The title says is all – it was a busy, diverse and I should say depressing day! Correction – the topics were depressing.
More learned, accomplished and dynamic presenters today.
To start off, we had a case which discussed the Fall of Enron – infuriating topic to discuss, given the creative financial ‘engineering’ applied by Skilling, Lay and Fastow – all crooks in my judgement. Little did I know at the time of the class that I will get another dose of Financial Engineering later in the day from none other than Paul Volcker (Economic Recovery Advisor to President Obama and Ex-Chaiman of the Fed Reserve). Lynn Paine (the professor) creatively navigated the discussion from beating up on Skilling & Lay to the responsibility of the Board of Directors of a company. There was much debate on that. My buddy Kevin has a vision of being on the board of 4 -5 companies by the time he retires. My advice to him – be careful Kevin, being a board member comes with its responsibilities!
I had missed looking at the case author – Prof. Krishna Palepu is one of the authors of this case. In case you didn’t know Prof. Palepu was on the board of Satyam which went down in flames in Jan 2009 in what was a ‘spectacular’ fraud – the biggest in India.
Prof. Palepu – humbly request you to take this piece of advice – Please remove the snide remark about the ‘Stanford University accounting professor being a board member of Enron’ out of the case.
The next case was about FBI and we had Phil Mudd, Deputy Head of FBI’s National Security branch in class with us. The focus of the discussion of reorganization of FBI post the events of 9/11. The case talks about the events and the discouraging lack of inter and intra agency collaboration and sharing of information. While Mr. Mudd provided his views on the progress since 9/11/2001, I feel there still is confusion of responsibilities between FBI, CIA and the Department of Homeland Security. Mr. Mudd comes from the CIA and has been with the FBI for 49 months. Phil was energetic and entertaining.
The speaker in the afternoon was Robert Mueller, the Director of the FBI. Very impressive! I will not post pictures of Mr. Mueller but you see Mr. Mudd in the picture here.
The last speaker was over at the Kennedy School of Government – Paul Volcker – He is 6’7″, 82 year old gentleman and serves as the Chair of the President’s Economic Recovery Advisory Board. He was also the Chairman of the US Federal Reserve Board between 1979 and 1987.
In Mr. Volcker’s view, the words Financial & Engineering don’t go together. There should not be any Financial Engineering! He also mentioned ‘The Banks used to have a credit department’. He went on to explain the crisis in his own words. While he did have a lot to offer, he left me with an impression that we are far from a solution to this financial crisis….