credit default swaps

http://www.eschatonblog.com/2009/03/who-are-counter-parties.html
atrios had this thread out today:
$30 billion to AIG. A $62 billion quarterly loss. Where did that 62 billion go?
I found this on cnn:
http://edition.cnn.com/2009/BUSINESS/03/02/aig.explainer/index.html
(...)
Yes it was. AIG has been sailing through untroubled waters for 10 years rapidly expanding its business massively. This came to a crashing halt when it slammed right into the current economic crisis. It grew too big too quickly and like so many financial institutions, it took too many risks, such as offering banks unregulated insurance contracts, known as credit default swaps.