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Clips from Enron: The Smartest Guys in the Room (2005)

We're now in the process of seeing

"We're now in the process of seeing"

Enron: The Smartest Guys in the Room (2005)

if we can create a bandwidth trading market.

"if we can create a bandwidth trading market."

Enron: The Smartest Guys in the Room (2005)

Enron is using its knowledge of trading gas

"Enron is using its knowledge of trading gas"

Enron: The Smartest Guys in the Room (2005)

to barter other forms of energy even space

"to barter other forms of energy even space"

Enron: The Smartest Guys in the Room (2005)

on the information superhighway called bandwidth.

"on the information superhighway called bandwidth."

Enron: The Smartest Guys in the Room (2005)

Ken Rice has worked at Enron for twenty years.

"Ken Rice has worked at Enron for twenty years."

Enron: The Smartest Guys in the Room (2005)

Enron has found a way to stay ahead of the curve.

"Enron has found a way to stay ahead of the curve."

Enron: The Smartest Guys in the Room (2005)

From 7 PM to 7 AM we're paying for bandwith that

"From 7 PM to 7 AM we're paying for bandwith that"

Enron: The Smartest Guys in the Room (2005)

we are not using. Why?

"we are not using. Why?"

Enron: The Smartest Guys in the Room (2005)

Why?

"Why?"

Enron: The Smartest Guys in the Room (2005)

One of our themes around here is to always be asking why.

"One of our themes around here is to always be asking why."

Enron: The Smartest Guys in the Room (2005)

Why something's done a certain way

"Why something's done a certain way"

Enron: The Smartest Guys in the Room (2005)

or why it's not done a different way.

"or why it's not done a different way."

Enron: The Smartest Guys in the Room (2005)

There's our market.

"There's our market."

Enron: The Smartest Guys in the Room (2005)

Why can't we sell the bandwidth to other companies?

"Why can't we sell the bandwidth to other companies?"

Enron: The Smartest Guys in the Room (2005)

Make it a commodity like a pork belly

"Make it a commodity like a pork belly"

Enron: The Smartest Guys in the Room (2005)

Just last week Enron captivated Wall Street

"Just last week Enron captivated Wall Street"

Enron: The Smartest Guys in the Room (2005)

with its bold move into broadband,

"with its bold move into broadband,"

Enron: The Smartest Guys in the Room (2005)

teaming up with Blockbuster to deliver movies on demand.

"teaming up with Blockbuster to deliver movies on demand."

Enron: The Smartest Guys in the Room (2005)

It was like being at a religious cult meeting.

"It was like being at a religious cult meeting."

Enron: The Smartest Guys in the Room (2005)

People started jumping up from their seats,

"People started jumping up from their seats,"

Enron: The Smartest Guys in the Room (2005)

with their cell phones and their Blackberrys,

"with their cell phones and their Blackberrys,"

Enron: The Smartest Guys in the Room (2005)

running out to the halls to call their bosses.

"running out to the halls to call their bosses."

Enron: The Smartest Guys in the Room (2005)

One analyst summed up his recommendation

"One analyst summed up his recommendation"

Enron: The Smartest Guys in the Room (2005)

to investors in one word

"to investors in one word"

Enron: The Smartest Guys in the Room (2005)

Wow. Enron's stock soared 34 percent in two days.

"Wow. Enron's stock soared 34 percent in two days."

Enron: The Smartest Guys in the Room (2005)

And you can tell from the response of the stock market

"And you can tell from the response of the stock market"

Enron: The Smartest Guys in the Room (2005)

that they like the strategy. It makes sense.

"that they like the strategy. It makes sense."

Enron: The Smartest Guys in the Room (2005)

They announced that they had developed the technology.

"They announced that they had developed the technology."

Enron: The Smartest Guys in the Room (2005)

It would be in test markets by the end of the year.

"It would be in test markets by the end of the year."

Enron: The Smartest Guys in the Room (2005)

And the technology works.

"And the technology works."

Enron: The Smartest Guys in the Room (2005)

The quality is great and the customers like this,

"The quality is great and the customers like this,"

Enron: The Smartest Guys in the Room (2005)

so we've made a lot of progress.

"so we've made a lot of progress."

Enron: The Smartest Guys in the Room (2005)

The truth was that Enron was just struggling

"The truth was that Enron was just struggling"

Enron: The Smartest Guys in the Room (2005)

with the technology for video on demand.

"with the technology for video on demand."

Enron: The Smartest Guys in the Room (2005)

The technology didn't work

"The technology didn't work"

Enron: The Smartest Guys in the Room (2005)

and the deal with Blockbuster soon collapsed.

"and the deal with Blockbuster soon collapsed."

Enron: The Smartest Guys in the Room (2005)

But with the magic of mark-to-market Enron

"But with the magic of mark-to-market Enron"

Enron: The Smartest Guys in the Room (2005)

used future projections to book $53 million in earnings

"used future projections to book $53 million in earnings"

Enron: The Smartest Guys in the Room (2005)

on a deal that didn't make a penny.

