Sunday, March 17, 2013

Market Manipulation

Market Manipulation

The day that Enron became officially bankrupt, its stock price had fallen from a high $90 in August of 2000 to a mere $0.61 in December of 2001. At one time one of the world’s largest energy companies, employing over 20,000 people, its quick downfall and unethical practices makes you think if they’re the only company doing this today. The head honchos of the company, Kenneth Lay, Jeffery Skilling, and Andrew Fasthow were all able to manipulate and hide billions of dollars’ worth of failed projects while saying that the company was continuing to grow, making sure that investors didn’t shy away.

Many people believed before this happened that Enron was one of the best run corporations in America and that’s why there was so much investment lost once they went under. Shareholders lost approximately 11 billion dollars in the collapse, and since they have barely been reimbursed any of that lost money. Those poor people, who invested their livelihoods and maybe had their retirement funds, were just taken away like that. They get nothing in return, and now have the pay the consequences of something that they had no control over.

Many other companies more recently have had the same effect on the people, the financial crisis of 2008 was because many major American companies. Companies like the Lehman Brothers and Goldman Sachs were both guilty of fraud and went bankrupt because of their malpractices when dealing with mortgages and accounting. Those companies were then required to take all the houses they owned, and they literally took the houses out of regular people’s hands and made them homeless. The people who owned the houses, or were working to pay them off now had nothing to show for it. These companies made thousands of regular people hard working people now barely on the cusp of homelessness.

It makes me think that the world we live in today is based way too much on the pyramid scheme. People at the top of that pyramid have way too much of a say and power over the regular, blue collard worker who make up the majority of the population. These companies had such a impact that it caused a depression In the economy, regardless of the industry. Way too many people were losing their jobs and its causing the government to put all its time and money into trying to fix a problem, and not into other more important things like research or education.

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