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  • Federal Reserve Moral Hazard Smoking Gun: Goldman Was Willing To Tear Up AIG Derivative Contracts

    01/26/2010 4:45:12 AM PST · by mikelike · 19 replies · 665+ views
    Zero Hedge ^ | 1/25/10 | Tyler Durden
    {snip} In tonight's Heard On The Street section, the WSJ notes: As everybody knows, AIG got a huge government bailout in September 2008 to help make payments on derivatives contracts with banks, including Goldman. Yet in the previous month, Goldman approached AIG about "tearing up" its contracts, according to a November 2008 analysis by BlackRock, then an adviser to the New York Fed. So was Goldman prepared to offer AIG a haircut in the month before its rescue? A legitimate question, given that Goldman refused to accept such a cut when the New York Fed raised the idea after it...