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I have recently been reading about a market in unregulated securities created by hedge funds and others that reaches $45.5 trillon. This market is called the "credit default swaps" market. It is, by all accounts, the biggest single market in the world, bigger than the U.S. stock market or the U.S. housing market, or U.S. Treasuries, or the Euro market, etc. It is completed unregulated and information-wise, completely opaque. Sometimes no one knows who the contra party is, and who would pay them!
These products seem to be highly leveraged, where a series of calls or defaults could bring the whole house of cards down. They are supposed to insure banks, brokerages, insurance companies and bondholders against loss.
Reagan/Clinton deregulation gone insane, brought to you by Bush 'regulators' and Wall Street.
