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The Collapse of Enron To everyone Enron was the new booming develop with, which everyone wanted to be a part of. The super high profits and the publicity of fair(a) how much Enron was prospering, kept everyone interested and wanting to know more. Eventually, the company that seemed too good to be true proved that is was barely that, just too good to be true. When Enron began to collapse, billions of dollars were lost as were thousands of jobs. The only question left to answer was what exactly went wrong with Enron? When Enron was born because of the merger of Houston Natural Gas and InterNorth, Enron incurred massive debt, and because of deregulation, they no longer had the rights to their pipelines. In identify for the company to survive, they would have to come up with a new business dodge that could befriend generate big profits and get the cash flowing. The chief executive officer Kenneth reside then hired McKinsey & Co to help with create the new strategy. McKinsey & Co. assigned Jeffrey Skilling, a young consultant, to the task.

His new strategy was for Enron to buy gas from a network of suppliers and sell it to a network of consumers, contractually guaranteeing both the supply and the price, charging fees for the transactions and assumptive the associated risks, this eventually created both a new product and a new paradigm for the industry known as the zip fastener derivative (Thomas). Skilling impressed Lay so much that Lay created a new division in 1990, that he called Enron pay Corp. and who did he hire to run it, no one another(prenominal) than Skilling of course. Skilling turned Enron Finance Corp. into a dominating powerhouse that allowed Enron to ring future prices with accuracy, which projected super high profits. Skilling took the opportunity with no hesitation and began to hire the best traders by recruiting people from the cover charge MBA schools in the country and competing with investment banks for talented representatives. One of Skillings first hires was Andrew Fastow, who was...

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