliarden Dollar Jahresumsatz gemacht, der in der Fortune-Liste der größten US-Unternehmen auf Platz sieben lag.

Der promovierte Ökonom, Marineoffizier und Erdgasindustrielle hatte schon früh erkannt, dass Versorgungsunternehmen langfristige Erdgas- und Strom-Lieferverträge haben wollten, während die Produzenten an möglichst hohen Preisen interessiert waren. Enron trat als Zwischenhändler auf, und vermittelte die Transaktionen, gegen lukrative Vermittlungsgebühren versteht sich.

Dann weitete sich das Enron-Geschäft mit stark schwankenden Strom- und Erdgaspreisen in den letzten Jahren dramatisch aus. Mit dem immer höheren Handelsvolumen mit immer mehr Rohstoffen stiegen die Handelsrisiken und Enron verschuldete immer stärker. Enron steht heute mir rund 20 Milliarden Dollar in der Kreide.  

Noch im vergangenen Jahr legte Enron eine beeindruckende Bilanz hin: Der Umsatz betrug 101 Milliarden Dollar (223,7 Millionen Mark/114,3 Millionen Euro), der Gewinn mehr als eine Milliarde Dollar. In der Liste der 500 wichtigsten US-Unternehmen des Magazins "Fortune" lag Enron auf dem siebten Platz, weltweit auf dem 16.

Das Problem dabei, die Bücher enthielten nicht die ganze Wahrheit. Um die enormen Kosten für die Zukäufe zu verschleiern, gründete Enron unzählige Nebenunternehmen, in denen die Schulden vor den Augen der Investoren versteckt wurden. Hinzu kam ein offenbar unfähiger Finanzdirektor. Am 16. Oktober musste Enron offenbaren, dass sich unter anderem 1,2 Milliarden Dollar seines Kapitals einfach in Luft aufgelöst haben - vernichtet in Fonds, die vom eigenen Finanzdirektor gegründet worden waren. Dieser ist inzwischen gegangen, die Schulden aber sind geblieben.

Enron muss nach Berechnungen der Ratingagentur Fitch in Kürze sieben Milliarden Dollar an Schulden begleichen, die nicht in den Büchern standen. Hinzu kommen Verpflichtungen von 3,9 Milliarden Dollar durch ebenfalls kriselnde Partnerunternehmen. Und ganz offiziell gibt es dann sowieso noch 13 Milliarden Dollar Schulden, die auch abgezahlt werden müssten.

Dieses Geld aber hat Enron nicht, auch Dynegy will nun nicht helfen. Am Mittwoch kündigte Enron deshalb schon einmal an, dass es vorerst nur Rechnungen bezahlen werde, die für die Aufrechterhaltung des Betriebs unbedingt nötig sind. Ein Gang zum Insolvenzrichter wurde in der Erklärung noch nicht erwähnt - letztlich wird ihn Enron aber wohl antreten müssen. Dabei könnte der Energiekonzern einen traurigen Rekord aufstellen. Die bisher größte Firmenpleite in den USA hatte 1987 der damals 35 Milliarden Dollar schwere Mineralölkonzern Texaco hingelegt. Dies könnte Enron nach den Berechnungen von Experten noch toppen.

Viele Geschäftspartner reduzierten bereits vor Wochen ihr Engagement mit Enron. Der deutsche Energieversorger EnBW begann nach eigenen Angaben, Positionen zu schließen, als Ende August ein erster Verdacht aufgekommen sei. "Im September waren wir dann wirklich besorgt", sagte Markus Suessmann, Chef des Energiehandels bei EnBW. Weitere Handelspartner beendeten nach eigenen Angaben den Handel mit Enron mittlerweile komplett.

Zu den Haupthandelspartnern gehören bislang die deutschen Versorger E.ON und RWE sowie die britische Innogy und British Energy. Auch die US-Stromkonzerne TXU, AEP, Dynegy und Duke Energy handelten mit Enron. Die Internet-Plattform für den elektronischen Energiehandel EnronOnline, die 1999 ihren Dienst aufnahm und am Mittwoch den Handel beendete, galt als Standard für Energiehändler und Versorger. Etwa 60 % des Enron-Handels liefen über diese Plattform.

Neben dem Stromhandel betreibt Enron in Europa Kraftwerke in Italien, Polen, Griechenland und Großbritannien. Das Unternehmen entstand 1985 aus der Fusion der US-Versorger Houston Natural Gas und InterNorth. Die Enron-Aktien stiegen bis August 2000 auf einen Höchststand von 90,56 $. Einst wurde Enron in der Fortune-500-Liste der größten US-Unternehmen auf Rang sieben geführt. Am Mittwoch schlossen die Aktien an der New Yorker Börse bei 0,61 $ mit dem Rekordumsatz von 181,86 Mill. Aktien - mehr als je zuvor an einem Tag in einer Aktie umgesetzt wurde. Sollte Enron in Konkurs gehen, wäre dies einer der größten Firmenzusammenbrüche in der Geschichte der USA.

U.S. government to rescue ENE (rumors)
by: on_trend
Long-Term Sentiment: Buy  11/29/01 12:24 pm
Msg: 84584 of 84638

bigcharts.marketwatch.com/news/...uid={70AFCC54-8A99-4CEE-A5FE -83F0F802E7E8}&newsid=793816557&orig=charting&time=8&symb=:ENE&sid=1803&source=h tx\http2_mw

The Enron Corp. saga continues to dominate the market Thursday with speculation mounting that one of two options are now available to the U.S. energy giant: the declaration of Chapter 11 bankruptcy and a restructuring of the company's debt under these conditions, or a massive rescue package bailout by the U.S. government. What has become clear is that most market observers do not expect Enron to vanish, given the ripple effect this would have for the U.S. economy, and, by implication, for the Bush Presidency.


Many, however, are speculating that the U.S. government will step in to rescue Enron. "In the present climate, politicians could easily take extraordinary measures to rescue Enron in the name of national energy security and stability. People would not only accept such a move, they would applaud it," one market observer said. Another factor in its favor is that Enron is not unfamiliar at a personal level with the highest authority in its land - the company and its employees have been the single biggest group of contributors to President George W. Bush's campaigns.

