Enronomics

A kind of jokey term (for a not really jokey circumstance) used to describe the accounting tricks executives at Enron used to disguise losses at the company...at least until they were forced to take a massive write down, a move that triggered an eventual bankruptcy and criminal charges.

This all happened back in 2001. Enron was an energy trading firm that seemed like a high-flying harbinger of a new kind of company.

However, it turned out that executives were using a series of accounting maneuvers to make the firm's income statements and balance sheet look better than they actually were.

A common trick was creating subsidiaries and associate companies, and then cooking up paper-only transactions with these new entities. No actual money changed hands, and there was no real economic benefit. The companies only existed to become parties to these paper deals. But by shifting numbers from one column to another, the company was able to make its books look better to investors. That's Enronomics.