The Berkowitz "Victories"

1. While completely avoiding addressing any of the 28 charges against Skilling, Sean Berkowitz did reveal that Skilling had invested more than he originally thought in a photo shop. How much was this error? Less than .002% of Skilling's net worth. Maybe Seanie should be an accountant instead of a lawyer, such attention to detail!

2. As the WSJ and Houston Chronicle Blogs covering the trial breathlessly reported, Skilling lost his temper on the stand when Berkowitz tried to classify preliminary earnings estimates as evidence of accounting fraud. In other words, if figures change from initial estimate to audit it's because of fraud. A line of reasoning that would put every public company on the planet in trouble. This deliberate misrepresentation clearly got to Skilling but is anyone convinced that its evidence of fraud? Berkowitz caused Skilling to lose his temper but so far has not advanced his case. If the best Seanie can do is this ham fisted manipulation, then Lay can rest easy and we can remain short.

Berkowitz hasn't advanced beyond words games and deception to make his case, but with 28 charges he might not have to for us to get payoff. At some point he should try and incorporate some evidence. The contract still has not moved. I am still long Skilling, Short Lay.