EnronOnline Reopens, Begins Trading Natural Gas, Power, Metals
By Margot Habiby


Houston, Nov. 29 (Bloomberg) -- Enron Corp., the energy trader whose buyout by rival Dynegy Inc. was canceled yesterday, resumed trading in natural gas, electricity and metals on its EnronOnline Internet market.

The products traded on EnronOnline today are ``a small subset'' of the usual offerings, Enron spokesman Eric Thode said. The products ``were determined by the traders,'' he said. EnronOnline shut yesterday after Standard & Poor's cut Enron's credit rating to junk status.

Shares of Enron fell 21 cents to 40 cents in midday trading. They fell 85 percent yesterday after Dynegy abandoned its bid after the credit-rating cut. Both companies are based in Houston.

Enron still is trading other commodities by telephone, Thode said.

von bereits bestehenden Kontrakten. Was Neues wird da nicht abgeschlossen!

Analyst surveyed by Thomson Financial/First Call are currently expecting 2001 earnings-per-share of $2.45, on average, and 2002 EPS of $2.74, a 12-percent increase. Shares fell by 7 cents to $26.98 in recent action.

Duke Energy

Charlotte, N.C.-based Duke Energy has taken steps to manage its exposure to Enron, the company said Thursday, and has instituted a trading halt.

Richard Osborne, executive vice president and chief risk officer of Duke (DUK: news, chart, profile), said that while the company didn't completely cease its trading with Enron until Wednesday, it has been limiting its exposure to it. Currently, it has about $100 million in unsecured exposure.

Enron's financial problems haven't shaken Duke's earnings expectations. Duke still sees 10 percent to 15 percent in compound annual earnings-per-share growth from a base of $2.10 in 2000 and will likely exceed 15 percent earnings growth for 2001.

In recent trading, shares were up 4 cents at $36.26.

Dominion



Power and natural-gas producer Dominion pegged its pre-tax credit exposure to Enron at $11 million for past sales, but it also has forward commodity sales contracts representing exposure of less than 5 percent of earnings.

Shares fell 26 cents to $58.29.

Dominion (D: news, chart, profile) also reaffirmed its expectations for public operating earnings of $4.15 a share or better in 2001, a per-share profit of $4.90 to $4.95 in 2002 and 10 percent annual earnings growth after 2002.

Exelon

Electric utility company Exelon said its net exposure to Enron is less than $10 million, and direct gross exposure for current energy sales from the company to Enron is less than $20 million.

The Chicago-based company (EXC: news, chart, profile) has also halted new trading activity with the embattled energy trader. The stock rose 39 cents to trade at $43.59.

Sempra

Sempra Energy pegged its overall financial exposure to Enron and its affiliates at less than $15 million.

Shares of the company (SRE: news, chart, profile), which is parent to California's cash-strapped San Diego Gas and Electric, fell by 13 cents to stand at $22.57.

Calpine

Calpine emphasized that it has "no net exposure" with Enron or the energy trading company's subsidiaries.



As a result, shares jumped $1.51, or 7.3 percent, to $22.61.

The San Jose, Calif.-based power company (CPN: news, chart, profile) has an agreement in place that allows it to offset the amounts owed by Enron with amounts it owes to that company. Calpine's dealings with Enron, which it has been gradually decreasing over he past several months, have been for power and natural gas sales and purchase contracts.

El Paso

El Paso Corp. has a minimal financial exposure of $50 million to Enron and doesn't expect any adverse earnings impact from Enron's difficulties.



Wise emphasized that El Paso's (EPG: news, chart, profile) earnings outlook "remains strong" and that its merchant energy business is gaining market share by providing customers with reliable fuel supply services.

El Paso has been "systematically" reducing its trading with Enron over the past several weeks, the company said, and because of Enron's loss of investment grade status, new business will have to be supported by cash collateral. Still, the stock fell 34 cents to $44.57.

Mirant

Atlanta-based Mirant pegged its pretax exposure to Enron at $50 million to $60 million, emphasizing that it began to limit its exposure risk early in the Enron crisis.

Mirant (MIR: news, chart, profile) said it's "confident" that the energy marketing sector is "mature enough" to function without Enron, and has also seen new business opportunities develop because of Enron's situation. Shares of Mirant traded at $24.85, up $1.46.

Denbury Resources

Dallas-based Denbury Resources said that no payments from Enron are overdue, but it can't predict the amounts, if any, it will eventually get under the Enron hedge contracts.

If Enron were to pay off certain natural-gas price floor contracts set for 2002 and 2003, Denbury (DNR: news, chart, profile) would get about $19 million during 2002 and another $7 million in 2003, the company said. Shares fell 62 cents to $6.15.

Myra P. Saefong is a reporter for CBS.MarketWatch.com in San Francisco

While the Houston-based company's disintegration has raised questions about its securities accounting procedures, federal energy regulators said there was no sign of spillover damage to U.S. electricity and natural gas markets. Both markets have plentiful supplies at this time, unlike last winter.

Republican lawmakers said there was no need for Congress to get involved in Enron's business collapse.

Rep. Billy Tauzin, the Louisiana Republican who heads the House Energy and Commerce Committee, said lawmakers did not need to step in unless Enron precipitated another energy crisis like the one seen in California last winter.

``Certainly if there is any disruption in energy markets as a result of Enron's collapse our committee will respond quickly,'' said a spokesman for Tauzin. ``But right now there is absolutely no sentiment, none, for Congress to rush in and try to prop up the company.''

``It's not our job to bail out companies that make bad business decisions,'' the Tauzin spokesman added.

ANY IMPACT ON CONSUMERS?

The Democrat who heads the Senate Energy Committee was expected to make a statement later on Thursday on the Enron situation. It was unclear whether Sen. Jeff Bingaman of New Mexico would call for formal hearings on the effect of the company's problems on energy markets.

