Daniel Dolan aloha

US and Japan Markets Dive

The day after a $700 billion economic rescue package failed in the U.S. House of Representatives on Monday, September 29, markets around the world dove steeply. In the United States, the Dow fell 777 points, and the Nikkei in Japan fell 4.1% to a three-year low.

The graph at right shows the Nikkei's fall. Too small to read, but the vertical line tells the story.

Markets in the United States open within the next hour, and the world will be watching and hoping for both a successfully passed economic package and increased investor confidence.

 

Enron Convictions: as Certain as Rain in Seattle

Finally, an end in sight for the Enron mess. Today in Houston Ken Lay and Jeffrey Skilling were convicted on most of the counts they faced, including:

* securities fraud
* wire fraud
* conspiracy to commit securities and wire fraud
* bank fraud
* making false statements to auditors (Skilling)
* making false statements to banks
* insider trading (Skilling--one count)

Legal analysts predict prison sentences of between 12 and 25 years for the men. Sentencing is scheduled for September 11 (a coincidence?)

These convictions were a sure thing. Lay's "know nothing" defense was doomed from the start--WorldCom's former CEO Bernard Ebbers tried the same strategy, and he landed in prison for 25 years.

Shareholders (and juries) are insisting on accountability by senior executives since the landslide of corporate scandals beginning in 2002, and this sentiment is backed up by Sarbanes-Oxley regulations.

As I have pointed out in earlier commentaries, whether prison sentences make sense for corporate crimes is an important question. But the convictions of Lay and Skilling are necessary and right.