Nominally you can do whatever you want, that it solves anything is another question. And in fact, they've been printing money for over a decade and things have only gotten worse. The Enron balance sheet could handle a lot too.
Not really their liability is basically the present value of the future which is indeterminate, not null. If the future pain is greater than the present value, or billions printed, then they printed too much, otherwise it was worth it.
You can’t really know for sure if it’s worth it now though.
Well, that's the thing, they don't _have_ to correct. Look at Enron. They were huge and I can clearly remember people buying in post revelations saying: "oh it's going to come back".
Well now that's the real problem, they don't. They will face no real consequences for this. In fact they will probably fight hard to ensure they can keep making money, no matter the problems, right up until the day their own math says they need to flip the script.
Scott's point is that Enron was a giant, long-established public company. Sarbox may have helped prevent the next Enron, with an unanticipated side effect of all but killing IPOs and growth in the public market. It's like passing a law to prevent the next giant cruise ship from hitting an iceberg, and accidentally killing rowboats in the process.
Aren't they already? That's still not much of a consequence. If anything happens, it'll be years from now, which is totally out of scope for quarterly profit management.
Nope, that's just treating a symptom; they'd just immediately break the market again and that's putting aside the point that they own your politicians and simply wouldn't allow you to fix it. Until you deal with severe wealth accumulation, nothing else matters and yes it is actionable. The French lopped off a few heads, it worked.
It's an improvement, but not much of one. If the best you can figure out in hindsight is a way to only lose $2 or $3 billion dollars, you're not trying hard enough.
I'm still confused as to exactly what problem he thinks he's solving here. That one-off weird glitch that happened for the first time in history yesterday and will probably never happen again? Or perhaps just sticking a few billion dollars extra into the gaping maw of the US Treasury?
And at what cost? Driving businesses out of the US? Severely lowering the attractiveness of listing a company on the US stock exchange? A billion other unforeseen consequences which neither I nor he is smart enough to see?
I don't think that it is a solvable problem if the economics stay the same.
SolarWinds is actually trading almost $2/share more than it did 1 year ago today ($15.67 v $17.23). Sure, it is down from its 52 week high ($24.34).
I would argue that SolarWinds should not be allowed to be in business in its current form, considering what a threat they have been to themselves and others in their mis-handling their software practices and subsequent breach. If an individual did what they did as an employee of the government, they would currently be in jail.
It is probably one of the most impactful national security events in our lifetimes and the impact of this event will be felt in certain areas for years or even decades.
No it wouldn't have. The company would still be solvent and have a large number of total deposits, just less in total than they could've had otherwise. What they did literally destroyed the entire company; not doing so would not have had that result. The outcomes are not comparable.
Generally not, but there will always be someone (next in line) who is responsible for the overall risk management. I think the problem was, once they discovered this mess, there wasn't a whole lot they could do, with rates going up. They could have booked several billion dollar loss early on, but instead, they decided to wait it out.
Enron profited from the 2000s crisis due to government regulation demanding energy distributors purchase energy at an unsustainable rate. This is documented in the "Effects of partial deregulation" heading and in the lede.
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