``We're looking at our options,'' said a Senate Energy committee spokesman. ``We have to look at what effect Enron will have on the consumer.''

Any Enron hearings would likely have to wait until Congress returns from its holiday recess in late January, as lawmakers are swamped with other legislation and spending bills, the spokesman said.

Another Democrat, Michigan Rep. John Dingell, earlier this month called for an investigation of the accounting firm that handled Enron's books. Dingell is the ranking Democrat on the House energy panel.

Some analysts said Enron would find little sympathy in Washington, despite the company's close ties to the Bush administration. Enron chairman Kenneth Lay was a major contributor to President George W. Bush's election campaign, and was a key adviser on energy policy earlier this year.

``It's not like (Enron)... had an act of God,'' said Christine Uspenski, a utility analyst with Schwab Capital Markets.

``They're far more culpable. No one put a gun to their head and told them to be cute with their accounting,'' she added.

Enron wird nächste Woche, vielleicht schon am Montag Konkurs anmelden. Diese Meldung steht in der New York Times, der Financial Times und bei BBC. Auch David Faber, der zuständige Analyst von MSNBC sieht absolut keine andere Lösung! Der Grund, warum die Konkursmeldung solange dauert, ist schlicht und einfach, dass man da bestimmte Papiere einreichen muss und die sind nicht fertig. Sobald sozusagen die Papiere beisammen sind, gehen sie zum Gericht!
Enron Europa ist bereits unter einer Art zwangsverwaltung. Auch in anderen Ländern wie in Indien und Südamerika scheint es bereits zu Konfiskationen und Blockaden gekommen zu sein. Das heisst, Gläubiger versuchen sich an Enron-Eigentum schadlos zu halten. Bei einem Konkurs, der mindestens 3 Jahre dauert bis zu einer endgültigen Abwicklung werden die Aktionäre nichts bekommen. Viel Spass beim Zocken!  

Enron wolle voraussichtlich den Konkursschutz (Chapter 11) in Anspruch nehmen, um zeitweise vor den Forderungen seiner Gläubiger geschützt zu sein, hieß es in den Enron nahe stehenden Kreisen. "Sie arbeiten an den Details. Morgen wäre es aber zu früh, Anfang nächster Woche wäre deshalb ein realistischerer Termin", fügten die Insider am Donnerstag in Houston hinzu. Unklar war, ob Enron möglicherweise sein Geschäft in einer kleineren Gesellschaft aufrechterhalten will oder nicht.

Die Geschäfte von Enron sind inzwischen fast zum Erliegen gekommen. Die Stromlieferungen nach Kontinentaleuropa wurden am Freitag eingestellt, wie aus Handelskreisen in Frankfurt verlautete. Die Prüfungsgesellschaft PricewaterhouseCoopers hatte am Vortag in London die Verwaltung der europäischen Tochter übernommen. Das Europa-Geschäft von Enron soll laut PricewaterhouseCoopers abgespalten werden. Enron Europe werde noch am Freitag eine Mitteilung zum Stellenabbau in Europa machen, hieß es in den Handelskreisen weiter.

Nur wenige Marktteilnehmer wollten am Donnerstag an den US-Rohstoffbörsen mit Enron handeln. Die New Yorker Mercantile Exchange (Nyme) schränkte den gesamten Handel mit Enron ein. Dies führte dazu, dass der Preis für Öl an der Nyme zurückging. Die einst lukrative Internet-Handelsplattform, EnronOnline, öffnete am Donnerstag lediglich, damit die Marktteilnehmer nach Angaben eines Unternehmenssprechers ihre Positionen mit Enron abwickeln konnten.

Vier der größten australischen Banken haben ihre Enron-Verbindlichkeiten am Freitag mit rund 50 bis 100 Millionen Dollar beziffert. Auch zahlreiche japanische Broker-Firmen haben Enron-Anleihen in ihren Geldmarkt-Fonds. Die Deutsche Bank hatte am Donnerstag bekannt gegeben, ihr Verlust würde im schlimmsten Fall weit weniger als 100 Millionen Dollar betragen. Dagegen hat die Credit Lyonnaise nach eigenen Angaben rund 250 Millionen Dollar - die Hälfte davon unversichert - in Enron stecken. Die Versorger-Holding Duke Energy Corp beziffert ihre unversicherten Ausstände mit 100 Millionen Dollar. Die größten Ausstände haben US-Banken wie J.P. Morgan Chase & Co mit 500 Millionen Dollar an unversicherten Ausständen und die Citigroup Inc mit 700 bis 800 Millionen Dollar, wovon die Hälfte unversichert ist, wie die Banken am Vorabend mitteilten.

The collapse of Enron's stock, from nearly $90 a share a year ago to pennies per share now, has wiped out nearly $30 billion in shareholder value. Yesterday, members of Congress called for investigations into the financial losses suffered by Enron's 21,000 employees, many of whom had Enron stock in their company retirement plans. Sen. Barbara Boxer (D-Calif.) said Enron may have violated federal pension plan law.

The House Energy and Commerce Committee announced it will begin an investigation of Enron's collapse. "How a company can sink so far so fast is very troubling," Chairman W.J. "Billy" Tauzin (R-La.) said through a spokesman.

The committee will focus on Enron's complex investments in outside partnerships, some run by its former chief financial officer, that had billions of dollars indebts that were not disclosed in the company's financial statements. The extent of Enron's involvement in the partnerships was not known until last month, when Enron disclosed it had overstated earnings by $583 million in the past four years.

"We need to know if the company's accounting practices masked any severe underlying financial problems," Tauzin said.

Securities and Exchange Commission Chairman Harvey L. Pitt said the commission will complete its ongoing probe of Enron's accounting and financial disclosures "thoroughly but quickly and, if wrongdoing occurred, make sure that the people who were responsible for that will answer for it," Bloomberg reported.

