Enron #2

1. How does a Special-Purpose Entity (S.P.E.) work? Why does the "partnership" giving money to your company make a big difference?

It works by having a partnership that took leases from the company which will most likely have promising profits in the future, get lent from the bank, and then give that money to the company when they are in debt or when they are doing poorly. The partnership is so important because they lend the money to the company so the loan does not show up in the company balance sheet and it can raise capital without increasing it indebtedness.

2. How did Enron pit "twists into the S.P.E. game?" What does it mean that Enron "didn't always put blue-chip assets into the partnerships"? What was problematic about Enron using its own executives to manage the S.P.E? What was Enron's guarantee?

They did this by getting the banks and partnerships to play along so that no questions were asked. This means they were not always honest. The problem was they were making the deals work themselves. Their guarantee was thay could, if their value declined, make up the difference with its own stock.

3. How did the world come to learn of Enron's use of S.P.E.'s? Is Gladwell correct in claiming that this is another example of a mystery? Explain.

The world became aware through the reporting of several people from the Wall Street Journal. Gladwell is correct in claiming that this is another example of a mystery because it once again presents evidence that is misleading instead of straight forward.

4. What is the difference between "scrounged up" and "downloaded?"

The difference is that downloaded suggests it was easily accessed information whereas scrounged suggests he had to fight for it.

5. Why does Gladwell claim that "It scarcely would have helped investors if Enron had made all three million pages public."? Explain what Gladwell means when he says, "But here the rules seem different." Who is Andrew Fastow?

He means the information would have been so extensive and complex it would be impossible to follow. He means that the more information there is the more complicated the problem gets. He is Enron’s chief financial officer.

6. Why has he "Disclosure Paradigm" become an anachronism?

It has become this because it is an error in chronology.

7. Why did treating the German secret weapon as a mystery prove to be more useful? Specifically, how did the "propaganda analysts" (the batty geniuses) use reason to uncover the Nazi V-1 Rocket?

It proved to be more useful because it showed that the solution to the problem could be found within the information that was already given and more information was unneeded. They looked more closely at the information they had to uncover the solution.

8. How has diagnosing Prostate Cancer transformed from a puzzle to a mystery?

It has transformed because the solution used to be found through a simple procedure and conclusion but now it is more complicated and often times the more information there is about it the more complicated it becomes.

9. Following the fall of the Soviet Union, how has "the situation facing the intelligence community has turned upside down?"

It is upside down because it used to be that the more information they had the easier they could solve the problem but now because they have too much information they only have more questions and that makes it harder to solve the problem

. 10. How does Admiral Bobby R. Inman believe the U.S. should strengthen the U.S. intelligence system? Why was his answer seen as unusual?

He believed more geniuses and less spies would strengthen it. This was unusual because it meant that we needed to look closer at the information we had than try to obtain more.

11. Gladwell writes: In a post-Cold War world of "openly available information," Inman said, "what you need are observers with language ability, with understanding of the religions, cultures of the countries they're observing." Inman thought we needed fewer spies and more slightly batty geniuses. Does this curriculum sound familiar?

Yes because it suggests that we needed to look closer at the information we had than try to obtain more, which shows that it is a mystery because Gladwell said a mystery is when more information makes a situation worse not better.