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Fraud*
According to the Collins English Dictionary 10th Edition fraud can be defined as: "deceit, trickery, sharp practice, or breach of confidence, perpetrated for profit or to gain some unfair or dishonest advantage".[1] In the broadest sense, a fraud is an intentional deception made for personal gain or to damage another individual; the related adjective is fraudulent. The specific legal definition varies by legal jurisdiction. Fraud is a crime, and also a civil law violation. Defrauding people or entities of money or valuables is a common purpose of fraud, but there have also been fraudulent "discoveries", e.g. in science, to gain prestige rather than immediate monetary gain
*As defined in Wikipedia

Monday, May 11, 2009

Are the 'Stress Tests' bogus?

Editor's note: The Wall Street Journal questions the fairness of the stress tests as the banking wolves go for each others throats.

Goldman Test Stresses Rival Morgan
By PETER EAVIS

Why did the stress tests treat Goldman Sachs Group better than Morgan Stanley?

In the worst-case scenario used to determine bank capital needs, the government posits that Goldman might be 2½ times as profitable as its main rival this year and next.

...

Were the tests' assumptions "stacked in Goldman Sachs's favor?" asks Michael Hecht at JMP Securities...

Editor's note: I don't know if the 'tests' were stacked in Goldman Sachs's favor but it appears the wolves are at each others throats. When Merrill's economist David Rosenberg left the firm on May 8, he described the recent run-up in stock prices as a sucker's rally.


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Posted by RobertM

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