Re: Enron

[Nomiprins]

In a message dated 12/12/2002 1:41:33 AM Eastern Standard Time, [EMAIL PROTECTED] writes:

For instance, at a time when Wall Street executives say a $100 million
daily trading profit was considered sizable for a major trading
operation, Enron recorded a $485 million profit on Dec. 4, 2000. For the
full month - a period when, California regulators, say the company was
trading with its own affiliates in an effort to raise energy prices -
the records show that Enron's net trading profit was $440 million.

Don't know which Wall Street executives they were speaking with, $100mln was not sizable, but average for a major trading operation. The biggest Wall Street energy traders, Goldman Sachs, Morgan Stanley, and Bank of America would consider that sort of a rounding error. The fact is, though Enron clearly manipulated the CA market, and the Oregon, Nevada and Washington markets for trading gains - you can't trade without trading partners, even if you hold all the information, as Enron did though Enron Online, the biggest energy online system. Goldman Sach's ICE system replaced Enron Online as the biggest online trading system when Enron went under. The biggest corporate energy traders in terms of volume are El Paso, American Electric Power and Duke, the biggest in finance are Goldman, Morgan Stanley and B of A. All benefited from CA. The media continues to ignore this ! point.

BTW, Bank of America is lobbying the FERC to allow them to trade energy assets, not just financial instruments - sign of further deregulation of the energy / banking collaborators, in case CA wasn't a big enough mess.

"They specifically told us they were not speculating," said an analyst
at one of the nation's biggest brokerage houses, who insisted on
anonymity. "At the time, Enron was valued at close to 40 times earnings.
And Enron naysayers were saying, `How is this different from Goldman
Sachs, which on a good day is valued at 12 times earnings?' "

The Goldman Sachs Commodities trading operation had equivalent to Enron leverage multiples, even if the overall firm didn't. Of course, neither the FERC nor the SEC requires disclosure of individual commodities revenues, so that information isn't public.

In a March 27, 2001, interview, Mr. Lay said: "We're basically making
markets, buying and selling, arranging supplies, deliveries. We do not,
in fact, speculate on where markets are headed." The company also
denied, in meetings with Wall Street analysts, that California accounted
for a large share of its profit in 2000, at the height of the state's
energy crisis.

Yet, Enron was named Energy Derivatives trading House of the year in 2001 by the Energy Power Risk Management Awards - the most prestigious financial / energy awards in the energy trading business. Goldman Sachs took over that position in 2002. Additionally, Enron was Natural Gas trader of the year in 2001, a position El Paso took over in 2002. El Paso though denying any CA market manipulation, had the largest trading positions outside Enron during 2001 and a 30% growth in earnings that year. Duke won the electricity award for 2001, the year Enron also won the Natural Gas trading award.

http://www.eprm.com/awards01/derivatives.htm

Nomi