think or thwim

In March of 2001 Bethany McLean wrote an article for Fortune Magazine called Is Enron Overpriced? The title should have been “How the hell does Enron make money?” because she mainly questions Enron’s mysterious accounting:

How exactly does Enron make its money? Details are hard to come by because Enron keeps many of the specifics confidential for what it terms “competitive reasons.” And the numbers that Enron does present are often extremely complicated. Even quantitatively minded Wall Streeters who scrutinize the company for a living think so. “If you figure it out, let me know,” laughs credit analyst Todd Shipman at S&P.

Of course it turns out they weren’t actually making money, but were just really good actors. After Enron imploded, McLean wrote a book about it. The Smartest Guys in the Room was published in 2003, and in 2005 it was turned into this movie.

I paid attention to this stuff as it was happening, but I’m amazed at how much I learned watching this. It’s a different picture than I got watching the news.

Andy Fastow is scheduled to be released from prison in December 2011. Jeff Skilling gets out in 2030.