Paul,

Vince and I spent some time thinking about the diligence process for the 
trading analytics.   There is a limited amount that can be accomplished in a 
two day time period.   I think a reasonable start would be the following:

1.  Obtain an audited history of the trading strategies which have been 
implemented in order to verify profitability, and P/L volatility of each.
2.  Review needed working capital and risk capital requirements and compare 
these to projections for trading income.
3.  Review current level of access to electronic markets and verify that a 
change of ownership would not have adverse consequences, i.e. are there 
guarantees of continued access using the current systems?
4.  Review feasibility of entry into proposed new markets?   It is far from 
clear that there will be any synergy with most commodity markets given the 
current limited "electronic" liquidity.
5.  Review, at least qualitatively, the current trading strategies being 
used.   Try to develop some estimate of how fast the profitability of these 
strategies will disappear as other's implement similar trading models.   What 
is the trade off between trade quantity and slippage.
6.  Review the methodology used to generate new trading strategies which will 
be needed to replace the current models as they become unprofitable and 
outdated.
7.  Try to determine if there will be any value in transfer of trading 
technology to Enron's other markets, given the illiquidity of these markets 
as compared to the financial equity markets.

If there were a sufficiently long time horizon for our analysis, we would 
probably want to run their system on a test set of data.

Let me know if you have other suggestions.

--Stinson