Credit default swap contracts are becoming the hidden threat to the economic stability of the US and other world economies.
Because of the free reins that the CDS traders have enjoyed, with virtually no government regulation, financial experts are questioning the soundness of these contracts. Right now, there are about 63 trillion dollars worth of CDS contracts in the US alone.
Unraveling of the system would result in a financial catastrophe of unseen proportions…

This video explains well the whole web of CDS contracts.

Credit Default Swaps Contracts Explained!1915392