Movie X School Public Account
This film looks really rushed, I think there are still too many branches. It's actually not complicated to organize, but the topic is very good, a room of smart people. Indeed, Enron concentrated on smart people. What do smart people do? Obviously, it is the "Easily Make Big Money" that American culture emphasizes.
If you want to know how smart people can make big money easily, just watch this documentary.
First of all, we all know when to wait. But we have neglected that we can create opportunities. In layman's terms, we just create conditions if there are no conditions. Enron, in order to create a good condition, so invests in politics. Judging from the facts revealed in the film, the "origin" of Enron is, to put it bluntly, a naked political and business collusion.
Ken Ray, the founder of Enron, is the son of a Baptist pastor. He comes from a poor family. He has worked several jobs since he was a child. He obviously wants to get ahead. He also works hard to get ahead. He has a strong ambition to get rich. Lei has a PhD in economics and he is a proponent of government deregulation. He foresaw this trend: He believes that the energy market will be deregulated, especially the natural gas industry that the government firmly controls. In Washington, he actively lobbied to loosen the policy. In Washington, he became a member of the liberalization movement, advocating that the government relax restrictions on businessmen: the government is not the answer to the problem, the problem is that the government itself can achieve outstanding development and economic growth in the short term. Society will not be tied tightly by the system, nor will it be the largest in scale or possess the most natural resources. What they all have in common is the belief that market mechanisms create miracles. The supernatural power of the government to loosen control helped Lei establish Enron in the year. After a wide range of natural gas acquisitions, Lei believed that Enron could take advantage of it because the government decided to allow natural gas prices to fluctuate. Lei and Bush Sr. are relatively familiar. During George W. Bush's tenure as governor of Texas, he was also very happy to help Lei go around saying that this kind of political and business organization is unprecedented in history and is the first close family and business alliance in the history of the United States. Bush Sr. helped Enron to obtain billions of dollars in government subsidies, and he also assisted Ray to become an unrestricted ambassador for deregulation.
Based on the above content, we can see a clear problem. American culture emphasizes "freedom" and believes in "market" economically. However, before it was obvious that strategic resources like natural gas, important resources were still firmly controlled by the state. From another perspective, this is also an "unexploited" treasure. Therefore, it is obvious that Ken Lane used the help of Bush and his sons to promote the liberalization of the natural gas industry (to put it plainly, "privatization"), and then he put state-owned resources into his own pockets to operate. This is a very profitable business.
Secondly, Enron absorbs smart people and relies on them to create miracles of making money.
Monopolize natural gas, and then use natural gas to make money. It was originally the company of our dreams. But they are not satisfied, but continue to create miracles. Of course, what we are looking at now is only those who are good at "capital operation" and full of "innovative spirit", they have absorbed the management methods of other fields into their own industries. Moreover, with political support, they can also ensure that their creativity will not be interfered with.
Ken Ray saw the potential of Jeff Stringing and was able to grasp the future trends of the natural gas industry. Ken Ray always thinks he has a vision. He likes people who he thinks has vision. He likes people with amazing ideas. Shi Jinlin is the king of ideas. Shi Jinlin’s most beautiful idea is to find a new way to transport energy. Instead of being tied up by physical transportation pipelines, Enron can develop into a natural gas trading market. This is a brilliant idea that turns energy into a financial tool, just like stocks and stocks that can be traded. Bond, that is our best idea. With that idea since 1992, we have become the largest buyer and seller of natural gas in North America... Shi Jinlin proposed a condition for joining Enron, allowing him to adopt the same-day market price accounting principle. Andersen endorsed this, and the SEC also approved... The same-day market price accounting principle allows Enron to settle future profits on the day of signing the contract. Regardless of the actual income on the day, Enron’s profits are in the hands of the outside market, which is very subjective and easy to manipulate. They said they wanted to sell the power of this power plant, which was sold at X yuan per watt ten years later. No company could do it.
Obviously, relying on Shi Jinlin's electronics, relying on absurd accounting principles. A solid "natural gas supplier" has evolved into a "natural gas trading platform", which can not only make money on spot, but now it can also make money on futures. Moreover, I am the biggest buyer and seller. I enter with my left hand and export with my right hand. It is a market completely controlled by myself.
Thirdly, they use a culture of risk-taking, motivate employees with "profits" and motivate them to make money by unscrupulous means.
Shi Jinlin thoroughly implements "natural selection" in Enron. He established the PRC system, which is the "Performance Review Committee". All employees are rated from one to five, and about 10% of them will be dismissed. Enron will not only be "low-level elimination", but also high rewards. As the comment said, a 25-year-old employee was evaluated as having excellent performance and received a million-dollar bonus. This is the case American companies are rare. However, the result of this is naturally extreme, so Enron people claim to themselves: Our corporate culture is very fierce, a very hard culture, no one in Enron is more daring than a trader. Obviously, they transformed Shi Jinlin and Lei's view of the free market into an ideology and they regarded it as a new economic religion.
