Originally published at: https://boingboing.net/2019/08/16/worse-than-enron.html
…
2 Likes
30 Likes
I think of this scene any time I read anything about either GE or Samsung
7 Likes
Was that from 30 Rock?
4 Likes
Yes. Devin Banks, Jack’s archrival.
“Keep your friends close… And your enemies so close you’re almost kissing”
11 Likes
7 Likes
I read this, but my first take was: GE makes stuff. I mean, physical stuff you can see, weigh, measure and yes, sell. So it is possible their accounting is funny and they are not making the profit off that stuff they are claiming, or it’s swamped by other costs and charges they have, but it is still not like Enron. With Enron nobody could much figure out what they did, or how they made their money, and it did turn out to be a giant flim-flam job. And unlike Enron, the value of GE is not likely to go to zero: they have assets and businesses that are certainly worth something.
11 Likes
Enron provided electricity and natural gas in addition to selling paper and being a communications company. They did actually sell stuff, and also had a lot of assets that were worth something. The problem is that if your debts outweigh your assets, then the stocks are still going to be worth nothing if your company goes bankrupt and is liquidated.
11 Likes
If Markopolos is lying, he should go to jail in the cell right next to Bernie’s. I do not think the description of this article sufficiently demonstrates the motive for Markopolos to make this report as it was handed over to a short hedge fund the the day BEFORE public dissemination. He was employed by this hedge fund and would be rewarded handsomely with a percentage of the short profits after market correction specifically targeted at GE. This, the second cousin to insider trading, is called market manipulation and it is illegal. Today, GE got most of the losses back because Wall Street thinks Markopolos is lying. Of course it doesn’t hurt when Culp, GE’s CEO, put his money where his mouth is by doubling down on his GE investment by buying $2,000,000 worth of shares in GE, the company who Markopolos says will file for bankruptcy in a matter of months.
3 Likes
Off topic, but I there is an episode of the Household Name podcast about how the Enron emails that came out during the investigation were used to build today’s spam filters.
1 Like
The biggest share of GE’s revenue is their capital division, which is essentially a retail credit lender. That business is nearly double the next biggest segment, power and water.
16 Likes
Enron didn’t exactly “provide” electricity and natural gas. They morphed their business into being an intermediary, and most of what they did in the energy sector was trade derivatives contracts.
11 Likes
They USED to make stuff. But some bright eyed and bushy tailed financial wizards convinced the board that ‘financializing’ the company was the path forward rather than actually innovating and making stuff. It has been a downhill spiral ever since.
19 Likes
GE owns NBC and MSNBC, I better stock up on popcorn for this one
7 Likes
Don’t we all?
18 Likes
Same thing happened to Remington.
4 Likes
For i:= 1 to Number_US_20th_Century_Tech_Companies do
9 Likes
GE Digital ftw!!! 
What a train wreck that turned out to be!
1 Like
Markopolos and his team just released a 175-page report called GENERAL ELECTRIC, A BIGGER FRAUD THAN ENRON, which accuses the firm of using accounting tricks to paper over $40b in liabilities and to disguise problems with the company’s stake in oil services firm Baker Hughes.
I tried eyeballing report but I couldn’t look at it for more than a few minutes because some of the images are too cringy.
Even Michael Scott would think they were distasteful.
Seems like GE has been getting slowly hollowed out over time. The appliance division… sold off to Haier. GE Plastics… sold to the Saudis, now known as SABIC. GE Transportation Systems (locomotives and rail equipment), now off to Wabtec. How much of the GE that actually makes things is left?
8 Likes
