If it's legal, is it cheating?

[ebacon]

Pete's comment made me laugh. Here's another one from the "if it's legal, is it cheating" file.

Imagine this situation. Is it cheating?

Company A is in a bad financial situation. They have a financial audit coming up and need to get some loser deals off their books.

They call Company B and say hey, we are between a rock and hard spot. If we fail our audit then the interest rate increases on our loans. Do you happen to have some good assets you can loan us for a while? Company B does have some good assets in their portfolio and agrees to swap them for Company A's bad assets plus a fee. They also agree to swap the assets back after the audit.

Company A passes the audit and gets a good rating because of the assets they rented from Company B. They use the good rating to borrow more money and pay their executives bonuses for doing a great job. Afterwards they swap the good assets back to Company B as agreed. The economy then turns down slightly and Company A's bad assets tank. They are forced into bankruptcy and the bank that made the last loan gets nothing.

You are the CEO of the bank. Do you feel cheated?

You are CEO Company B and want to keep your fee for loaning the good assets to Company A. If the bankruptcy judge clawed back your fee would you feel cheated?

You are Ayn Rand and don't believe feelings have a role in business. You invested in Company A after a rational analysis of their SEC filings including their Annual Report. Despite that effort you lose all of your investment in Company A. Do you feel cheated?