The Economist's Cheery View of Credit Default Swaps

It's remarkable how attending an industry love-fest can distort one's perception. The Economist seems to have fallen hook, line, and sinker for International Swaps and Derivatives Association view that counterparty risk in the credit default swaps market isn't all that big an issue.

Its article, "Clearing the fog." while mentioning the little problem that led to Bear's gunshot wedding, manages to quickly brush by it. It does provide useful detail on the plans to establish a clearinghouse, but fails to mention that this initiative is to forestall regulation.