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Inefficient markets

Corporate eugenics

Corporate eugenics

It is becoming clear that corruption at Enron was not confined to the higher echelons, but was widespread throughout the firm. This corruption appears to have been engendered by a combination of overly-demanding profits targets and management’s practice of weeding out supposedly “under-achieving” employees. Such practices have become commonplace among America’s top companies. In Enron’s case it seems that the crooks cooked up the profits, while the honest objectors were let go.

During the late bull market, companies which wished to receive the highest rating on Wall Street aimed to produce steady earnings growth of 15 per cent…

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