FTX: Worse Than Enron!

The new chief executive of FTX, an insolvency professional who oversaw the liquidation of Enron, has said that the bankruptcy of the crypto group is the worst case of corporate failure he has seen in more than 40 years.

John Ray III, who was appointed to run the FTX bankruptcy, said in a US court filing that he had never seen “such a complete failure of corporate controls and such a complete absence of trustworthy financial information”.

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[PBoyle]

Sign up for Blinkist using this link: blinkist.com/patrickboyle

[nappiral]

I know this isn't technically a comedy channel and yet somehow Patrick never ceases to be hilarious.

[senpaihorse]

Id pay top dollar to see Patrick do a financial stand up show, would absolutely kill it

[janzalud]

Transition of this channel from full finance to full finance full comedy channel is complete. Im rewatching this as much as dave chapelle

[davidroberts]

What happens when neophytes and ideologues are let loose. I can speak about Enron. I worked as a freight trader for one of the biggest commodity trading firms in the world back in the 1990's / 2000's and my wife's father was very high up in the Enron heirarchy. His was an interesting story. Like me, he was from Liverpool in the UK, and he was a plumber by trade. Back in the 1960's when oil and gas was being developed in the North Sea, there was very good money for skilled workers that were willing to put up with the conditions of life on a rig in force 10 storms. He worked his way up the chain, with Houston Oil and Gas, merged with Portland oil and Gas and ultimately became Enron. In those 30 odd years he'd become head of projects and had built pipelines, dams and power stations all over the world. At this time he was head of what was to be a famously doomed power plant in India. In 2000, Enron were looking to develop their London office, and had a rec for somebody to set up their power-traduing desk. My father in law, who was very influential by now in Enron, suggested I go for it. At the time we lived in Paris, and so I took the Eurostar to London for the first of my interviews. They worked on a black ball system, like Goldman Sachs did at the time. You spent time with a variety of departmental heads and they each had to give you a white ball in order to be invited back for the next round. I got through six rounds and now I was facing my final interview. I should say that their offices were on Buckingham Palace Road. A fabulous glass thing with a huge atrium. We took the lift to the 8th floor, and I could see floor after floor of empty desks and spaces, until we arrived on the 8th, and all hell was let loose. Everyone was charging everywhere, hotdesking and whatever buzz thing was the motif at the time. I felt somewhat senior, and I was 32 years old. I met the managing director, Danny McCartney, from Houston head office. I'd say he was about 27. he asked me these questions. ' How many people live in the London power utilities region? / So how many utility bills is that? / What do you reckon the average utility bill is? / How old is the power infrastructure in London." Then he said, that there was no power-trading position anymore but that they wanted me to head up "deal-origination" - ie sales. So here was the plan. Enron would build a whole new suite of power generation facilities, along with grid access and all associated step down facilities to replace the ageing infrastructure that dated back to the 1930's. London couldn't afford the price, and so we would securitise ten years worth of utility bills and ship 'em off to our mates at JP Morgan, who would then issue notes on the back of this security and sell them to Mars, and then they would send the Martian money back to us at Enron, and we would then lend it to the London Electricity Board who would then spend it on us to build their beautiful new energy system. At the time ENE shares were at about $80 a piece. I listened to this Bullshit but kept my thoughts to myself, I declined the job and took the next Eurostar back to Paris. One of my clients was a very large Greek oil tanker fleet operator and he called whilst I was on the train. he knew what I was doing and was curious to hear how I'd got on. I told him the story of the LEB / ENE / JPM / Mars perpeptual motion machine bonds and he asked me to check what the borrowing cost was for ENE stock. He was going to short it. Big style. I contacted my father in law, and suggested he begin to liquidate his positions in ENE stock and options. He was only about a year from retirement and he probably had millions in there now. He'd been with the firm in one form or another since he was a boy. He laughed in my face. Enron stock only goes up. It had just been voted Forbes company of the year for the 5th consecutive time. It had someting like the 6th largest mkt capitalisation on the NYSE. My friends shorted ENE about a week before Jeff Skilling stepped down - at about $80 / share. By the end of ther year, 6 months or so later, ENE was gone, along with Arthur Anderson. My friend made about 80 million dollars. My father in Law lost everything, and had to go back to work building pipelines in ALberta, and even in the Baghdad Green Zone repairing pipes etc damaged by the war. It\s a shaggy dog way of describing youthful hubris, and a negligent approach to correct procedures and appreciation of risks. In retrospect, the signs are always, ALWAYS there to be seen.

[Karearearea]

I know FTX collapsing is a huge tragedy for everyone who lost money, but god I love the entertainment we're getting out of it

[yomodojo]

Your sense of humour; please, please, please keep on infusing it in to your work, Patrick. Thank you for making this for us. Best wishes.

[joetrease]

“The whole sultry wood nymph situation…” 😂😂😂
Love your humor, and your content PB! Thank you!

[heyquantboy]

I love Patrick Boyle's understated humor.

[nicedubs]

Excellent coverage on this attrocious scheme. I'm an accountant, and I noticed long ago that a surprising amount of novice "investors" have a surprising amount of ignorance over general finance concepts as well as a lack of business accumen.

[morganshook]

As a New Balance wearing wood nympho I take my hat off to you sir. Haven't laughed that hard in a while. Cheers!

[jonathansmith]

Patrick!!! The last 2 videos may have been the greatest ever in 10 years. Thanks for bringing a smile to a fantastic finance video! I’ve never laughed so much. Thank you

[chriswhitenack]

This is a thing of beauty. As I'm sure Patrick knows, nobody can make this kind of thing up. Pure gold!

[YouTubeGlobalAdminstrator]

I'm so happy when some financial turmoil happens as it means Patrick is going to make some hilarious content. 👌

[Boondoggle_Mollywop]

Your wit and quirky sense of humor are exactly what keeps an otherwise disinterested fool like me sticking around to learn all this valuable economic information.

Thank you for helping me to better educate myself against my normal sensibilities. I appreciate your content very much.

[hazeldavis]

I have to imagine the investor meeting went something like: "Oh wow this kid is cool. He plays video games, he has cool lingo, he is young and hip. I will also be young and hip! Look at how cool I am I know what a video game is! Take this money and please think that I am cool, too!"

[arrowknee]

Informative and funnier then most stand up comedians. Well done, well done.

[chrisnln]

My hat is off to you sir. Your delightful combination of Sahara-dry, deadpan delivery of comedy disguised as economics commentary is sublime.

[AbdulRWatches]

Satirical financial Videos should be a thing Patrick offers us more often 😁 Thanks Prof 👍🏽

[sampotter]

Were any wood nymphs, sultry or otherwise, ever discovered at Enron?
Great story and entertaining storytelling! More please.