As with subprime mortgage securities and hedge funds, these are unregulated. The article is from the New York Times.

"The market for these securities is enormous. Since 2000, it has ballooned from $900 billion to more than $45.5 trillion — roughly twice the size of the entire United States stock market.

"No one knows how troubled the credit swaps market is, because, like the now-distressed market for subprime mortgage securities, it is unregulated. But because swaps have proliferated so rapidly, experts say that a hiccup in this market could set off a chain reaction of losses at financial institutions, making it even harder for borrowers to get loans that grease economic activity."

I believe it was the lack of regulation which is blamed for the 1929 crash. I'm wondering if the end-around of regulation as accomplished by the wealthier investors could have the same effect.

Don't know.

Arf