Daily Archives: February 20, 2008

Maintaining Enron myths

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natwest%20three%20022008.jpgEver wonder how the mainstream media maintains Enron-related myths?
In reporting on the sentencing hearing later this week in the Enron-related case of the three former UK bankers dubbed “the NatWest Three” (prior posts here), the Chronicle’s Kristen Hays observes the following:

In their plea deals, the trio admitted they committed wire fraud in a scheme with Fastow and his top lieutenant, Michael Kopper, to cheat their former London employer, Greenwich NatWest. The bank, which is now part of the Royal Bank of Scotland, had a stake in a Fastow-created partnership and the three men advised their employer to sell that interest for $1 million when they knew its value had grown.
Fastow arranged for Enron to pay more than $19 million for Greenwich NatWest’s stake and divided most of the cash among himself, Kopper, the British bankers and others.

Actually, as noted in this earlier analysis of the NatWest Three plea deal, the following is what the former bankers actually pled to:

So, after years of litigation, the NatWest Three pled guilty to a single count of wire fraud. The basis of the guilty plea is that the three bankers failed to disclose to NatWest the [$250,000] option that they had taken from Fastow to purchase a portion of NatWest’s interest in Swap Sub at the time that NatWest sold that interest to Southampton [for $1 million]. Importantly, the basis of the plea deal is not that the NatWest Three knew and didn’t tell NatWest that the value of the bank’s Swap Sub interest was going to skyrocket soon after Southampton bought it as a result of Fastow completing the unwind transaction with Enron.

Read about the real NatWest Three deal.

Born Standing Up

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born_standing_up.jpgDon’t miss this Smithsonian.com excerpt from comedian Steve Martin’s new autobiographical book, Born Standing Up: A Comic’s Life (Scribner 2007). Take, for example, Martin’s hilarious description of the implementation of his novel theory of comedy in one of his initial shows:

A skillful comedian could coax a laugh with tiny indicators such as a vocal tic (Bob Hope’s “But I wanna tell ya”) or even a slight body shift. Jack E. Leonard used to punctuate jokes by slapping his stomach with his hand. One night, watching him on “The Tonight Show,” I noticed that several of his punch lines had been unintelligible, and the audience had actually laughed at nothing but the cue of his hand slap.
These notions stayed with me until they formed an idea that revolutionized my comic direction: What if there were no punch lines? What if there were no indicators? What if I created tension and never released it? What if I headed for a climax, but all I delivered was an anticlimax? What would the audience do with all that tension? Theoretically, it would have to come out sometime. But if I kept denying them the formality of a punch line, the audience would eventually pick their own place to laugh, essentially out of desperation. This type of laugh seemed stronger to me, as they would be laughing at something they chose, rather than being told exactly when to laugh.

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The faux-analyst

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earnings%20call.jpgOne of the funniest things I read from this past weekend was this W$J article about the earnings conferences calls being crashed by a faux-analyst named Joe Herrick:

At least seven times just the past three weeks, a mystery caller has cleverly insinuated himself into the normally well-manicured ritual of the quarterly calls. As top executives of publicly traded companies respond to securities analysts’ questions about their balance sheets, he impersonates a well-known analyst to get called upon. Then, usually declaring himself to be “Joe Herrick of Gutterman Research,” he launches into his own version of analyst-speak.
“Congratulations on the solid numbers — you always seem to come through in challenging times,” he said to Leo Kiely, president and chief executive officer of Molson Coors Brewing Co., on Feb. 12, convincingly parroting the obsequious banter common to the calls. “Can you provide some more color as to what you are doing for your supply chain initiatives to reduce manufacturing costs per hectoliter, as you originally promised $150 million in synergy or savings to decrease working capital?”

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