If only the powerful "survival of the fittest" is emphasizing free competition in the United States, it would be nothing. The problem is that Enron is not only "surviving the fittest", but also emphasizes taking risks. He describes himself as a person who closely monitors risks. In fact, he is a gambler. For Shi Jinlin, risk equals glory. He seriously talked about cross-country trips, the one that is most likely to be "deadly." This statement can be proved from several trips led by Shi Jinlin himself.
Under such a corporate culture, the outbreak of "illegal operations" is nothing special. However, Ken Ray has repeatedly adopted the method of indulgence, of course, illegal operations, which is not a good thing. Just like Cao Cao's ability to employ people, he reused a large number of wolves and ambitions, leaving himself to his descendants and taking away himself. For example, the "Weihara scandal" mentioned in the film. As we all know, there are winners and losers in oil trading. But the two traders actually only win but not lose. This is not only suspected by outsiders, but also by insiders. As a result, the investigation found that the two traders both falsified profits and destroyed daily transaction records. They may also have gambling transactions beyond their authority. It is estimated to be similar to the strategy adopted in "Devil Trader", but after the incident broke out, Lei not only did not deal with it at all, but even sent electricity to the trader involved "please continue to let us make money". Not only did Lei fail to reduce Enron's investment risk, he also encouraged his traders to get bigger. But then my luck ran out. Two months later, I received a panicked call saying that they had lost tens of millions in five days. The two traders lost all bets on Enron's oil reserves. The quick decision made Mook Roy hide from the market, and Enron escaped.
Regardless of internal problems, it seems that Amway is still making profits from the outside. Especially the company's senior management, because of the increase in Enron's profit forecast, the stock price rises in response, and they can cash out their allotment shares. In reality, the previous benefits have been exhausted, and new growth has not appeared. In order to obtain high profits, they still insist on making the stock quarterly profitable despite the company's various losses. They continue to grow under the banner of stable growth, with an estimated annual growth rate of 10% to 15%. In fact, in order to reach those numbers, Enron has adopted various controversial practices and risked great business risks. From the book point of view, Enron skyrocketed, but in fact, profits did not increase, but declined in the opposite direction. Enron built a power plant in India, but because India could not afford Enron's electricity, the power plant was abandoned. But even if the investment loses 1 billion dollars, the senior executives still have millions of dividends. Based on the hypothetical profit, the profit has never been realized.
So they continue to work hard to create ideas and look for new growth. In the eyes of Anran people, it depends on cleverness and ideas. But what we can see is deception and blackmail. The first is to rely on capital status to expand business areas. Enron continues to carry out corporate mergers and acquisitions, the largest of which is the purchase of Portland Power. The acquisition of the company enables Enron to enter the power generation industry. Portland Electric's profitability and cash flow are both good. This is their example of "trust me" to Wall Street. Seeing the soaring of Internet stocks, Shi Jinlin decided to launch Enron. We are evaluating the establishment of an online trading market. Enron uses its knowledge of natural gas trading to invest in other energy transactions, including the bandwidth of information transmission. Enron created a futures market with trading bandwidth. Enron conquered Wall Street last week, boldly entered the broadband market, and partnered with Blockbuster on-demand movie services. Enron's stock price rose by 34% in two days. Enron's creativity continued until Enron announced that its latest plan was to turn climate into a right of choice. The public began to wonder whether this was science or science fiction. Will weather forecasters be punished?
Opportunity is always opportunism. In fact, Enron has not yet settled on-demand video technology. As a result, the technical problem has not been resolved, and the cooperation with Blockbuster has also ended. However, using the same-day market price accounting principle, Enron has estimated that it will make millions in future profits. In fact, I didn't make a penny. At the end of 2000, Enron was unable to improve the broadband business. They tried all kinds of ways to make it out of nothing. The company was in chaos and high-level executives began to sell the company's stock.
Finally, in the event of serious losses, they tried their best to forge profits.
In order to ensure stock prices and ensure profits, Enron has exhausted all means to forge profits in the event of serious losses. Of course, smart people can see it naturally. Bessine McLean, a reporter for Fortune Magazine, first questioned Enron’s financial situation. She asked a simple but unanswerable question: “Where did Enron make that money?” pointed out in her beautiful article “ Looking at the cash flow of each quarter and year-end," she doesn't think there is a good reason for investing in Enron, because Enron's financial report is unreasonable.
So what is An Ran doing this trick? Andy Fastau is the chief financial officer of Enron. His job is to cover up the financial situation of Enron and turn it into a fantasy figure. Basically, Enron has been in deficit for years, but the financial report shows that it is profitable... In order to please him (Shi Jinlin), he must try to keep the stock price rising and conceal the fact that Anron is in debt of 30 billion. Those who were under the pressure of rising stock prices began to cheat, and continued to cheat in the second quarter, allowing new frauds to cover up old ones. After a while, things were too big to let go. Fastau created a large number of short companies, created magical performance, made debt disappear, and made stock prices rise.
