New Enrons EVERYWHERE!…”there is Moral Hazard EVERYWHERE from Glencore to Trafigura to Deutsche Bank…all unwinding and imploding because they thought they were SO SMART.”
by Bix Weir, Road to Roota,
SGT Report
October 27th, 2015
Moral hazard is a situation in which one party gets involved in a risky event knowing that it is protected against the risk and the other party will incur the cost.
Hmmm…
In the case of $90B market cap implosion Enron, it was a structuring of off-balance sheet entities that were used to artificially boost sales, hide questionable activities, skirt the regulators/auditors and enrich senior management that thought they were SO SMART at running the con that they obviously deserved a big payout.
It didn’t work out so well for Enron in the end.
Fast forward to today and there is Moral Hazard EVERYWHERE from Glencore to Trafigura to Deutsche Bank…all unwinding and imploding because they thought they were SO SMART.
Now we have an almost identical situation at a $90B market cap drug company called Valeant Pharmaceuticals. Today they came out and denied everything in a conference call (just like Enron did) but the evidence is mounting that the off-balance sheet entities were set up and structured to do the EXACT same thing as Enron’s…
1) Artificially boost sales
2) Hide questionable activities
3) Skirt regulators and auditors
4) Enrich senior management for running the con
Here are just a few of the articles with information and FACTS proving that Valeant was doing exactly what Enron was doing…just in a different industry and not quite as well.
The Rest…HERE
