NP: How to explain Enron to your children

[Terrance]

Problem is, the people doing the explaining to the parents don't know
what the hell they are talking about. It sounds to me like they swapped
an old funny-bone for a new boner. 

"Enron Venture Capitalism - "

Venture capitalism? I don't think so. 

"You have two cows. You sell three of them to your publicly listed
company" 

Did you short a cow to a public company? If you did it ain't your
company is it? 
It's a public company and you own some stock. You're not even the
majority shareholder (see below), so calling it your company is a bit
misleading. I guess that's the point, but I get lost because the
invisible hand is being led by the blind here. 

"using letters of credit opened by your brother-in-law at the bank"

This is nepotism not capitalism and your brother-in-law doesn't open a
LOC for you. 



"then execute a debt/equity swap with an associated general offer"

Complicated stuff now, but what did you swap, equity from the public
company for debt? Or what? Why did you need a general offer? 



"so that you get all four cows back"

OK, so this is a riddle now? You got back four cows? You had two cows
and you sold three, so you were short one cow. Now you have four? Did
your brother-in-law short you  five cows or what? 

with a tax exemption for five cows. 

Sounds like he did. Or were the cows part of the general offer? 

"The milk rights of the six cows are transferred
via an intermediary to a Cayman Island company secretly owned by the
majority
shareholder who sells the rights to all seven cows back to your listed
company. "

OK, I get it now, this is not supposed to add up. But it might be funny
if it made a little more sense. The majority shareholder of what stock
in what company? I guess the majority shareholder owns the Cayman Island
company and she also owns a majority of the shares in the public company
(not your company). 

"The annual report says the company owns eight cows, with an
option on one more."

Why doesn't the AP say the company owns on pig named Arthur?