The danger is the counter parties failing(mannfm11)

It dawns on me that the banks	mannfm11	NEW 2/12/2008 11:31:50 AM
couldget fat in a period of default. The danger is the counter partiesfailing. Imagine this, bank with bad CDO's goes in and buys defaultinsurance on investment grade stuff at low premiums. They have a goodreason for money to be tight and as a result they drive the risk ofdefault on these bonds up. This in effect drives the value of thedefault swaps they are long up and allows them to offset. These CDS'sare nothing more than trading like trading the S&P futures. Thismust be a tremendously interesting market.