understanding the depth of the credit bubble deflation situation

A derivative that is created without the benefit of an actively traded cash market is essentially a deception. In the case of credit default swaps and other “derivatives” where no actively traded cash market exists, the dealer pretends that a model can serve as a substitute for a true cash market basis. But such a pretense on the part of the dealer is patently unfair and, in my view, is really an act of securities fraud that should be prohibited as a matter of law and regulation.
Institutional Risk Analysis