Excellent quote.
JP Morgan and Citygroup are now also deep in the smelly brown stuff -
they have admitted to selling the same Enron financing scam (a pre-pay
trade arrangement which hid debts and losses off balance-sheet) to a
number of other US corporates.
-----Original Message-----
From: For teachers and lecturers interested in curriculum issues
affecting the te [mailto:[log in to unmask]] On
Behalf Of Chris Rodda
Sent: 24 July 2002 13:18
To: [log in to unmask]
Subject: Re: How to Fail as a Board of Directors - Lesson 1
Jim - well there is nothing new under the sun. The leveraged support of
stock markets works in reverse too as I see the insurance companies are
in
problems today Morgan Stanley are being investigated.
On my recommended list of reading to students is The Great Crash - by
Galbraith.
My favourite quote comes from a senate committee meeting (1932)
investigating a bank. The bank was running a company, that invested in
shares, bought by people who borrowed the money from the same bank. It
goes;
SENATOR COUZENS: Did Goldman, Sachs and Company organize the Goldman
Sachs
Trading Corporation?
MR SACHS: Yes, Sir.
SENATOR COUZENS: And it sold its stock to the public?
MR SACHS: A portion of it. The firms invested originally in ten per cent
of
the entire issue for the sum of $10,000,000.
SENATOR COUZENS:And the other 90 percent was sold to the public?
MR SACHS: Yes, Sir.
SENATOR COUZENS: At what Price?
MR SACHS: At 104. That is the old stock....the stock was split two for
one.
SENATOR COUZENS: And what is the price of the stock now?
MR SACHS: Approximately 1.75
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