[Warlord]

That's a faulty metaphor. The “megaton TNT bomb” is inherently dangerous. Credit derivatives are only dangerous when used unwisely in particular circumstances. The real danger derives from the mismanagement of credit risk not simply the use of credit derivatives.

[Truthsearcher]

The issue is not whether something is dangerous “only when used unwisely”, that is not the criteria. The criteria is when it is used unwisely, what are the potential fallout of such an incident.

If the fallout is mainly localized to the person making the unwise action, then we allow it because the individual bears the risk. But if the fallout engulfs a significant portion of the public as collateral damage, then society has a right to step in.