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The Control Fraud Theory | Bizcovering
Control fraud theory poses a fundamental challenge to the core models of finance and economics. The efficient markets (and contracts) hypothesis requires that markets be able to identify and exclude control frauds, and the dominant law and economics model asserts that they do so effectively and quickly. This claim is largely premised on the view that no top-tier audit firm would give a clean opinion to a control fraud. Control frauds have consistently falsified this claim. Deposit insurance was not the key to S&L control fraud. Control frauds deceive "creditors at risk." High reported profits allow them to grow rapidly by borrowing and issuing stock.
This also will not be learned as "the core models of finance and economics" appear to have come out of the crisis unscathed, at least as far as the core community of financiers and economists is concerned.

Economics is politics by other means
by Migeru (migeru at eurotrib dot com) on Mon Apr 25th, 2011 at 04:45:42 AM EST

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