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You've heard the different political theories:
Feudalism: You have two cows. Your lord takes some of the milk.
Fascism: You have two cows. The government takes both, hires you to take
care of them and sells you the milk
Communism: You have two cows. You must take care of them, but the government
takes all of the milk.
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: You have two cows. You borrow 80% of the forward value of the two
cows from you bank, then buy another cow with 5% down and the rest financed
by the seller on a note callable if your market cap goes below $20B at a
rate 2 times prime. You now sell three cows to you publicly listed company,
using letters of credit opened by your brother-in-law at a 2nd bank, then
execute a debt/equity swap with an associated general offer so that you get
four cows back, with a tax exemption for five cows. The milk rights of six
cows are transferred via an intermediary to a Cayman Island company secretly
owned by the majority shareholder who sells the rights to seven cows back to
you listed company. The annual report says the company owns eight cows, with
an option on one more and this transaction process is upheld by your
independent auditor and no Balance sheet provided with the press release
that announces that Enron, as a major owner of cows, will begin trading cows
via the internet site COW.com (cows on web).
I am sure you now fully understand what happened.
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