Credit Derivatives and Catastrophe

For a lucid and gentle introduction to the credit derivatives at the heart of the financial crisis, see Donald McKenzie's review of Gillian Tett's book here. Tett is an FT journalist who has done excellent reporting on troublesome financial innovations, and McKenzie is a sociologist of knowledge from whose papers I have learned a great deal about how some very bright people were able to delude themselves about the risks involved in complex financial proudcts (h/t Harry Marks, Peter Gourevitch).