[ThePythonicCow]

Head on over to Jesse's Café Américain to read his October 3, 2008 post "Waves of Credit Default Swaps Incoming" for a more readable explanation of this.

Holy Smackers!

He makes an interesting analogy with being just at the front of a big earthquake, using the following graphic:

[ThePythonicCow]

One more post responding to myself ... I found a good explanation of Mortgage Backed Securities and Credit Default Swaps, which I posted on the FR thread: When the bubble burst [Good explanation of CDS's].