Enron

5341 words, 22 pages

Intro Sample...


Abstract "Son, your ego is writing checks your body can't cash." (Paramount, 1986) The famous words of Admiral T.J. Cassidy in the high-flying action thriller Top Gun (Paramount, 1986) describe what occurred with Enron. Enron was a giant corporation (some say the largest energy company in the world), who depended on outside credit sources to finance its daily operations. In turn its credit-worthiness depended on its performance as reflected in the Enron's share prices. When the price of Enron's shares collapsed, so did its' credit rating. Consequently cash credit to the company became either prohibitively expensive or outright unavailable. Without ready infusions of cash, Enron became unable to meet its earlier credit obligations. This... View More »

Body Sample...


Enron was not a banal investment scheme, it was a strategic company, tightly linked to the US government and to the US energy policy (or lack thereof); a company that was extremely active in the domestic politics of the United States, in the political finance of the country's two major parties, a company that was an unhesitant player in foreign markets and a bold participant in the international energy politics. Enron was a corporate equivalent of superpower. One of the reasons why people invested in Enron was that the company was considered too big to fail (the blue chip kind of stock, the deceptive safe haven) and was engaged in supposedly safe business of buying and selling energy. Everybody needs electricity and heat nowadays, certainly not everybody needs hand-held computers. The majority of the investors, as well as the public, thought that Enron was a rock-solid business, a kin to the famed Swiss banks or the dividend paying US government; few realized that Enron was a casino, and that an investment in Enron - while could be financially rewarding at a certain point- was a chancy affair. Enron's collapse also raised painful questions about supposed benefits of the deregulation of the public utilities sector as well as of the role of the free market in the operation of deregulated public utilities and energy suppliers. The obvious problem with the idea of letting free market forces control the fate of the utilities and public energy suppliers (in addition to the fact that the functioning of the entire society depends on these companies' daily operation, and that ...

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