Dynegy Inc., the Houston energy trader that abandoned a proposed rescue of its larger crosstown rival on Wednesday, said it faces $75 million in potential losses. Dynegy said it will exercise its right from the buyout agreement to acquire Enron's Northern Natural Gas system in exchange for $1.5 billion that ChevronTexaco, a major Dynegy shareholder, invested in Enron to help keep it running.

Duke Energy, one of the nation's largest energy providers, said it has about $100 million in unsecured claims against Enron for future energy supplies that the Houston company has committed to deliver, plus related financial obligations. Williams Cos., a Tulsa-based energy company, said it too faced a possible $100 million loss if Enron could not fulfill its energy supply contracts.

But Duke also stands to gain from Enron's demise. The Charlotte-based company competes with Enron as a buyer and seller of energy products and its business has leaped 30 percent over the past month, as Enron's financial crisis mushroomed.

"The opportunities are increasing. Duke is a major beneficiary," said Harvey Padewer, group president of energy services.

Enron transformed itself from a natural gas pipeline company into the leader in energy trading under its longtime chairman and chief executive, Ken Lay, a fundraiser and close confidant of President Bush and the Bush family. Several administration officials have ties to the firm, including Army Secretary Thomas E. White Jr., who was an Enron executive.

Even before the financial disclosures precipitated a crisis, Enron's profits had suffered from falling energy prices and costly, failed investments in Internet networks and foreign projects.

At its peak, Enron handled as much as 20 percent of the nation's energy transactions, which included basic contracts to deliver natural gas from wells to pipelines for distribution to heating customers, and the output of electric power plants sold to utilities. Around those supply contracts were woven a far larger number of complex financial transactions designed to limit the risks of sudden energy price changes or to capitalize on those changes by correctly guessing where prices were headed.

Through its EnronOnline Web site, Enron offered to buy or sell energy from suppliers at prices it determined. Enron was the middleman and buyers and sellers were never directly in contact.

EnronOnline resumed operations on a limited basis yesterday, after shutting down Wednesday, so traders could finish transactions and offset credit risk with the company. The New York Mercantile Exchange barred floor members from accepting orders from Enron without special written authorization, Bloomberg reported.

As customers have fled Enron in the past month, many went to a major competitor, the Atlanta-based Intercontinental Exchange. The ICE system was formed in March 2000 with support from more than a dozen energy companies as an alternative to Enron.

"We see our volume taking off astronomically. We're literally being crushed by people trying to get on our system," said ICE's chief executive, Jeffrey Sprecher. It is now handling $2.5 billion in trades a day, Sprecher said. Yesterday, he ordered 10 large computers shipped in from the West Coast to Atlanta to bolster the company's trading system.

This shift in business is another heavy blow to Enron, undercutting what had been the company's chief asset -- hundreds of skilled traders and a computerized trading system that would cost more than $100 million to duplicate, according to some analysts.

Nancy Rapoport, dean of the University of Houston Law Center and a bankruptcy professor, said it might well be beneficial for Enron to file for bankruptcy protection "to avoid death by paper cuts, all the lawsuits" from various creditors.

But if most of its customers are gone for good, as many analysts predict, Enron's chances of emerging from bankruptcy would be remote, said Jim Spiotto, a Chicago attorney and bankruptcy expert.

Enron's situation may most closely resemble the plight of Drexel Burnham Lambert, a leading Wall Street investment firm that failed following the trading scandals of the late 1980s, Spiotto said. Its business -- like Enron's -- was based on relationships and confidence, and when those evaporated, so did Drexel, he said.

Enron "will never be what it was," he said. "The problem with a death spiral is, it's a crisis of confidence and it's very hard to get people to come back. They aren't manufacturing something that people in the United States need. They're doing deals, and it takes two to do deals."

David H. Wiggs, now the general manager of the Los Angeles Department of Water and Power, said his experience as chairman of El Paso Electric Co. as he shepherded it through Chapter 11 in the mid-1990s tells him that no one is likely to come out a winner in the Enron case.

He said any Enron bankruptcy case, because of the firm's size and complexity of its contracts, will be "incredibly complicated."

Banking analysts say at least eight U.S. banks have financial exposure to Enron, with the total amount estimated as high as $2.6 billion. In addition to Citigroup and J.P. Morgan Chase, the banks are Bank of America, Bank of New York, FleetBoston Financial, BankOne, Wachovia and SunTrust.

With the exception of Citigroup and J.P. Morgan Chase and possibly Bank of America, most are expected to have risks under $100 million, according to Merrill Lynch & Co. bank analyst Judah Krashaar.

But most agree Citigroup and J.P. Morgan Chase have the biggest exposure, including as much as $500 million each in unsecured bank loans, letters of credit and complex financial contracts known as derivatives, industry analysts and executives say. Citigroup and J.P. Morgan Chase executives are estimating they will get 20 percent to 25 percent -- or $100 million to $125 million each -- back on their unsecured exposure, bank sources say, which means they expect to lose as much as $400 million each.

Losses from Enron's troubles would be, in the words of one banker, "a black eye" for banks but would by no means cripple any company, industry analysts and executives said yesterday.

Staff writers Kenneth Bredemeier and Kathleen Day contributed to this report.



© 2001 The Washington Post Company  

Activity at many Enron divisions in more than 40 countries has ground to a halt. With 21,000 employees, it has interests in everything from marketing natural gas and electricity to dealing in such commodities as metals, coal, pulp and paper.

Enron reopened EnronOnline yesterday to allow traders to unwind positions and manage their credit exposure to the company.

The seemingly inevitable collapse of Enron is expected to open up a Pandora's Box for regulators who allowed the company to operate as a bank through complicated derivatives and futures selling.

Sen. Tom Daschle, the Senate Majority Leader, demanded a Congressional inquiry into the collapse of Enron and the impact on the entire U.S. energy industry. "We certainly need to try to find answers to the questions involving the collapse of Enron," said Mr. Daschle, a Democrat from South Dakota. "I think we need to find as much information as possible, and make some assessments of whether it's indicative of energy in the larger context and if it is, what we ought to do about it," he said. "It raises some very serious questions."

