The value of those derivatives to this day aren't known.
The investment bankers knew they were trash and so did the govt.
But what choice did the banks under threat of Federal prossecution have ? Remember what happened to Wells Fargo.
The value of the MBS at the time was impossible to assess.
Its why AIG almost wen't down. Those banks by law had to buy credit default swaps ( insurance ) on those MBS because they were such a risk.
What happened from the govt side was criminal but did anyone go to jail?
6 trillion in wealth gone but the govt and the media ran a campaign to put it all on the banks and apparently they were some what succesful.
Ever wonder why no bankers went to jail ?