"on a deal that didn't make a penny."

Enron: The Smartest Guys in the Room (2005)

By the end of the year 2000,

"By the end of the year 2000,"

Enron: The Smartest Guys in the Room (2005)

Enron was running out of ways to make

"Enron was running out of ways to make"

Enron: The Smartest Guys in the Room (2005)

the broadband business look successful.

"the broadband business look successful."

Enron: The Smartest Guys in the Room (2005)

They'd tried every trick in the bag to try to create

"They'd tried every trick in the bag to try to create"

Enron: The Smartest Guys in the Room (2005)

the illusion of a business where there was none,

"the illusion of a business where there was none,"

Enron: The Smartest Guys in the Room (2005)

and the people who were working

"and the people who were working"

Enron: The Smartest Guys in the Room (2005)

there were getting increasingly desperate.

"there were getting increasingly desperate."

Enron: The Smartest Guys in the Room (2005)

The executives started selling their stock.

"The executives started selling their stock."

Enron: The Smartest Guys in the Room (2005)

By Enron's collapse, Ken Rice had sold 53 million.

"By Enron's collapse, Ken Rice had sold 53 million."

Enron: The Smartest Guys in the Room (2005)

Ken Lay had sold 300 million.

"Ken Lay had sold 300 million."

Enron: The Smartest Guys in the Room (2005)

Cliff Baxter 35 million.

"Cliff Baxter 35 million."

Enron: The Smartest Guys in the Room (2005)

Jeff Skilling 200 million.

"Jeff Skilling 200 million."

Enron: The Smartest Guys in the Room (2005)

As the fraud is perpetuated,

"As the fraud is perpetuated,"

Enron: The Smartest Guys in the Room (2005)

all the various lies and artifices

"all the various lies and artifices"

Enron: The Smartest Guys in the Room (2005)

begin to convince the ringmaster,

"begin to convince the ringmaster,"

Enron: The Smartest Guys in the Room (2005)

if you will, himself

"if you will, himself"

Enron: The Smartest Guys in the Room (2005)

that it's thi own bizarre reality.

"that it's thi own bizarre reality."

Enron: The Smartest Guys in the Room (2005)

That in fact, the fraud is the reality.

"That in fact, the fraud is the reality."

Enron: The Smartest Guys in the Room (2005)

The perception is the reality.

"The perception is the reality."

Enron: The Smartest Guys in the Room (2005)

As long as you can keep the perception going on,

"As long as you can keep the perception going on,"

Enron: The Smartest Guys in the Room (2005)

it really isn't fraud.

"it really isn't fraud."

Enron: The Smartest Guys in the Room (2005)

You spoke about bandwidth trading,

"You spoke about bandwidth trading,"

Enron: The Smartest Guys in the Room (2005)

what about weather options or futures?

"what about weather options or futures?"

Enron: The Smartest Guys in the Room (2005)

How is that market developing?

"How is that market developing?"

Enron: The Smartest Guys in the Room (2005)

Yeah, we have a market in weather.

"Yeah, we have a market in weather."

Enron: The Smartest Guys in the Room (2005)

When Enron announced its latest plan to trade weather,

"When Enron announced its latest plan to trade weather,"

Enron: The Smartest Guys in the Room (2005)

people wondered whether it was good science

"people wondered whether it was good science"

Enron: The Smartest Guys in the Room (2005)

or science fiction.

"or science fiction."

Enron: The Smartest Guys in the Room (2005)

Do the weather guys get punished here

"Do the weather guys get punished here"

Enron: The Smartest Guys in the Room (2005)

if the weather is wrong?

"if the weather is wrong?"

Enron: The Smartest Guys in the Room (2005)

I mean they predict wrong?

"I mean they predict wrong?"

Enron: The Smartest Guys in the Room (2005)

I don't know, do you have any whip marks on your back there?

"I don't know, do you have any whip marks on your back there?"

Enron: The Smartest Guys in the Room (2005)

Well, it's unfortunate. That's a good call.

"Well, it's unfortunate. That's a good call."

Enron: The Smartest Guys in the Room (2005)

Jeff, as time went on,

"Jeff, as time went on,"

Enron: The Smartest Guys in the Room (2005)

had a harder time admitting things were wrong.

"had a harder time admitting things were wrong."

Enron: The Smartest Guys in the Room (2005)

And I have to believe that,

"And I have to believe that,"

Enron: The Smartest Guys in the Room (2005)

you know, when the lights went out at night,

"you know, when the lights went out at night,"

Enron: The Smartest Guys in the Room (2005)

he knew what was coming.

"he knew what was coming."

Enron: The Smartest Guys in the Room (2005)

I would liken it to the Titanic,

"I would liken it to the Titanic,"

Enron: The Smartest Guys in the Room (2005)

when you've got a captain who's saying,

"when you've got a captain who's saying,"

Enron: The Smartest Guys in the Room (2005)

'maintain full speed'

"'maintain full speed'"

Enron: The Smartest Guys in the Room (2005)

and they bump into a couple of icebergs,

"and they bump into a couple of icebergs,"

Enron: The Smartest Guys in the Room (2005)

and then they still keep full speed going.

