I recently watched “The Smartest Guys in the Room” on DVD. It documents the rise and fall of Enron. It is based on a book, and the authors of the book have a large part in commentary of the movie. It is shot in a PBS documentary sort of way, but is actually very entertaining.
I’ve only known about Enron from the headlines. I’ve heard about Jeff Skilling and Ken Lay, but really knew very little about either of them. The movie does a great job of detailing the questionable political relationships between George Bush Sr., George Bush Jr. and Ken Lay. At one point in the movie, they even discussed the large amount of speculation within Enron that Ken Lay was going to be appointed to be the head of the Department of Energy under George Bush Jr.
The movie left me with the feeling that Jeff Skilling was the mastermind behind the corporation. A smart ivy-league grad, he masterminded which accounting approach the company would use to achieve their stellar growth numbers (”mark to market” accounting - http://en.wikipedia.org/wiki/Mark_to_market), the whole concept of commoditizing the energy market, and eventually went on to ideas of commoditizing the broadband and weather markets.
It was a great movie and I recommend it as a good watch on the basis of learning more about what to look for when analyzing corporate financial statements. The movie outlined some of the red flags in regards to Enron’s books, the act of the large banking institutions turning a blind eye to Enron’s questionable conflicts of interest, and the incredible power that large corporations have in impacting local, statewide, and national politics.
on Jan 25th, 2007 at 5:44 am
Nice Post.
That was well said. Always appreciate your indepth views. Keep up the great work!
John