How Exxon Valdez Destroyed the Economy

This is a good article; its general thesis is that when Exxon faced the possibility of a $5 billion fine after the Exxon Valdez incident, it went to J.P. Morgan Co. to secure a line of credit against that judgment.  Wary of the judgment occurring (it didn't; the fine against Exxon was whittled down to $500 million), J.P. Morgan invented something called a "credit default swap".  And then, to package the debt as a security, in which it can be pooled in with many other debts, they invented something else called the "collateralized debt obligation".  J.P. Morgan and other financial firms then decided to make these offers on a regular basis, and the rest is history.