Remora

"...headlong themselves they threw
Down from the verge of Heaven: eternal wrauth 865
Burnt after them to the bottomless pit.
�Hell heard the unsufferable noise; Hell saw
Heaven ruining from Heaven, and would have fled
Affrighted; but strict Fate had cast too deep
Her dark foundations, and too fast had bound. 870
Nine days they fell; confounded Chaos roared,
And felt tenfold confusion in their fall
Through his wild Anarchy; so huge a rout
Incumbered him with ruin. Hell at last,
Yawning, received them whole, and on them closed� 875
Hell, their fit habitation, fraught with fire
Unquenchable, the house of woe and pain.
Disburdened Heaven rejoiced, and soon repaired
Her mural breach, returning whence it rowled."


Which is how John Milton described the fall of Enron. Less cosmically, the NYT describes the tenfold confusion in Houston in this way:

"Enron's swift collapse left the prospects of 21,000 employees in doubt and wiped out what was left of the holdings of stock investors, including some big mutual funds, as shares that sold for $90 in August 2000 crashed to close yesterday at 61 cents. It roiled the Treasury market and tarnished the standing of the big New York banks that both advised on the deal and poured their own cash into the company. And it left in tatters the reputation of Enron's chief executive, Kenneth L. Lay, a confidant and campaign backer of President George W. Bush.

The Treasury Department, the Federal Reserve and the Federal Energy Regulatory Commission said they had monitored Enron's impact on the financial and energy markets yesterday; officials who would comment said they saw no dangerous ripple effect."

CNN commentator Mike Sivy has already drawn the Lessons of Enron -- although a year ago the teaching and the prophets and the very constellations in the sky were differently disposed. Here's Sivy's sense of the fall:

"First, let's just take a moment of silence to register the sheer scale of the Enron disaster. $85 to 65 cents in less than a year. That's like something from a television sitcom. Even more incredible, there were a fair number of analysts recommending the stock even after it was down 95 percent. One poor fellow actually downgraded the stock from "strong buy" to "hold" on Wednesday. And top mutual fund companies, such as Janus, were major shareholders as recently as the end of the third quarter."

Well, at Limited Inc we are mere peasants, but we still wonder how, given that we are seeing the largest bankruptcy in history -- one that is being aggravated by the inability of Satan, or in this case Ken Lay, to bend his knee to that great divinity, arithmatic - we wonder how that disaster concords with the Treasury department, the Federal Reserve, and the FERC conclusion that the market will soon repair her mural breach, and we'll all be able to turn our lonely eyes to Saddam Hussein or similar villains while driving our SUVs to the mall for Christmas. Hmm. Something seems out of focus in this picture. Are these the same guys who're investigating the anthrax letters?

We are reminded of the doings of 1901. A hundred years ago, James Hill discovered that his company, the Northern Pacific Railroad, was being bought out from under him by his deadly rival, Edward Harriman. Hill's ally, J.P. Morgan, directed a counter-strategy, but the share of stock available, by the time battle was joined, was not great. Now, the battle attracted a lot of short sellers, who pledged, as short sellers do, to sell stock they didn't yet possess. They were betting, of course, that Northern Pacific Stock would go down, do that they could make a handy profit on the spread between the price they sold for and the price they bought for. But here's what happened. The price, on May 9, went up. It opened at 320, then it went up to 700, then 1000. Shorts were ruined, of course, and having to liquidate their other assets, other stocks fell sharply. At the end of the day, Northern Pacific fell 675 from its high when the brokers basically stopped the battle between Harriman and Hill and put some stock on the block. The panic in the markets, caused by, basically, a shark fight, stimulated public revulsion of a kind that made regulation of the market politically possible.

As for what will happen now that Enron lies in ruins, and commentators near and far assure us that there was nothing wrong with the model ("energy de-regulation now, energy de-regulation forever" is the motto of these stalwarts), well it depends on whether anybody is paying attention as our gov picks gingerly through the bones.