Did the auditors do their sums?

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Tynegwick Gawcott is a new blogger. He (for I know it is a he) will be one to watch. In his first blog he says:

John Kay, (www.johnkay.com) who was a director of Halifax at the time of privatisation, makes the astute observation that financial engineering is a zero sum game. If you added up the value of all the CDOs and credit derivatives (look 'em up in Wikipedia), they should have come to no more than the value of the underlying securities. Did any of the auditors blithely putting their names to the accounts of financial institutions ever do a ballpark check?

You can be they didn't Tynegwick.