what about the 60 trillion cdo problem, page-37

SO B covers A for $1m, and C covers B for the same $1m , and D covers C for the same $1m, etc etc

Bank - $1m to A - 1m CDS - B - 1m CDS - C - $1m CDS - D

So theres 3mill outstanding in CDS between B,C,D and A owes $1M, but if A defaults, B pays A, and C pays B and D pays C

So really its all 'passed on'

But if D goes out of biz, he cant pay C, and so forth

So systemic risk

Who knows what the real narrowed down CDS debt is once you work out how much is reinsured and passed on with whom

Just gotta make sure all parties remain solvent

I get it

Ok SB2000 now i get what u say re 'they pass it on', soory man.