
Date: Tue, 29 Jun 1999 08:33:00 -0700 (PDT)
From: christian.yoder@enron.com
To: tim.belden@enron.com, elizabeth.sager@enron.com, richard.sanders@enron.com,
mary.hain@enron.com
Subject: Cal PX

Attorney Client Privilege--Not Discoverable

Here is a final thought about this PX situation before I take off.  In the
normal give and take of haggling that has been going on since time out of
mind in trading transactions, there is an element of deception.  The seller
always bluffs that his product is much more valuable than it actually may be,
in fact, the less valuable the product, the more the bluffing.  The buyer
always treats the seller's product with disdain.  It is fundamentally
necessary for an efficient market to work for buyers and sellers to be able
to string each other along  with various  posturing gambits.  Price is the
result of two hagglers finally coming forward out of the smoke surrounding
their ritual dance  and shaking hands on a number.  By experimenting with the
nuances of the PX software system  are traders not  merely doing what they
have been doing since Biblical times,   i.e.  interjecting the absolutely
essential ingredient of deceptive posturing  into the relatively new form of
electronic commerce?

What is the difference between  (a) one of our traders getting on the phone
when we are short of power and bargaining for a good price  with a supply
source  as though we have plenty of power and might just be willing to help
the supplier out if he gives us a good deal,  and  (b) scheduling 3000 mw at
Silver Peak when there is  15 mw of physical  capacity?  If the technology of
electronic commerce cannot absorb the artful rituals of  real haggling, maybe
it should be seen as a temporary experiment and rejected in favor of the time
honored traditions.  In any event, participants should not be expected to be
punished for experimenting.   --cgy