Rep. Billy Tauzin, the Louisiana Republican who heads the House Energy and Commerce Committee, said lawmakers did not need to step in unless Enron precipitated another energy crisis like last winter's in California.

Earlier yesterday Rep. John Dingell, a Democrat from Michigan, called for an investigation of the accounting firm that handled Enron's books.

The company began to unravel just days after it announced it would merge with Dynegy, another energy trader, in a deal pegged at US$8.4-billion in Dynegy stock. Subsequently, Then Enron disclosed to the U.S. Securities & Exchange Commission that it overstated US$580-million in profits between 1997 and this year.

More damning, it admitted it had parked about US$500-million debt off its books into lucrative partnerships with its top executives and that it would have difficulty meeting obligations if its credit rating was downgraded. The SEC is investigating.

Standard & Poor's and Moody's downgraded Enron's once top-rated bonds to junk status yesterday, meaning that US$3.9-billion of debt became due immediately and as much as US$16-billion in other debt due next year may have to be paid sooner.

Investors panicked and, in a record day on the New York Stock Exchange, dumped 339 million shares for whatever they could get. Enron's shares closed down 85% to US61¢ Wednesday and fell another 31% yesterday to close at US36¢.

Chuck Watson, Dynegy's chairman and CEO, said yesterday the disclosures of further deterioration of Enron's operators led him to pull out of the deal.

Enron worked frantically to try to control the damage, saying it was evaluating whether previously declared dividends will be paid on the corporation's common and preferred stock. It also brought in the accounting firm Pricewaterhousecoopers in London to take over its European operations.

Analysts held out little hope for Enron, which had assets a year ago of US$80-billion and revenues of US$979-million.

"I'm not sure they have any other alternatives [to bankruptcy], unless banks are willing to siphon more money into a black hole," said Carole Coale, a Prudential Securities analyst. "Investors will not buy it."

The collapse is also a major embarrassment for George W. Bush, the U.S. President, who is a close friend of Kenneth Lay, Enron's chairman. Mr. Lay was on the short list for treasury secretary, a post held by Paul O'Neill.

pmorton@nationalpost.com

17:32 Uhr:  Blitzmeinung von Christina Anastassiou  


  Deutsche Banken stecken doch im Enron-Sumpf  

   
Am Donnerstag wuschen sie sich noch die Hände in Unschuld, am Freitag sieht die Lage anders aus. Nicht nur die Deutsche Bank leidet unter der Krise des US-Energiehändlers Enron. Auch die HypoVereinsbank sieht beim möglichen Konkurs rund 100 Millionen Dollar an Krediten in Gefahr. Die Dresdner Bank ist ebenfalls mit rund 100 Millionen Mark engagiert, die Commerzbank sprach von einem niedrigen Millionen-Betrag. Die Institute sollten einen Enron-Konkurs verkraften können, wenn gleich dieser das Risiko von Bankaktien in der Konjunkturflaute zeigt.  
 



© 2001 sharper.de

Und vielleicht ist gerade dies das Schlimme! Aber Enron geht pleite, soviel ist sicher. Es fragt sich nur, wer sonst noch!

Enron wird als "quirliger, innovativer, sehr aggressiver" Marktteilnehmer beschrieben. Der Enron-Anteil am deutschen Stromhandel (OTC und börslich) wird auf stolze 30 % geschätzt. Enron hat Pionierleistungen auf dem seit Frühjahr 1998 liberalisierten Strommarkt erbracht. Die Kraftwerkskapazität liegt über dem Stromverbrauch. Der Anteil des Handels dürfte bei unter 10 % des Gesamtmarktes liegen, doch gibt es darüber keine genauen Angaben, da Daten zum OTC-Volumen fehlen. Dies dominiert weiter gegenüber dem börslichen Geschäft.

Der Energiehandelsmarkt ist bisher sehr wachstumsstark. Noch deutlicher in Schwung kommen soll er, wenn die Liberalisierung in der EU überall an Fahrt gewinnt. So ist etwa Frankreich kaum dereguliert. Dort sitzt mit EdF Europas Nummer eins, zu der in Deutschland EnBW zählt, und die sich noch unter dem Schutz des Monopols europaweit mit Akquisitionen ausdehnt.

Als Gewinner der aktuellen Situation gelten das Trading von Eon, RWE und EnBW. Diese Händler können mit den Kraftwerkskapazitäten ihrer Konzerne im Hintergrund je nach aktuellem Preis im Vergleich zu den Grenzkosten ihren Bedarf aus eigenen Anlagen oder am Markt decken. Schon wird hierzulande genüsslich auf die Bilanzmanipulationen des US-Konzerns hingewiesen und im Gegensatz zu Enron die vorhandene "vertikale Wertschöpfungskette" der Ex-Monopolisten hervorgehoben. REW und Eon führen längst auch im Stromhandel.

Per definitonem muss ein reiner Händler offene Positionen eingehen und kann nicht, wie Produzenten, Energiederivate durch physische Gegenpositionen decken. Das Geschäftsmodell des Händlers, der zu Ultimo seine Positionen glatt stellen muss, besteht nun einmal darin, Energie auf dem Markt zu kaufen und zu veräußern. Die Versorger sind dagegen über ihre Kraftwerke und Kunden abgesichert.

Börsen-Zeitung, 1.12.2001

Der Deal platzte, kurze Zeit nachdem drei Kredit-Rating-Agenturen angekündigt hatten, ihre Bewertungen für Enrons Verbindlichkeiten auf "junk"-Status zu senken. Das Unternehmen wird durch die Herunterstufung der Kreditbewertung gezwungen, vier der 13 Milliarden Dollar Schulden unmittelbar zu begleichen. "Keine Frage, das ist das Ende von Enron", prognostiziert Gordon Howald, Analyst von Credit Lyonnais Securities in New York.

