Enron, Can We Get New Debt Lines With You?

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Enron drew down the credit lines. They actually went and asked the banks, hey, can we get new debt lines with you? And every single one said no. So after they do that, the credit agencies immediately downgrade Enron's credit rating finally. No one has been underwriting this company to decide if they're credit worthy or not. But it's obvious and runs in a death spiral. Ken Lay starts calling around to all of his political connections in the Bush administration,. basically with his handout looking for a bailout.

The FTX fraud has dominated headlines now for weeks, during which we’ve debated if and how Acquired could uniquely add to the conversation. Then we realized there was an angle so perfect that we had to drop everything and enter Acquired research overdrive: Enron. Travel back with us to the granddaddy fraud of them all, 2001’s then-largest bankruptcy in US history and the impetus for the famous Sarbanes-Oxley Act. So much of Enron’s history parallels FTX that the uncanniness is almost unbelievable — right down to the same CEO running the two bankruptcies. Sit back and enjoy this crazy tale of villainy, greed, and the nature of humans and money. Maybe just don’t take notes on this one…

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‍Note: Acquired hosts and guests may hold assets discussed in this episode. This podcast is not investment advice, and is intended for informational and entertainment purposes only. You should do your own research and make your own independent decisions when considering any financial transactions.