Wednesday, February 20, 2002

State of the Enron "It is ... as if a window had opened and revealed the way it all really works. What we see is a world in which insiders get to play by one set of rules — entree to Enron side partnerships that could turn minimal investments into millions overnight — while the unconnected and uninitiated pick up the bill. And it isn't necessarily illegal." "Terry McAuliffe, the Democrats' chairman, has called Enron 'simply outrageous' and declared that his 'heart goes out to the employees and shareholders who were victimized by a web of greed and deceit.' Now we learn that he parlayed a ground-floor $100,000 investment in the Bermuda-based, Beverly Hills-situated telecom company Global Crossing into $18 million and cashed out well before Global Crossing went belly-up this week, after having never turned a single yearly profit. We are to believe it is Mr. McAuliffe's business acumen that landed him on that ground floor in the first place, not the buddy network he cultivated as chief fund-raiser to his president, Bill Clinton. 'If you don't like capitalism,' said Mr. McAuliffe in defense of his windfall, 'move to Cuba or China.' ... [shareholder:] 'I don't know how the management of this company did so well while small shareholders did so poorly.' Gary Winnick, Global Crossing's chairman and a Clinton- McAuliffe golf partner, walked away with $730 million." " ... Thomas White, the Bush administration's secretary of the Army, could legally exit with more than $10 million of proceeds from an Enron division that, according to his colleagues, overstated its profits by hundreds of millions on Mr. White's watch (he was vice chairman) and has since tossed overboard most of its employees." ... [more] 5:00:22 PM    comment  []

Bond Market Goes Cold in Japan " ... government bond market, the world's largest, has gone dead cold. ... " "But investors are also shunning bonds, pushing prices down ... the government will be forced to offer higher coupon rates to attract buyers ... a looming deadline for the country's banks as the fiscal year ends on March 31. To offset an estimated ... ($36 billion) in losses on their stock portfolios ... the banks are selling ...  long-term bonds." "But the real issue is not liquidity, it is risk." "The shift into cash and other liquid assets ... " "Mr. Koizumi faces a puzzle: How to strengthen the economy and stock prices without hurting the bond market and foreign investors, who are crucial players here. ... a weak yen may also fuel inflation that would eat into bond prices and scare off foreign investors." ... [more] 4:01:42 PM    comment  []

Bankruptcy filings hit record high in 2001 "Bankruptcy filings by U.S. consumers and businesses surged 19 percent in 2001, hitting a record high of 1,492,129 in a year in which the economy fell into recession, according to data released Tuesday." "The filings last year compared with 1,253,444 new bankruptcies filed in 2000 and the previous record of 1,442,549 cases filed in 1998, data compiled by the Administrative Office of the U.S. Courts show. 'The combination of record levels of consumer debt and an economic downturn beginning in 2000 caused more families to face financial stress than ever before' ... " ... [more] 8:32:49 AM    comment  []