Another Word On Counterparty Risk

Tonight I read an extraordinary piece on the leverage in the financial system. The counterparty risk I wrote about recently is addressed in the piece. I found the article so important that I am going to highlight it here: http://www.investorsinsight.com/otb_va_print.aspx?EditionID=619. The title is, "The Next Dominos: Junk Bond and Counterparty Risk" . It clearly states the counterparty problem that the US financial system faces, and to be frank is a bit scary. The notional value of the credit derivatives is the most scary part, about $45 trillion. I found the article through the blog: http://mispricing.blogspot.com/2007/12/next-dominos-junk-bond-and-counterparty.html.