Wall Street Socialists vs 4 million homeowners

…state capitalism is a term that is used…to describe a system where the state is intervening in the markets to protect and advance interests of Big Business. This practice is in sharp contrast with the ideals of free market capitalism.

This term is also used…to describe a society wherein the productive forces are owned and run by the state in a capitalist way, even if such a state calls itself socialist.

Timeline of Enron's downfall
On August 14, 2001, Jeffrey Skilling, the chief executive of Enron, a former energy consultant at McKinsey & Company who joined Enron in 1990, announced he was resigning his position after only six months. "[T]he reasons for leaving the business are personal," said Skilling at the time, "but I'd just as soon keep that private." Observers noted that in the months leading up to his exit, Skilling had sold at minimum 450,000 shares of Enron at a value of around $33 million (though he still owned over a million shares at the date of his departure). Nevertheless, Kenneth Lay, the chairman at Enron, reassured analysts by affirming that there was "[a]bsolutely no accounting issue, no trading issue, no reserve issue, no previously unknown problem issues" prompting the departure.

After the September 11, 2001 attacks, media attention shifted away from the company and its troubles; a little less than a month later Enron announced its intention to begin the process of shearing its lower-margin assets in favor of its core businesses of gas and electricity trading.

On October 22, 2001, the share price of Enron fell to $20.65, down $5.40 in one day, following the Securities and Exchange Commission's announcement that it was investigating several suspicious deals struck by Enron, pronouncing "some of the most opaque transactions with insiders ever seen".

"There is an appearance that you are hiding something"

A few days into November 2001 it became known that the Enron management had been aggressively pursuing new investment or an outright buyout. The efforts were reported to have been largely unsuccessful. Investor Warren Buffett was approached, but declined. Other overtures were made to prominent buyout firms such as Clayton, Dubilier & Rice, the Blackstone Group, and Kohlberg Kravis Roberts, all apparently fruitless efforts.

On November 19, 2001 Enron disclosed to the public further evidence of its critical state of affairs. Most pressingly that the company was facing debt repayment obligations in the range of $9 billion by the end of 2002. Such debts were "vastly in excess" of its available cash.

On November 28, 2001, Enron's two worst outcomes came true. Dynegy Inc. unilaterally disengaged from the proposed acquisition of the company and Enron's credit rating fell to junk status. The company, having very little cash with which to run its business, let alone satisfy enormous debts, imploded. Its stock price fell to $0.61 at the end of the day's trading. "Enron is now shorthand for the perfect financial storm," wrote one editorial observer.

Enron was estimated to have about $23 billion in liabilities, both debt outstanding and guaranteed loans. Citigroup and JP Morgan Chase in particular appeared to have significant amounts to lose with Enron's fall. Additionally, many of Enron's major assets were pledged to lenders in order to secure loans, throwing into doubt what if anything unsecured creditors and eventually stockholders might receive in bankruptcy proceedings.

Enron's European operations filed for bankruptcy on November 30, 2001, and it sought Chapter 11 protection in the U.S. two days later on December 2. At the time, it was the biggest bankruptcy in U.S. history, and it cost 4,000 employees their jobs.

The day that Enron filed for bankruptcy, Enron's workers were told to pack up their belongings and were given 30 minutes to vacate the building.