Die fehlgeschlagene Fusion löste eine Kettenreaktion aus: An der New Yorker Börse brach der Enron-Aktienkurs dramatisch ein - am Mittwoch um 85 Prozent, am Donnerstag um weitere 41 Prozent. Am Freitag pendelte die Aktie um die 30 Cent; im August 2000 wurde die Aktie noch mit 90 Dollar gehandelt. Investoren warfen allein am Mittwoch panikartig rund 340 Millionen Enron-Aktien auf den Markt - Rekord.

Noch vor wenigen Monaten war das Unternehmen, das weltweit 21.000 Mitarbeiter beschäftigt, im US-Magazin "Fortune" als siebtgrößte US-Firma gelistet worden - mit einem Marktwert von rund 93 Milliarden Dollar. "Enron war schon groß, doch letztlich nicht groß genug, um nicht zu scheitern", sagt Merrill-Lynch-Analyst Steven Fleishman. Heute wird das Unternehmen noch mit 200 Millionen Dollar bewertet.

Doch noch hat das texanische Unternehmen nicht Konkurs angemeldet, was wohl einzig verbliebene Option für den einstigen Giganten ist: Denn Enron braucht dringend Geld, Zeit und eine Restrukturierung.

Es läuft auf eines der größten und komplexesten Konkursverfahren der US-Geschichte hinaus, das Konsequenzen für hunderte anderer Firmen haben könnte - ebenso für das gesamte Energie-Handelsgeschäft weltweit. Allerdings, so sagen Experten der Branche, sei es noch zu früh, das genaue Ausmaß des Schadens für Finanzmärkte und den gesamten Energiemarkt abzusehen.

Im Strudel der Pleite befinden sich auch die Großbanken. Die Banken, bei denen Enron in der Kreide steht, sind auf der ganzen Welt verteilt: J. P. Morgan Chase aus den USA (500 Millionen Dollar), Credit Lyonnais aus Frankreich (250 Millionen Dollar), Canadian Imperial Bank (215 Millionen Dollar), ING aus Holland (195 Millionen Dollar), Abbey National aus Großbritannien (164 Millionen Dollar), Australia & New Zealand Banking (120 Millionen Dollar) und HypoVereinsbank (100 Millionen Dollar) als einer der deutschen Vertreter.

Enron hatte Schulden der vergangenen fünf Jahre nicht bilanziert - die zuvor verkündeten Gewinne ab 1997 mussten um 586 Millionen Dollar reduziert werden, das wirtschaftliche Fundament des Unternehmens war in kurzer Zeit wie ein Kartenhaus eingestürzt. Unorthodox arbeitete nicht nur die Buchhaltung. Dazu kamen undurchsichtige Geschäfts- und mangelnde Informationspolitik sowie Fehlinvestitionen, Insiderdeals.

Am Mittwoch wurden die Internet-Transaktionen des Unternehmens zunächst ganz eingestellt - derzeit werden über EnronOnline nur auf limitierter Basis Geschäfte abgewickelt. Bitter: 90 Prozent ihres Gewinns machten die Texaner bislang über ihr Internet-Geschäft.

Enron trat bisher nicht nur weltweit als Energie-Zwischenhändler für Gas und Strom auf: Dem aggressiv operierenden Unternehmen gehören Gas-Pipelines, dazu Kraftwerke in New Jersey, Mississippi, Tennessee und im Ausland, außerdem war Enron auch auf dem Kohle-Markt stark vertreten. Die Firma entstand 1985 infolge einer 2,4-Milliarden-Fusion zweier Gas-Companys. "Es handelte sich um eine verschlafene Pipeline-Firma, die sich durch den Einsatz von Technologie zu einem Handelsgiganten entwickelt hat", so Samuel E. Bodily, Wirtschaftsprofessor an der Universität Virginia. "Die Firma war wirklich innovativ und hat die Industrie verändert."

Kenneth L. Lay hatte Enron zu einem rasanten Aufstieg verholfen, auch dank exzellenter Verbindungen zu einflussreichen Politikern. Er spielt Golf mit Bill Clinton, versteht sich bestens mit US-Vizepräsident Dick Cheney und pflegt vor allem eine tiefe Freundschaft mit der Bush-Familie. Lay war in den 80er-Jahren einer der großen Geldbeschaffer für George Bush und diente als Wirtschaftsberater von George W., noch bevor dieser überhaupt an eine Präsidentschaftskandidatur dachte. Seit 1993 sponsorten Lay und Enron Bushs politische Karriere mit rund zwei Millionen Dollar, seine Beziehungen brachten Lay sogar für einen Posten im Finanzministerium ins Gespräch.

Doch in der Krise scheinen die Kontakte nicht viel zu nützen. Es gibt weder vom Weißen Haus noch vom Kongress irgendwelche Anzeichen, Enron bei den hausgemachten Problemen zu helfen. Bob McNair, ein Energie-Unternehmer aus Houston, sagte, Enron sei wie ein Bolide und der Energie-Markt eine unbarmherzige Rennstrecke: "Es ist viel schwieriger, die Spur zu halten, wenn man mit mehr als 300 Stundenkilometern unterwegs ist. Streift man ein Hindernis", so McNair, "fliegt man aus der Spur."

den o.g. Postings nur Banken erwaehnst?
Denke das die Banken sich ausreichend abgesichert hatten, denke mal
ueber den Tellerrand, es gibt auch Versicherungen.

Behauptet CBS, da eine grosse Menge Shortseller drinsitzen, die jetzt nach dem Konkursantrag glattstellen wollen. Vor allem soll es sich um Anleihenhändler handeln, welche die Enron-Bonds auf diese Weise abgesichert haben! Siehe unten:


Enron shares now sell for pennies and face de-listing from the New York Stock Exchange. That's fact, not theory.

On Monday, the shares rose more than 45 percent, to 37 cents or so. Pravin Banker at The Financial Network in Greenwich, Conn., says a buying frenzy may be in the works.

"There is a sneaking suspicion that dealers long the bonds might have sold short," Banker said Monday. The Financial Network is a specialist in distress situations and publisher of LDC Bond Watch, a daily market commentary.

