Insurance is ok. Insurance is regulated. Credit default swaps are derivatives. They were deregulated in the http://en.wikipedia.org/wiki/Commodity_Futures_Mo

Insurance is ok. Insurance is regulated. Credit default swaps are derivatives. They were deregulated in the http://en.wikipedia.org/wiki/Commodity_Futures_Modernization_Act_of_2000 http://en.wikipedia.org/wiki/Commodity_Futures_Modernization... so as to be completely unregulated. You can't insure 35 times your cash reserves, but you can issue just such a derivative. Insurance was ok. Insurance gone mad in the form of derivatives literally tanked our economy.