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Rising Star
Pro
Well this is telling....
Pro
Is the saying “man of the house” sexist?
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Is anyone still going to Sawcon this summer?
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Pro
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Rising Star
Rising Star
Cameras must be on!
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And as an auditor just my two cents: Enron didn’t go under because of poor accounting, they intentionally hid losses using technicalities in how ownership interests in specific company structures worked (prior to the scandal). At the end of the day they only used the technicalities to hide massive and very real losses they experienced from horrendously risky investments
Rising Star
Hubris, greed, lack of ethics.
Chief
They were poorly run and managed risk/compliance poorly.
Over the long haul almost all companies will go under eventually. Unless they are consistently expanding into new segments and making good use of their capital.
Rising Star
Morgan Stanley cut a last minute deal with Mitsubishi financial group as a financial backstop, to be able to open doors on Monday
Pro
Read The Smartest Guys in the Room by McLean and ACollossal Failure of Common Sense. They're great books. Enjoy.
Also luck. Enron is a separate case, but many of the examples you cite are classic runs on the banks. There’s no way to defend against widespread panic and still be a successful bank. The banking system relies solely on trust. When that goes, the bank, no matter how solid, goes.
Several books and documentaries are out there describing what actually happened. You may find some of those interesting.
Yes. I've read Sorkin's "Too Big To Fail" and another book called "The Devil's Casino," I forget who wrote it. Both are excellent reads, though much of what both authors offer as reasons for the respective falls of Lehman Brothers and Merrill Lynch, seem to run counter to what some of commented on this site. Hmm, kinda confusing. Thx for the suggestion.
Rising Star
I think when you work for a behemoth of a company there gets to be an attitude of they have so much money it doesn't matter how much we spend. A small example i was having carpal tunnel issues they didn't recommend the $75 mouse but the $1,000 desk. I went with the mouse which I researched and found and I was fine.
One of the VP was travelling all over the world with his mistress on "company business" although she got fired when head office finally figured it out. She got 3 promotions in one year she was getting expensive. And he took a golden parachute.
Same thing happened at another company I was at. A different male VP. The mistress got fired and he got "promoted " to South Africa.
Someone went on business to Australia for a month came back with tons of photos and stories about basically what a great vacation he'd had.
Got a new director he ordered about 3 million dollars worth of stored parts to be thrown out because he thought they weren't stored neatly enough. Just 3 weeks before the great clean out. I used a few of those stored parts to assemble a testing apparatus saving the company about $100,000 vs ordering new.
Does that help explain why some big companies fail?
Yes, seems that distorted priorities, greed, and misappropriation of revenue, can all lead to disaster and the house of cards come tumbling down. In the '80s, Tears for Fears got it right when they said "Everybody Wants to Rule the World." This time however, they won't be "right behind you" when you fall. Thanks for your input.
Anyone else remember the Cedant fallout back in ‘01 when Walter and Kirk were at the helm?
At the time, this debacle was the largest accounting fraud until Enron faced the music - the bigger they come, the harder they fall…
*Cendant
(Apologies, a bit blurry that far down memory lane…)
Capitalism in a low regulation environment . It’s that simple
Edit: okay you know alll those friends who brag about stock market gains and insist that they know how to get rich quick but are real quiet when the market goes down? Well imagine they’re given access to a multi billion dollar retirement account
Rising Star
The Peter Principle at work
Corporate greed.
Enron-401 KSuit. I think I have a book on the actual case. It’s old. Lol
Chief
Absolute Power, Corrupt Absolutely ! This is the Nature of the Beast !
Chief
Corrupts not Corrupt
Greed, regulatory ineptitude, crafty deception, corporate malfeasance, lack of diversification and poor loan origination and securitization of assets, and golden parachutes for underperforming CEOs.