No, it is scared crapless that they don’t know what the counterparty liabilities are in the credit default swap markets. Socialism vs. capitalism has nothing to do with this. Only people who think that politics rules everything are worried about such piddling details right now.
The CDS instruments have the power to take banks under. Big banks - like Citigroup.
If Citigroup goes under, the US banking system and indeed, the entire economy, is done until such time as a replacement is found.
The repeal of Glass-Steagal allowed Citi and AIG to be grown into a monsters so big, that they can individually cause HUGE disruptions in the financial markets.
In this environment, it is now plausible that not only one, but both AIG and Citi go down in flames. The recent extra infusion of money into AIG was made necessary by CDS counterparty requirements.
Buffett was not exaggerating when he said that derivatives were instruments of mass financial destruction. You’re seeing exactly what he meant, and that he wasn’t kidding.
Piddling details between socialism and capitalism? IN the US economy? ROFL. You were probably pushing for the bailout too.