It begins with the announcement that Enron would miss its quarterly-earnings target, triggering a massive stock sell-off. This, in turn, leads to the collapse of the company’s balance sheet, because it forces the unwinding of all the off-balance-sheet vehicles that were capitalized with Enron stock, which prompts downgrades in Enron’s credit ratings, which trigger the material adverse change clauses in the company’s trading contracts, which cause its trading partners to start demanding that Enron post cash collateral, which of course it doesn’t have. All of this, in turn, wipes out Enron’s
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