Enron Accounting
When Enron collapsed, we heard the trouble was with off-balance-sheet liabilities that had been hidden. Today, Fannie Mae and Freddie Mac are revealed as the same thing: off-balance-sheet liabilities. Only this time, it’s government doing it.
When Enron collapsed, a few Enron executive faced criminal charges, but the main casualty was their auditors, Arthur Anderson. So who is going to face charges this time?
/me declines to mention Northern Rock or Bradford&Bingley.
Posted on July 14, 2008, in economics, USA. Bookmark the permalink. 3 Comments.
niq's soapbox 
Can you point me to the news stories you are referring to? I can’t find anything matching your description with quick Googling.
News stories? This is just the news that the fiction of Freddie Mac/Fannie Mae not being a public-sector liability is being blown up. See for example http://news.bbc.co.uk/2/hi/business/7505152.stm
Ah, right, thanks.
Though I wonder whoever it was that thought any big (and I mean *big*) bank wouldn’t be a public-sector liability. The effects of one going down would be catastrophical. I do agree that not making it official was folly.