Enron #2

1. How does a Special-Purpose Entity (S.P.E.) work? Why does the "partnership" giving money to your company make a big difference?
A partnership holds a company's leases and borrows money from the bank at a much lower interest rate than the bank would charge the company who's not doing so well if they were to borrow all that money from the bank, then the partnership gives the company the money. This makes a big difference because by the "partnership" giving you the money but paying the interest, much less money is lost to interest (since if you were receiving the money directly, you would be paying a lot higher interest).

2. How did Enron pit "twists into the S.P.E. game?" What does it mean that Enron "didn't always put blue-chip assets into the partnerships"? What was problematic about Enron using its own executives to manage the S.P.E? What was Enron's guarantee?
Enron twisted the "game" by selling "less than sterling assets" and sometimes even selling them to insiders instead of outsiders (so that the property and money was actually staying right within the company). By that phrase, it means that Enron sometimes sold off leases that would not necessarily reliably generate income. What was problematic about Enron using its own executives to manage the S.P.E. was that not only were they receiving all the money from the deal, but the leases were not even in more stable hands than those of Enron (they were still in Enron's hands essentially, so the bank should have still been charging that higher interest). Enron's guarantee was that "if whatever they had to sell declined in value, Enron would make up the difference with its own stock." so in essence they were selling parts of itself, to itself.

3. How did the world come to learn of Enron's use of S.P.E.'s? Is Gladwell correct in claiming that this is another example of a mystery? Explain.
The article says "The public became aware of the nature of these S.P.E.s through the reporting of several of Weil's colleagues at the Wall Street Journal—principally John Emshwiller and Rebecca —starting in the late summer of 2001." And it says they were tipped off the same way as Weil, by reading Enron's own public files.
I think Gladwell is correct in his claim that it's a mystery rather than a puzzle because it wasn't simply that the directors/investors didn't KNOW all the information - much of it was right there for them, but it was so much, so detailed, and so confusing that they couldn't understand it.

4. What is the difference between "scrounged up" and "downloaded?"
"Scrounged up" sounds like much more work had to be done to find these documents that were carefully hidden and covered up by Enron, when the reality is that Enron had these documents in public, all that had to be done to read them was to download them. This is using emotive langauge to make it sound like Enron was trying to hide everything.

5. Why does Gladwell claim that "It scarcely would have helped investors if Enron had made all three million pages public."? Explain what Gladwell means when he says, "But here the rules seem different." Who is Andrew Fastow?
He claims that because who can/will read 3 million pages of confusing S.P.E. info?? Nobody could read that much and digest it enough to understand it and draw an accurate conclusion. By saying the rules are indifferent in this case Gladwell means that the rule of puzzles- the more pieces that are added, the clearer the picture becomes- does not apply here because the more information revealed about the S.P.E.s, the more detailed, complicated, and confusing the situation gets.
Andrew Fastow was Enron's chief financial officer who put together the S.P.E. deals.

6. Why has the "Disclosure Paradigm" become an anachronism?
The idea that the more business information revealed to the public, the better off it is, is no longer correct in this time period because many business transactions, such as Enron's with the S.P.E.s, are so complicated and detailed that the more information included just makes it more confusing and less understandable to the public, so the public would probabaly have a better understanding of what was really going on with just a summary or something.

7. Why did treating the German secret weapon as a mystery prove to be more useful? Specifically, how did the "propaganda analysts" (the batty geniuses) use reason to uncover the Nazi V-1 Rocket?
If they had treated it like a puzzle and been like, "We don't have enough information and we can't really get it" they probably would not have figured it out, but since they treated it like a mystery and like all the information was already there, in the broadcasts, they focused on translating that information and were then able to understand what the Germans were doing/going to do. They used reasoning by listening to the broadcasts to the German people and reasoning that since the German leaders would try to keep the trust of the people, they weren't really lying, and when there was a 10 day period during which the weapon was no longer mentioned, that must mean that there was a delay in development and afterwards, less certainty...

8. How has diagnosing Prostate Cancer transformed from a puzzle to a mystery?
Doctors used to wait for the "missing puzzle piece", the symptoms that would show that the pacient had prostate cancer, the lumps on the gland... But now doctors don't wait for the missing piece/symptoms, the regularly test and examine middle-aged men, but sometimes whether the patient actually has the cancer remains a mystery because sometimes the test results are inconclusive, or the doctors don't agree, or one thing could mean something else, etc.

9. Following the fall of the Soviet Union, how has "the situation facing the intelligence community has turned upside down?"
It says "Now most of the world is open, not closed. Intelligence officers aren't dependent on scraps from spies... In a post-Cold War world of "openly available information," Inman said, "what you need are observers with language ability, with understanding of the religions, cultures of the countries they're observing." Inman thought we needed fewer spies and more slightly batty geniuses."
The situation has changed from a puzzle with not enough pieces to almost a puzzle with too many pieces, so that investigators have lots of information but it is difficult to put it together correctly and come to a conclusion.

10. How does Admiral Bobby R. Inman believe the U.S. should strengthen the U.S. intelligence system? Why was his answer seen as unusual?
His answer was that they should revive the State Department. This was seen as unusual because the State Department was "the one part of the U.S. foreign-policy establishment that isn't considered to be in the intelligence business at all."

11. Gladwell writes: In a post-Cold War world of "openly available information," Inman said, "what you need are observers with language ability, with understanding of the religions, cultures of the countries they're observing." Inman thought we needed fewer spies and more slightly batty geniuses.

Does this curriculum sound familiar?
I know what Inman means, that what they need is not more information or more people to find the information, what they need is more equipped interpreters of the information they already have. They need professionals to solve mysteries, not a bunch of little kids to solve puzzles.
However, I don't specifically remember anyone else having this theory...