Also, my genius finanical bailout plan

(I absolutely love this- since when has CSPAN had so much theater!)

I feel like as long as the government is being generous with the bad-debt forgiveness on Wall Street, they should spread the love over here. As many people as owe money to Sallie Mae and Fannie and Freddy- we should all get, say, $25k in government debt forgiveness. It would make a huge difference for those of us who are earnestly making our payments, would increase the likelihood of people actually paying off those debts, and would generate taxpayer good will toward the bailout.

late edit:
So, I've been doing some research, and I'm learning all about the economy (tangent: damn, could they possibly use more codified language to explain this stuff? It reads like deliberate obfuscation- they intend for it to be so boring and incomprehensible that nobody can really penetrate the meaning of all this stuff).
So here's a quick summary of what I understand:
Shortselling is a way for me to make money if I don't own a stock and think that stock will decrease in value. I call up a friend of mine who has that stock, and is a long-term investor, and borrow, say, 1000 shares of that stock from them. I then sell the 1000 shares, wait a week or so, buy them back at the decreased rate, and return them to my friend the long-term investor. If I sold them at $5 a share and buy them back at $4, then I've made $1000 and my friend is in the same position they would be in anyway. So, back in the day when stocks were literally pieces of paper, you used to have people running all around with wheelbarrows of borrowed stock, so that someone could shortsell it.
Naked shortselling is the same thing, but I haven't actually got the stock I've borrowed. It's as though I know my friend will lend me the stock if I ask them, but I don't actually have it in my hands. So say I sell 1000 shares of stock that I don't own and haven't actually borrowed, and then say that I wait a while for the stock to go down (it's a week later but I think it may still go lower, so I haven't bought back the borrowed stock)... there's no real penalty for this. Someone eventually calls my broker and points out that I sold stock I don't have, but no one has to actually do anything about it. It's been going on forever, to save people all that wheelbarrowing.
A credit default swap is where I make a risky loan to someone, and I didn't get any collateral from them to cover the potential loss. If I make a bunch of risky loans, my cash flow gets strapped and I have all these potential losses out there. So I find someone to assume the risk, and pay them to do so. So if I loan person X $1000, and expect them to pay me $10 a month plus interest until it's repaid, I then find person Y and ask them to pay me an agreed percentage if person X doesn't come through. I pay person Y $1 a month to assume the risk for me. If X pays me, all is well and I buy the debt back from Y, and all I've lost is a portion of the interest. If X doesn't pay me, Y pays me my percent, so I still get, say, $400 back of my original money. People use CDSs to hedge risky loans. The problem with credit default swaps is that they encourage people to make riskier and riskier loans. Eventually I'm in a position where not only can person X not repay my loan, but person Y can't be relied upon to pay me back either, and there's no collateral tied to any of these transactions, so there's no way to recover any of it from anyone. What's more, if person Y agreed to cover 40%, I may have also hedged the debt with persons Z, Q, and L, so that this bad debt is spread all around. There's about $58 trillion dollars in this market (twice the size of the stock market, up from $44 trillion a year ago), and Christopher Cox thinks that's the next impending crisis. (Hey, turns out there's no IRS rules for reporting income from these transactions, either, so probably a bunch of people have been making a fortune and not paying taxes. Lovely.)

Here's a couple paragraphs from Money.com:

While such contracts have legitimate uses, some fear that the protection they offer could lead market participants to take risks they might not otherwise. Just who is using the instruments and who is backing them aren't clear, however. Also unclear is whether the parties who sell the protection to swaps buyers have the financial strength to make good on their promises, since there are no minimum standards for capital strength or liquidity.
...
Opportunities for credit-default swaps to be abused in insider-trading or market-manipulation schemes are an issue as well. Since credit-default swaps may be used by speculators as well as those seeking protection against a credit default, regulators worry they could be a powerful tool for manipulators. The SEC announced last week that it is investigating whether brokers, hedge funds and other money managers might have used credit-default swaps to pressure stock prices lower, producing profits for short sellers.

I have to say, I'm really interested in all this. It's really captured my imagination, and I can't wait to see what happens next.