> On the other hand, Goldman (and everyone else) did not expect gigantic AAA counterparties to go bankrupt. Greenspan says that evaluating counter-party risk w

> On the other hand, Goldman (and everyone else) did not expect gigantic AAA counterparties to go bankrupt. Greenspan says that evaluating counter-party risk was SOP at the private institutions where he worked before joining the fed. He claims that he knew more about the state of his competitors when he was in private biz than he did about the state of the same institutions when he was in the fed. > If you bet money on a horse race, you might not plan for winning but then having the track going bankrupt. You may not plan for it, but it happens. More to the point, it doesn't matter whether Goldman planned for it - they were willing to take the profit, so they should take the loss as well.