Allen,
Most analysts out there on Enron were taken by suprise by Enrons real figures. The reason why is that the audits purposely obfuscated the truth. (The opposite of what they are supposed to do). If the audits were so good and the information was disclosed why is Arthur Andersen (sorry for that spelling) now defacto defunct?
Could it be:
“The evidence available to us suggests that Andersen did not fulfill its professional responsibilities in connection with its audits of Enron’s financial statements, or its obligation to bring to the attention of Enron’s Board (or the Audit and Compliance Committee) concerns about Enron’s internal contracts over the related-party transactions”. **from the verdict against Andersen, wikipedia
All of this information came out in hearing that lead to our whole new set of laws called Sarbanes-Oxley. It was a gigantic deal back then. So I do not think your statement that “but everything was extensively annotated and footnoted” is/was shared by the thousands if not millions involved. If the courts would have agreed with you Arthur Andersen would still be with the living.
The analysts who were bearish did not know for sure Enron was lying they had to take leaps of Faith and fight against that “drinking the coolaid mentality” you speak of. But for you to insinuate that the audits were clean flys in the face of fact.
Are you saying that you were able to see through the Andersen audit and see Enrons shady deals? Very Impressive. I am glad that you can see exactly what the FED is doing with taxpayer committment. I am confident that you (haveing read the FEDS audit) can succintly let us know the answers to the questions I raised above.
I do not understand how you could try and counter my arguement using the “few analysts” who saw Enron coming and not see how that contradicts you own arguement. Anyone who is not in favor of an audit is drinking from the FED’s Koolaid – that same “buying the hype” crowd you spoke of in your post. Or they suspect that a real audit might reveal a gigantic ponzi scheme. 99% of Americans are worse off after our credit crisis. Mr. Bernenke, the guy people are defending (by not advocating a real audit) told us all in May 2008 all would be fine and we would not hit a recession. He also told us Freddie and Fannie would be fine. And you want to use his figures? You would read the “free info” and take it as fact?
At some point we all have to make a decision on who to believe and who to back. I don’t believe one thing that Bernanke chooses to say becasue while some if it may be true I know that the FED is not on the side of the taxpayer but needs the taxpayer to survive. If they want to come clean with a real audit and the results show how great they have helped America – fine I am happy to change my mind in the face of new information.
