The other thing to consider in the CDS is the fact that it is so...

The other thing to consider in the CDS is the fact that it is so convoluted that it can cancel itself out.

e.g. Say derivatives exist for VK defaults, Roissy will go bankrupt, Roissy won't go bankrupt.

VK doesn't default, Roissy doesn't go bankrupt = 1CDS claim
VK does default, Roissy doesn't go bankrupt = 2CDS claims
VK doesn't default, Roissy does go bankrupt = 1CDS claim
VK does default, Roissy does go bankrupt = 2CDS claims, but Roissy is bankrupt so only 1CDS claim is worth anything.

A lot of the derivatives are like TAB tickets on a loosing horse, no longer worth anything.