So says Institutional Risk Analyst (good outfit via Barry Ritholtz)
(warning - complicated read)
http://www.ritholtz.com/blog/2009/04/aig-before-cds-there-was-reinsurance/#more-22986Whether this be actual fraud or not (questionable in my view), the potential implications if these *side letters* actually exist to any decent extent in the (nearly 1 quadrillion) derivatives market is, well, anyone who holds them if they blow up = blows up too, whether it be Citibank, Goldman Sachs or the federal government, due the notational value.
