[3608] in Humor
The Two Cows Joke, Enron style
daemon@ATHENA.MIT.EDU (Andrew Bennett)
Wed Feb 6 16:20:12 2002
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From: "Andrew Bennett" <abennett@MIT.EDU>
To: <humor@mit.edu>
Date: Wed, 6 Feb 2002 16:18:11 -0500
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In case you were wondering how Enron came into so
much trouble, here is an explanation reputedly
given by a Colorado "Aggie" professor to
explain it in terms her students could
understand.
Capitalism: You have two cows. You sell one and
buy a bull.
Your herd multiplies, and the economy grows. You
sell them and retire on the income.
Enron Capitalism: You have two cows. You sell
three of them to your publicly listed company,
using letters of credit opened by your
brother-in-law at the bank, then execute a
debt/equity swap with an associated general offer
so that you get all four cows back, with a tax
exemption for five cows.
The milk rights of the six cows are transferred
via an intermediary to a Cayman Island company,
secretly owned by your CFO, who sells the rights
to all seven cows back to your listed company.
The annual report says the company owns eight
cows, with an option on six more.
