$1.4 Trillion of GSE Credit Default Swaps Triggered by Bailout

"Due to the Federal assurance that positive net worth will be maintained, this ought to be moot from a payout standpoint (ie, there would not be loses on the bonde). Even so, an unwind of this magnitude has never occurred, and if contract holders decide to close out their swaps, that would lkely also lead to the settlement of swaps entered into as hedges (most agreements written by dealers were allegedly hedged by offsetting positions), leading if nothing else to a major back office event."