cds auction?

It set a price of 8.625c/$, a bit less than expected. The insurers now have two weeks to pay up. Some may not be able to, and go bankrupt. AIG has underwritten a lot of them, and it is thought that RBS and Barclays have as well.

Then of course, some companies who are expecting this money to come in might go bust if their insurer doesn't pay up, and this in turn could affect other companies.

There are further auctions coming up soon for Washington Mutual and the Icelandic banks, and these could cause problems.