- How does a Special-Purpose Entity (S.P.E.) work? Why does the "partnership" giving money to your company make a big difference?
Special-Purpose Entity is when a company needs to borrow money, but does not want to do so because of the high interests rates a bank will put on the loans. However, if you have leases on some product that are sure to raise the amount you need of the next few years you can give them over to the SPE that has been set up with outside investors. This way the bank will lend you the money with a lower interest rate and the partnerships you have created will gain you money also.
2. How did Enron pit "twists into the S.P.E. game?" What does it mean that Enron "didn't always put blue-chip assets into the partnerships"? What was problematic about Enron using its own executives to manage the S.P.E? What was Enron's guarantee?
Enron put many different twists in the SPE game, or did things that went against what it was supposed to be used for. When Gladwell says that Enron “didn’t always put the blue-chip assets into the partnerships” he means that Enron would put in leases that may not reliably create income, or it would not always sell them to outsiders but to executives in its own company. Enron would then pay back something if it had declined in value in stocks, so it was paying itself back with itself, which is extremely problematic.
3. How did the world come to learn of Enron's use of S.P.E.'s? Is Gladwell correct in claiming that this is another example of a mystery? Explain.
The world came to learn about Enrons use of SPE’s from the reports of Weil’s colleagues at the Wall Street Journal. They found all of this out by reading what had been published in Enron’s public filings. This is defiantly another example of a mystery because all of the information was right there to be analyzed but it just doesn’t come together cleanly.
4. What is the difference between "scrounged up" and "downloaded?"
The word downloaded means simply to obtain with out to much struggle (on the internet), Scrounged up however seems to imply that he had to dig around through some sources before actually reaching it.
5. Why does Gladwell claim that "It scarcely would have helped investors if Enron had made all three million pages public."? Explain what Gladwell means when he says, "But here the rules seem different." Who is Andrew Fastow?
Gladwell says that "It scarcely would have helped investors if Enron had made all three million pages public.” Because he is stating that if they had realsed all of these documents it wouldn’t have really helped anyone. When the finest legal talent in the nation tried to summarize it all they made two hundred highly complicated pages that would have done little good to investors because of its complexity. When Gladwell says "But here the rules seem different." He means with each piece of evidence that is given about Enron the puzzle only seems to get bigger. Andrew Fastow was Enron’s chief fincial officer and he didn’t fully understand the implications of the deals.
6. Why has he "Disclosure Paradigm" become an anachronism?
It has become an anachronism because now a days the more complexity a company has the more it tells us about its business.
7. Why did treating the German secret weapon as a mystery prove to be more useful? Specifically, how did the "propaganda analysts" (the batty geniuses) use reason to uncover the Nazi V-1 Rocket?
By treating it like a mystery they stopped looking for puzzle pieces and in turn just went into further analysis of what they already had. The propaganda analysts studied Nazi propaganda and used repeating patterns in their propaganda to figure out what was true and what wasn’t. They learned from the German U-boats that Goebbels would not lie about something to his people that he was using to boast morale, so they came to the conclusion that there was a secret weapon. They then used the tone of the Germans when taking about it and the amount that it was talked about to figure out the expected date for it to be done.
8. How has diagnosing Prostate Cancer transformed from a puzzle to a mystery?
It used to be a puzzle because doctors would just simply look for the symptoms. However now doctors try to catch the disease before symptoms occur. They look for things that have a possibility of becoming Prostate Cancer, but do not necessarily mean you have or could have the cancer. Not only do different doctors agree and disagree on the signs but they also agree and disagree on the benefits of treatment.
9. Following the fall of the Soviet Union, how has "the situation facing the intelligence community has turned upside down?"
The worlds information has become less closed and more open, creating more mysteries and less puzzles. The need for spies is less but there is a huge demand for greater analysis and problem solvers to figure out things from the information already given.
10. How does Admiral Bobby R. Inman believe the U.S. should strengthen the U.S. intelligence system? Why was his answer seen as unusual?
His answer was unusual because most people think that the more spies and information you have the better off you are. However he thinks that we just need more people who understand the culture of what we are looking into, and then they will be able to solve the mysteries better.
11. Gladwell writes: In a post-Cold War world of "openly available information," Inman said, "what you need are observers with language ability, with understanding of the religions, cultures of the countries they're observing." Inman thought we needed fewer spies and more slightly batty geniuses. Does this curriculum sound familiar?
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