I can see how there may be issues for the hedge fund industry...

I can see how there may be issues for the hedge fund industry and possibly some more exotic or illiquid asset classes that they dominate but would think if they do have to sell some additional equities over a two month period the market can absorb that without too much trouble.

Regarding CDSs sure holders of these potentially face losses but some of the alarmist stories that were going around about a financial hole ten times the size of global GDP were just ridiculous. When a CDS is triggered one party pays out to another party but the net loss to the financial system is zero. Used as intended this should be beneficial in spreading rather than concentrating a risk, however there is a potential problem if a counter-party becomes unable to pay which may cause the loss to be taken by the original party. Still the total loss to the system as a whole is only the original value of the debt that's been defaulted - not trillions of dollars as some were claiming.