From: Sandor K

Hmmm, another way to raise finance?

A city boy, Kenny, moved to the country and bought a donkey from an old
farmer for $100.00. The farmer agreed to deliver the donkey the next day.
The next day the farmer drove up and said, "Sorry son, but I have some bad
news, the donkey died."

Kenny replied, "Well then, just give me my money back."

The farmer said, "Can't do that. I went and spent it already."

Kenny said, "OK then, just unload the donkey."

The farmer asked, "What ya goanna do with him?"

Kenny, "I'm going to raffle him off."

Farmer, " You can't raffle off a dead donkey!"

Kenny, "Sure I can. Watch me. I just won't tell anybody he is dead."

A month later the farmer met up with Kenny and asked, "What happened with
that dead donkey?"

Kenny, "I raffled him off. I sold 500 tickets at two dollars apiece and
made a profit of $898.00."

Farmer, "Didn't anyone complain?"

Kenny, " Just the guy who won. So I gave him his two dollars back."

Kenny grew up and eventually became the chairman of Enron.


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Reply: 1
From: Tibor Bode

Sorry Sandor, I just can't resist,



Liked the story.
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Reply: 1.1
From: Rob .

I can't resist either.
If you had bought $1000.00 worth of Nortel stock one year ago, it would now be worth $49.00.
With Enron, you would have $16.50 of the original $1,000.00.
With Worldcom, you would have less than $5.00 left.
If you had bought $1,000.00 worth of Budweiser (the beer, not the stock) one year ago, drank all the beer, then turned in the cans for the 10 cent deposit, you would have $214.00.
Based on the above, my current investment advice is to drink heavily and recycle
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Reply: 1.1.1
From: Mike .

Funny stuff guys. has a book of Enron jokes:

"The Totally Unauthorised Enron Joke Book".

And it includes a few rippers, like "heard about the rumoured merger between Motorola and Enron? - It's called Moron". Tim Barry is the man responsible for this unauthorised joke book.

This fall, as Enron was going down, Chairman Ken Lay was desperately trying to raise cash.

In a meeting with top bankers, Lay presented a list of all the collateral the company had for a new loan. There were pipelines, contracts, receivables, a half-built plant in India -- quite a list.

But the bankers told him it wasn't enough: "Isn't there ANYTHING else you own that is fully paid for, that you can put up?"

And no one has seen Dick Cheney since.

On a more serious note, though, Enron's problems stem from a widely used practice called Off Balance Sheet Financing.

This refers to the way a company raises money which does not appear on the balance sheet, unlike loans, debt, or equity which do appear on the balance sheet.

Examples are joint ventures, R & D partnerships, and leases (rather than purchases of capital equipment).

This term came into household use during the Enron bankruptcy because much of the energy trader's problems stemmed from setting up inappropriate off-balance sheet entities.

At a recent finance seminar I attended here in London an accountant raised this issue and shocked everyone when he said that despite lenders knowing about this practice and despite new regulations which will be introduced within 5 years to control this practice, the lenders are still providing 25+ year loans based on this practice! In other words, it's business as usual! The wheels of business must keep turning. Unbelievable. 8^O

For those of you who may want to know more about Off Balance Sheet Finance I've attached a couple of articles from the web.

Regards, Mike
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