Posted on 12/05/2001 5:39:39 PM PST by NativeNewYorker
Even though we knew this partnership was created by Enron, we always called it "funny money" because it wasn't clear how they were capitalized. We protected ourselves by demanding cash up front, and the partnership always paid its bills on time.
For reasons that were unexplained at the time, this Enron partnership wanted to get out of the deal about a year ago. We happily bought them out at a very attractive price.
Now, it all makes sense.
Let's put this portion from that linked article in front of all the grownups---------------------
"The current Bush administration is also studded with Enron connections. Secretary of the Army Thomas White is a former high-ranking Enron executive, and Robert Zoellick, the U.S. Trade representative, was a paid member of Enron's advisory board. The Washington consulting firm run by Lawrence Lindsey, the White House's top economic advisor, worked for Enron. And other top officials, including Karl Rove, Bush's chief political strategist and I. Lewis Libby, Vice President Dick Cheney's chief of staff, both owned huge chunks of Enron stock when they joined the Bush administration. It's also worth remembering that at the end of the first Bush administration, Enron hired chief of staff James Baker and Commerce Secretary Robert Mosbacher."
And yet, not a SINGLE word in that article about the CPA firm who produced all of those financial statements, Arthur Andersen, much less that its sister firm Andersen Consulting (aka Accenture) was reaping multi-Millions in lucrative consulting fees from Enron while said financial statements were being fed to the public...
Gee, no conflict of interest there! < /SARCASM >
"Kudos to the Bush team for taking Enron's legal campaign contributions without giving Enron anything of substance in Washington."
From This -------
"The current Bush administration is also studded with Enron connections. Secretary of the Army Thomas White is a former high-ranking Enron executive, and Robert Zoellick, the U.S. Trade representative, was a paid member of Enron's advisory board. The Washington consulting firm run by Lawrence Lindsey, the White House's top economic advisor, worked for Enron. And other top officials, including Karl Rove, Bush's chief political strategist and I. Lewis Libby, Vice President Dick Cheney's chief of staff, both owned huge chunks of Enron stock when they joined the Bush administration. It's also worth remembering that at the end of the first Bush administration, Enron hired chief of staff James Baker and Commerce Secretary Robert Mosbacher."
By ADAM GELLER, AP Business Writer
NEW YORK (AP) - J.P. Morgan Chase & Co. now says it has $2.6 billion in exposure stemming from the collapse of Enron Corp. - more than double what it previously disclosed - including nearly $1 billion it says it is owed by insurance companies.
J.P. Morgan executives said in a conference call Thursday that the firm has now disclosed the entirety of its Enron exposure, and expects to receive payment on much of it.
But that assurance came even as J.P. Morgan said it has sued several insurance companies demanding payments related to $1.1 billion in oil and gas contracts, including $965 million owed to the bank.
Enron Corp. filed for Chapter 11 bankruptcy protection earlier this month in one of the largest corporate collapses in U.S. history.
The insurance companies issued policies guaranteeing Enron obligations, but are now trying to avoid payment.
In addition, Morgan said a European financial institution, which it would not identify, has failed to make payment on a $165 million letter of credit backing an Enron-related swap contract. Morgan said it will seek enforcement of the letter of credit.
The bank said its secured exposure to Enron also includes $600 million in loan and trading exposure and $250 million in debtor-in-possession financing.
The combination means the bank's secured exposure totals about $1.98 billion. That is significantly higher than the $400 million in secured exposure the company had specifically explained late last month.
J.P. Morgan said it also has $620 million in unsecured exposure to Enron. That is higher than the $500 million initially detailed by the company, a figure it has sought to clarify in recent days.
The bank said it will take a charge of $220 million in the fourth quarter and will reduce its quarterly trading revenues by $235 million to account for the unsecured exposure. The remaining exposure will be classified as non-performing.
Sharada Vibhakar, an analyst at Parker Hunter Inc., said the company had previously not been candid about its exposure but the new information appears to be complete.
``I have pretty high confidence in them coming clean,'' Vibhakar said. ``I think it's at least hopeful they'll regain some of this.''
Shares of JP Morgan fell $1.48 to close at $36.52 in trading Thursday on the New York Stock Exchange.
Just curious How you arrived at this -----
"Kudos to the Bush team for taking Enron's legal campaign contributions without giving Enron anything of substance in Washington."
From This -------
"Secretary of the Army Thomas White is a former high-ranking Enron executive"
Enron was transformed from a legitimate company into a fraudulent house of cards. Former Enron executives had little to do with that transformation, and offered Enron nothing for its current political donations.
"and Robert Zoellick, the U.S. Trade representative, was a paid member of Enron's advisory board."
Enron had lots of advisors over time. Hiring outside consultants is common, and conveys no permanent link between company and consultant, per se. Likewise, advisors have lots of clients. If we held every advisor responsible for the future actions of all past companies that they advised, no one would any credibility.
" The Washington consulting firm run by Lawrence Lindsey, the White House's top economic advisor, worked for Enron."
Lots of consulting companies advised Enron just as lots of law firms represented Enron. That doesn't per se mean much, especially in Washington.
" And other top officials, including Karl Rove, Bush's chief political strategist and I. Lewis Libby, Vice President Dick Cheney's chief of staff, both owned huge chunks of Enron stock when they joined the Bush administration."
The great irony with those statements centers around the fact that Leftists gave Cheney and Rove such grief over having a potential conflict of interest that they were forced to sell their shares of stock long before Enron's stock price crashed. Had their critics been silent, Cheney and Rove would have taken a huge financial bath just like every other clueless investor who held stock in that company thinking that it was a good investment at the time.
What you cited were gross generalizations, leaps of logic, and guilt by association and innuendo. Ken Lay tried to buy his way onto GWB's cabinet, but he got NOTHING for his trouble. On the other hand, when he tried the same thing for Enron via Lloyd Bentson with the Clinton administration, he got his crony placed as Secretary of the Treasury.
All acceptable(unless it's the Dems).
O.K., it's not finished yet.
" J.P. Morgan Chase vice chairman Marc Shapiro: “Since that time (of earlier announced Enron exposure), two things have happened to make us change our disclosure. One is that a loan in which our share was a little less than $100 million, and we were agent on a $2 billion facility, in which we believed we were secured by third-party receivables, appear to be more secured by Enron receivables. That would obviously change the characterization from secured to unsecured. We filed suit on behalf of that syndicate of banks seeking to redress that situation and provide more information on it. That caused our unsecured exposure to go up from $500 million to $600 million. The second thing that has happened is that surety bonds and letters of credit that backed up a significant number of transactions we had with Enron, that are generally called ‘pre-paid forward transactions,’ the issuers of those surety bonds and letters of credit had indicated to us in discussions that they may not make timely payment which is due on this coming Friday. The total amount of those transactions backed by surety bonds – our share is about $1 billion and another $165 million that is backed by a letter of credit. Obviously this was a surprise to us, because we expected these to be promptly paid.”
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