Counter-Party Risk.

About 20 months ago, we were all reminded of the perils of "counter-party risk." AIG wasn't good for it. Fannie wasn't good for it. Citi wasn't good for it. Truth be told, none of the major financial institutions were in a position to "make whole" their counter-parties on all of their bets.

Now, let us imagine that you have loaned a bunch of money to Greece, or Portugal, or Spain, or even Austria, or Britain. Will you be repaid? The chart looks grim.