The short-selling, if true, was "a frantic attempt" to hedge Enron bond positions, which suffered a free-fall in value last week. "If the NYSE does not de-list, the share price could rally from 29 cents to several dollars per share," he says. "The potential for a giant squeeze exists." Squeezes happen when short-sellers scramble to buy back the shares they borrowed in their short sales.

Banker estimates an Enron share-price decline to zero from $4 provides only $3.6 billion of "hedge" against a bond portfolio that fell in value by $4 billion between Wednesday morning and Friday afternoon. He also says the utility assets held in Enron's trust-issued bonds, such as Osprey Trust, might be permitted to shift around or be sold. This would make Enron's share price far undervalued - but only in a rush by institutions to cover their short-sales, he says.

Thom Calandra - Editor-in-Chief of CBS MarketWatch

Meinen letzten Kauf bei 1,xx habe ich nämlich ausgesessen.

R.

1000 Stück gekauft. Kann passieren, was will, Kurse von mehr als 1 Dollar gut möglich!

gekauft? Trotzdem bleibt Enron natürlich heisses Eisen. Hängt einzig und allein davon ab, wieviele Shortseller drinstecken! Wenn die eingedeckt sind, geht es wieder runter.

Genesis Energy, L.P. (GEL: news, chart, profile): $21 million. If Enron fails to meet its obligation, Genesis Energy could be required to suspend its distributions beginning with the fourth quarter.
XTO Energy Inc. (XTO: news, chart, profile): "minimal" exposure of $30 million, plus long-term derivative obligation that was booked as a liability at market value of $38 million. XTO has given Enron notice to terminate the obligation.
ONEOK Inc. (OKE: news, chart, profile): less than $40 million pre-tax, but if Enron performs its current obligations total exposure would drop to less than $2 million after Jan. 4, 2002.
Mitsubishi Tokyo Financial Group (MTF: news, chart, profile): pegged Bank of Tokyo-Mitsubishi's loan exposure at $248 million (30.57 billion yen). Mitsubishi Trust & Banking has outstanding credits to Enron of $38.9 million (4.8 billion yen).
Sumitomo Mitsui Banking Corp. (SMBJY: news, chart, profile): $210 million.
Principal Financial Group (PFG: news, chart, profile): $171 million, plus another $50 million from investments in Enron-related entities. The company expects to take a charge in the fourth quarter due its exposure.
KCS Energy (KCS: news, chart, profile): around $3.8 million from hedges in the fourth quarter and the year 2002 and oil and gas sold through Enron entities.
Nicor Inc. (GAS: news, chart, profile): under $5 million.
Westport Resources (WRC: news, chart, profile): less than $3.2 million in commodity sales contracts with Enron affiliates, taking into account the $800,000 it owes under an early contract termination provision.
Aegon (AEG: news, chart, profile): gross loan exposure of $300 million.
PPL Corp. (PPL: news, chart, profile): less than $10 million, plus a possible $6 million annually through 2006 under long-term contracts.
Allegheny Energy (AYE: news, chart, profile): less than $5 million.
American Electric Power (AEP: news, chart, profile): less than $50 million.
Abbey National (UK:ANL: news, chart, profile): $164 million (115 million British pounds). Second-half earnings will be hit by $136 million (95 million British pounds) for loan exposure.
ABM Amro (ABN: news, chart, profile): may have to take $98 million (110 million euro) provision in the fourth-quarter, according to Dow Jones.
ING Group (ING: news, chart, profile): $195 million, according to Reuters.
Credit Lyonnais (FR:012529: news, chart, profile): owed $250 million with half the amount guaranteed by assets, according to Dow Jones.
The Royal Bank of Scotland (UK:RBOS: news, chart, profile): likely below $100 million, according to HSBC.
Barclays (UK:BARC: news, chart, profile): likely below $100 million, according to HSBC.
Wiser Oil (WZR: news, chart, profile): has $6.1 million in 2001 and 2002 hedges with Enron.
Energen (EGN: news, chart, profile): sees 2002 earnings-per-share 20 cents to 25 cents lower than expected if Enron doesn't fulfill its contractual obligations.
FPL Group (FPL: news, chart, profile): "minimal" at $2 million.
National Fuel Gas (NFG: news, chart, profile): $10.4 million.
KeySpan (KSE: news, chart, profile): less than $4 million.
TC PipeLines (TCLPZ: news, chart, profile): "no material adverse impact" its financial conditions, but it holds a 30 percent general partner interest Northern Border Pipeline Co., a company that has relationships with Enron.
Range Resources (RRC: news, chart, profile): no material impact on its business, but can't estimate exposure its various counter parties may have with Enron.
NRG Energy (NRG: news, chart, profile): less than $10 million.
Plains Resources (PLX: news, chart, profile): if Enron fails to comply with contractual obligations, Plains sees total fall of $638,000 in 2001 and 2002 revenue.
Encore Acquisition (EAC: news, chart, profile): no material adverse affect on its financial condition, but future hedge settlements through 2003 due for payment from Enron total $4.1 million.
Reliant Resources (RRI: news, chart, profile): about $80 million.
Williams Cos. (WMB: news, chart, profile): less than $100 million.
Duke Energy (DUK: news, chart, profile): about $100 million in unsecured exposure. Company still sees 10 percent to 15 percent in compound annual earnings-per-share growth from a base of $2.10 in 2000 and will likely exceed 15 percent earnings growth for 2001.
Dominion (D: news, chart, profile): $11 million, plus forward commodity sales contracts representing exposure of less than 5 percent of earnings.
Exelon (EXC: news, chart, profile): net exposure less than $10 million, but direct gross exposure for current energy sales is less than $20 million.
Sempra Energy (SRE: news, chart, profile): less than $15 million.
El Paso Corp. (EPG: news, chart, profile): $50 million.
Mirant (MIR: news, chart, profile): $50 million to $60 million.
Denbury Resources (DNR: news, chart, profile): about $26 million under hedge contracts.
Myra P. Saefong is a reporter for CBS.MarketWatch.com in San Francisco.

