In an article for the born yesterday crowd, the WSJ reported without comment a statement from Credit Suisse explaining that "first-quarter earnings will be reduced by $1 billion from mismarkings and pricing errors by traders which led to the reduction in the value of some asset-backed securities by $2.85 billion."
Typically we would expect that errors are randomly distributed. Roughly half of the errors should lead to understatements of profit and half should lead to overstatements. When the errors all come out on one side in a very big way, we might suspect that the problem is something other than "errors."
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