How to Explain Enron to Your Children:

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. Your neighbors help
take care of them and
you share the milk.

Totalitarianism - You have two cows. The government
takes them both and
denies they ever existed and drafts you into the army.
 Milk is banned.

 Capitalism - You have two cows. You sell one and buy
a bull. Your herd
multiplies, and the economy grows. You sell the milk
and retire on the
income.

 Enron - You have two cows. You sell three of them to
your
publicly-listed company, using letters of credit
opened by your
brother-in-law at the bank, then execute a debt/equity
swap with an
associated general offer so that you get all four cows
back, with a tax
exemption for five cows. The milk rights of the six
cows are transferred
via an intermediary to a Cayman Islands partnership
secretly owned by
the CFO of the publicly listed company who sells the
rights to all seven
cows back to your listed company. The annual report
says the company
owns eight cows, with an option on one more, and that
these and certain
other cow-related activities give milk, both realized
and
unrealized/notional, at an annual run rate of 1.54
billion gallons