"and then they still keep full speed going."

Enron: The Smartest Guys in the Room (2005)

The captain of this ship, Enron,

"The captain of this ship, Enron,"

Enron: The Smartest Guys in the Room (2005)

he ignored all the warning signs.

"he ignored all the warning signs."

Enron: The Smartest Guys in the Room (2005)

And there were plenty of them.

"And there were plenty of them."

Enron: The Smartest Guys in the Room (2005)

And the captain of the ship was?

"And the captain of the ship was?"

Enron: The Smartest Guys in the Room (2005)

Kenneth Lay

"Kenneth Lay"

Enron: The Smartest Guys in the Room (2005)

It was one of the bloodiest days in Wall Street history.

"It was one of the bloodiest days in Wall Street history."

Enron: The Smartest Guys in the Room (2005)

Shares plummeted thirty one percent.

"Shares plummeted thirty one percent."

Enron: The Smartest Guys in the Room (2005)

High tech stocks led Friday's fierce sell-off

"High tech stocks led Friday's fierce sell-off"

Enron: The Smartest Guys in the Room (2005)

This is really a great wake-up call.

"This is really a great wake-up call."

Enron: The Smartest Guys in the Room (2005)

Millions of nervous investors following

"Millions of nervous investors following"

Enron: The Smartest Guys in the Room (2005)

the huge drop on Friday. The Dow Jones

"the huge drop on Friday. The Dow Jones"

Enron: The Smartest Guys in the Room (2005)

Enron was especially a big deal by the end

"Enron was especially a big deal by the end"

Enron: The Smartest Guys in the Room (2005)

of the year 2000 because by then,

"of the year 2000 because by then,"

Enron: The Smartest Guys in the Room (2005)

most Internet companies had already begun to fall,

"most Internet companies had already begun to fall,"

Enron: The Smartest Guys in the Room (2005)

and everybody on Wall Street was looking for the next big thing.

"and everybody on Wall Street was looking for the next big thing."

Enron: The Smartest Guys in the Room (2005)

And here you had Enron,

"And here you had Enron,"

Enron: The Smartest Guys in the Room (2005)

which appeared to be this shining star

"which appeared to be this shining star"

Enron: The Smartest Guys in the Room (2005)

of a new-economy company.

"of a new-economy company."

Enron: The Smartest Guys in the Room (2005)

Its stock price went up 90 percent in the year 2000,

"Its stock price went up 90 percent in the year 2000,"

Enron: The Smartest Guys in the Room (2005)

and had gone up over 50 percent the year before that.

"and had gone up over 50 percent the year before that."

Enron: The Smartest Guys in the Room (2005)

It was an it' stock on Wall Street

"It was an it' stock on Wall Street"

Enron: The Smartest Guys in the Room (2005)

one of those companies that can seemingly do no wrong.

"one of those companies that can seemingly do no wrong."

Enron: The Smartest Guys in the Room (2005)

We were the poster child for the new economy.

"We were the poster child for the new economy."

Enron: The Smartest Guys in the Room (2005)

We had this culture that had a lot of focus on

"We had this culture that had a lot of focus on"

Enron: The Smartest Guys in the Room (2005)

reminding us how good we were.

"reminding us how good we were."

Enron: The Smartest Guys in the Room (2005)

And as that culture emerged,

"And as that culture emerged,"

Enron: The Smartest Guys in the Room (2005)

then we get to Fortune magazine telling us

"then we get to Fortune magazine telling us"

Enron: The Smartest Guys in the Room (2005)

we were the most innovative corporation in America.

"we were the most innovative corporation in America."

Enron: The Smartest Guys in the Room (2005)

Then we really began to feel good about ourselves.

"Then we really began to feel good about ourselves."

Enron: The Smartest Guys in the Room (2005)

Well, you all did it again.

"Well, you all did it again."

Enron: The Smartest Guys in the Room (2005)

Enron was just recently chosen, again,

"Enron was just recently chosen, again,"

Enron: The Smartest Guys in the Room (2005)

for the sixth year in a row

"for the sixth year in a row"

Enron: The Smartest Guys in the Room (2005)

in the most-admired-company survey

"in the most-admired-company survey"

Enron: The Smartest Guys in the Room (2005)

by Fortune magazine as the most innovative company in America.

"by Fortune magazine as the most innovative company in America."

Enron: The Smartest Guys in the Room (2005)

Well deserved. Well deserved.

"Well deserved. Well deserved."

Enron: The Smartest Guys in the Room (2005)

The sales pitch still sounded good.

"The sales pitch still sounded good."

Enron: The Smartest Guys in the Room (2005)

But one investor saw something in Enron's numbers

"But one investor saw something in Enron's numbers"

Enron: The Smartest Guys in the Room (2005)

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