Friday, January 05, 2007

Less Facts, More Analysis


Enron, National Security, Nazi Germany,Using All Available Information, Fact Gathering v. Analysis, Yale Law Professor's Law Review Articles, and some students from Cornell. A little something for everyone from America's most interesting writer.


At Saturday, January 06, 2007 11:38:00 AM, Blogger UCLaw98 said...

I can only say that I found this very interesting. I will now spend the next two weeks misrepresenting what he actually said. Moose, did you read Tipping Point?

At Saturday, January 06, 2007 3:56:00 PM, Blogger UCLaw98 said...

I read both Tipping Point and Blink. I liked -- not loved -- both of them. I prefer his essays and articles over his books.
-Moose (from India)

At Monday, January 08, 2007 4:47:00 PM, Blogger michael budelsky said...

I suppose it was an interesting article. However, you usually expect an article like this to explain what happened and then propose what to do about it in the future.

It seems that his discussion ends at the point where he decides that unraveling the Enron matter is so complex that it requires special analysts to step back and see it from a different perspective (treat it as a mystery instead of a puzzle).

So what is the next step? How do you prevent future Enron meltdowns from hiding amidst an avalanche of paperwork? Should there be some sort of government watchdog think tank to be on the lookout for problems like this?

It seems to me that things worked out pretty much like they were supposed to in the free market. The journalist, the trader, the IRS, and that group of MBA students all figured it out. The web of lies fell apart. The parties responsible went to jail. Was there really any way that some sort of earlier detection or intervention would have kept the company from crumbling and people from losing their life savings (don't even get me started on those dolts who invested all of their retirement savings in one company, their employer)?

At Tuesday, January 09, 2007 8:14:00 PM, Blogger UCLaw98 said...

See, I kinda saw the point of the article that if everything was out in the open, did they really do anything wrong?

At Saturday, January 13, 2007 7:04:00 AM, Blogger Hammond Law Group LLC said...

It seems to me that one way to solve the problem is that investors ought to leave investing to the experts.

These weekend traders are taking their financial lives into their own hands by thinking that they can outsmart the professionals.

Similarily I would never trust some broker who relies on "hot tips" etc. That type of investing is more akin to gambling than investing.

Then the liable parties will be the investor consultants (i.e. traders) who are derelect in their duty (i.e. pushing "hot" stocks without performing due diligence and/or staying away from companies who engage in too-complicated-to-be-rational business practices).

The other solution is (if you're like me) to just invest in a few well-diversified mutual funds which are not actively traded; ideally index funds.

As a relevant aside, companies ought not be able to gamble with employee's pensions. While not mentioned here, my understanding is that Enron enticed their own employees to over-invest in Enron. This scheme to over-whelm the uninitiated is unconscionable and ought to be able to be cured with a few small regualtions (e.g. passive 401K-type pension money must be put into broad based investments).



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