In addition to this, Fastao has something even better. LJM is Fastao’s masterpiece, it works miracles for Enron. Shi Jinlin, Lei and Enron's board of directors approved the LJM fund established by Fasto...LJM funds only buy and sell the assets of Enron Enterprise. Enron owns those assets, they just changed hands. As the chief financial officer, Fastau knows very well that he can guarantee LJM profit. How to do it? For example, a case mentioned in the film: Merrill Lynch suddenly decided to purchase three Enron oil tankers parked in Nigeria. The Nigerian energy cargo ship has nothing to do with Merrill Lynch’s business. It was a blatantly illegal transaction. It was just that the three ships were eliminated on Enron’s account, and they were parked in Merrill’s warehouse for five months before being bought by Enron. There is no problem with such a ridiculous thing, because Enron and the banks participating in the fund can profit from it. Although we know that Fastau is both the chief financial officer of Enron and the trader of these funds, there is obviously a problem of avoiding interests. However, not only was no one questioned, but 96 banks invested in LJM funds separately. The major U.S. banks each invested tens of millions, including almost all Wall Street banks, such as Chase, Jiasheng, Credit Suisse First Boston, Citi, Merrill Lynch, and Deutsche Bank, all of which are the world's top investment banks. The amazing ability of An Ran and Andy Fastau has coaxed Wall Street into perseverance, using Wall Street's greed to let them spit out their money.
However, Enron's extreme fraud and ridiculous management have not been discovered, in fact, there are naturally. But Andy Fastauenwei also tidied up the analysts in a subdued manner. As stated in the film, Wall Street analysts lopsidedly assessed Enron's stock as a strong buy. Why do analysts turn a blind eye to fraud? In the words of those analysts, "We rely on the information that was available at the time. I trust the credit of Enron's financial report and the ability of the management team." It is obvious that the analysts did not analyze what they said about Enron and accepted it all. Any analyst who does not accept Enron's statement is immediately regarded as the company's enemy. Enron Treasurer Andy Fastau stared at John Olsen, one of the few analysts who questioned Enron, and Merrill Lynch fired Olsen. When Fastau issued two investment commissions worth tens of millions of dollars, analysts usually have very high dividends. When dealing with investment commissions, after the above matters are settled, no bad news will be heard again. When Enron's share price Continue to soar. Its operations have lost more and more.
In the same operation, Enron also uses the same method of LJM fund. Using the monopoly on California power, they have repeatedly created tensions of "blackouts" when the power supply is sufficient. Then he played the game of market manipulation. As an Enron trader said: Someone told me that a good trader is a trader with "creative", and creative traders find opportunities for spreads. One of the methods of arbitrage is called "bounce". When the electricity was in short supply, Enron traders sold electricity to other states, and when the price rose, they bought the electricity back, so I desperately sold the electricity out. Considering that traders do this, naturally there is a greater way of manipulation. When two or three power plants shut down 30% to 40% of the power supply and use maintenance as a reason in the same day, the electricity price also soars by three to four times. A week later in Northern California Some people follow the same pattern.
Summarizing the above process, it is obvious that Enron relied on collusion between the political and businessmen and the embarrassment of big capital to control the rules and evade surveillance. Then rely on "creative" to create larger and larger bubbles. And Enron’s tricks are consistent from top to bottom, from the beginning to the end: monopoly, black-box operation, self-buying and self-selling. Because they not only manipulate a large enterprise and have huge resources, but also use external stocks to win bigger bets.
Of course, the bubble is about to burst. The result of Enron's bankruptcy: 20,000 people lost their jobs and medical insurance, the average severance payment was 4,500 yuan, and the total bonus of senior executives was 55 million yuan; in 2001, employees lost 1.2 billion yuan. Retirement funds, retirees lost 2 billion pension funds, and Enron's senior executives sold 116 million shares. Obviously, what we are seeing is the "results" of the difference between executives and employees. In terms of punishment, the three main figures of Enron, Andy Fastau pleaded guilty to remittance fraud and agreed to the court to confiscate 23 million assets. He charged other Enron executives in exchange for reducing his sentence to 10. year. Shi Jinlin was prosecuted in 2004 on charges of insider trading and fraud against investors. Enron's accounting firm Andersen was convicted of obstructing justice and its honest reputation was destroyed. The oldest accounting firm in the United States collapsed with Enron, and 29,000 employees lost their jobs. Enron’s shareholders sued Enron and its bank, claiming a claim of up to 20 billion U.S. dollars, and Ken Lei was also sued for fraud with intent. However, more participants were not disciplined. Because that is a much higher level. As stated in the film, in addition to annoying Enron’s misdeeds, more and more evidence shows that American financial institutions not only participate in Enron’s fraud, but also plan to promote it on their own to make money. The Enron fraud is a collective corruption. There should have been an audit check and balance mechanism. Lawyers should stand up to stop it, accountants should stand up to stop it, and bank investors should stand up to stop it, but none of those who should have expressed their views. Everyone benefits from fraud and puts money in their pockets. .
The movie also reminded me of what Mr. Patton from the Ministry of Justice said in "Antitrust Operations": Government engineers are not as smart as corporate engineers, so they can’t get the handle of the other party (we are in a big deal with NURV). I mean our engineers are not as smart as theirs). What's more, Barton in the film was actually bought by NURV early in the morning. When capital and the government collude, and the top "smart people" are gathered, not to mention what the lower-level people can do, just think of the middle-level people as there is nothing they can do. 16.9.14
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