For year after year, it was voted the most innovative company in America. Its peers also put it top of the list for the quality of its management. Business gurus, investment analysts and the media described it as one of the great companies of the 21st century. It had a heavyweight board of directors, which appeared to tick off all the boxes for good practice in corporate governance. Its auditors and financial advisers seemed beyond reproach.

This week the full scale of the wreckage became apparent. Congress is digging deep into its affairs and big questions are being asked about the integrity of its accounting systems. The lawsuits have started.

The collapse of Enron is in many ways more shocking than other big corporate failures of recent times. Drexel Burnham Lambert, the Wall Street firm that went down in the late 1980s, revolutionised the capital markets in the same way that Enron rewrote the rules for energy trading. But it was regarded with suspicion by its peers and they rejoiced at its failure. Long-Term Capital Management had a big impact on the financial markets when it collapsed in 1998 but did not affect many people's lives.

Enron is different. Its failure is devastating for large numbers of investors, employees and pensioners. And the question is this. If a company held in such high esteem can go under, who is safe? Did the failure come out of a clear blue sky, or were there warning signals? With the benefit of 20:20 hindsight, half a dozen lessons can already be pulled out of the wreckage.


Cash is what matters. Enron reported dazzling profits growth in recent years but its ability to generate cash was much less clear. The cashflow statement in last year's accounts called for a wet towel and more hard work than seemed worthwhile.

It appears to show an increase in cash, and what it calls "cash equivalents", for the year. But that is only after a sharp fall in the amount of money tied up in working capital, which looks surprising in a year when revenues jumped by $60bn to $101bn (£42bn to £70bn).

One possible explanation is that the cash figures benefited temporarily from a sharp increase in energy prices towards the end of the year - money that has drained away as the price has declined in 2001. The one thing we know for sure is that interest payments on Enron's debt were moving sharply higher at a time when it appeared to be generating surplus cash.


The longer and more boring the balance sheet footnotes, the more they are worth reading. Enron is a classic of its type. Within the acres of turgid prose is buried a clutch of bombshells, which have now exploded. For example, the notes to last year's accounts showed that the company would be in big trouble if the investment rating agencies ever decided that its long-term debt did not warrant investment grade status. That turned out to be on the button. The rating agencies at last got round to doing their job at the end of November and the game was over within a few days.

The notes also gave bare details of a web of vague but substantial relationships with various unconsolidated equity affiliates and a bunch of limited partnerships that had been formed with third-party investors "for various purposes". A number of these, the company has subsequently disclosed, should have been fully consolidated and they have required big write-offs.


Watch out for potential conflicts of interest. There are at least two lulus in the Enron story. Last year's accounts disclosed that the company had done business with an unidentified third party whose "general partner's managing member is a senior officer of Enron". Not to worry: we were told it had all been done on an arm's-length basis. Enron now believes that Andrew Fastow, its former chief financial officer, earned more than $30m from these activities.

Then there is the role of the auditors, Andersen. Last March it was disclosed that Andersen's fees for doing the books came to $25m. Its fees for consultancy and other work for the company came to a further $27m. These numbers make the firm's sanctimonious comments since the collapse especially irritating. "We can't long maintain trust in our capital markets with a financial reporting system that delivers volumes of complex information about what happened in the past but leaves some investors with limited understanding of what's happening at the present and what is likely to occur in the future," it observed, as though the problem lay elsewhere.

The question that must be asked is whether Andersen's enormous consultancy fees affected the rigour of its audit.


Remember Warren Buffett's golden rule. If you don't understand what the company does, don't buy its shares. Even the company's website is a little tentative. "It's difficult to define Enron in a sentence but the closest we come is this: we make commodity markets so that we can deliver physical commodities to our customers at a predictable price." It is all rather complicated stuff, though. For example, if you are interested in how Enron estimates value at risk for commodity, interest rate and foreign exchange exposures, you are assured that it uses a model based on Monte Carlo simulation of delta/gamma positions. So that's all right.


Be wary of new paradigms in old industries. Only a very few years ago, Enron was a dull utility, a gas distribution company. Then it got religion and saw its mission as being to make markets and deliver commodities to all kinds of customers. Metals, forest products, bandwidth capacity, steel, weather risk: everything seemed possible.

What no one, including the company, seems to have understood was the scale of the risk that it was taking on in these areas. And for what? Last year's return on capital employed was less than 10 per cent - and it now seems that figure was overstated. They would have been better off putting the money into US Treasuries.

Part of the problem seems to have been that where Enron led, others followed, putting a sharp squeeze on profit margins and forcing the company to look for new growth markets outside its core business. One example: its hugely ambitious plans for broadband services. Enron invested $1.1bn in this business over two years and made no money.

Gurus, analysts and the media must take some blame for what happened. The fact is that doing business in new ways is both interesting and exciting to outsiders. No one ever wrote a bestseller about gas pipelines.

It is extremely unfair to pick out just one example of excessive enthusiasm for the company - but what the heck. On October 23, Lehman, the investment bank, rated the shares a strong buy with a price target of $38. On December 7, it announced it would no longer cover the company. "Bankruptcy filing has complicated outlook for stock," it explained curtly.

* Keep doing reality checks. At the beginning of this year, Enron was selling at a multiple of more than 60 times the earnings it was to report for the year 2000. Other groups that relied heavily on trading activities, such as investment banks, sold at under a third of that multiple at the time. Again, with hindsight, the numbers simply look crazy.

Was Enron's failure the result of hubris, incompetence, or worse? Did it stem from faulty execution of a basically sound business plan, or was the whole model flawed?

One answer is that the company appears to have built its own doomsday machine. It created a financing structure that was critically dependent on an investment grade rating for its debt and then propped up that rating through off-balance sheet entities that were critically dependent on the share price.

While things worked well, the results were impressive. But as a highly leveraged market-maker in all kinds of commodities, Enron could survive only on the goodwill and trust of its financiers, customers and shareholders. When it turned out that those qualities had been betrayed, the company was lost.