Don't forget about counterparty risk. This is something everyone forgot about during 2008 and ended up being one of the biggest problems. This is what happene

Don't forget about counterparty risk. This is something everyone forgot about during 2008 and ended up being one of the biggest problems. This is what happened with AIG, where people thought they were adequately hedged on their position because they bought a CDS with AIG, and then it turned out that AIG itself had written so many CDSs that it couldn't pay back its obligations, which exacerbated the entire financial crisis.