The Wall Street Journal is good this morning in writing that more trouble is brewing in the derivatives markets.

One of the reasons this stuff was allowed to get so out of control was that no one really understood it. You can understand why as your eyes glaze over reading this story. And that’s not a criticism; the same might happen reading my synopsis of it

The WSJ says “synthetic” CDOs, which are made up of credit-default swaps (those insurance contracts on a company’s default) are plunging in value as hedge funds and others bail out. Prices are nearing a point that could trigger contractually obligated sales, which will push up the cost of credit-default swaps and make it more expensive for companies to borrow.

Perhaps the weakest link in the market are specialized funds, known as “constant-proportion debt obligations,” that work much like synthetic CDOs but with one important difference: They use borrowed money, or leverage, to boost the returns they can provide for investors, a strategy that also magnifies losses.

CPDOs, for example, typically borrowed about $15 for every dollar their investors put in. They also contain safety triggers that force them to get out of their investments if their losses reach a certain level. Analysts estimate that most CPDOs reach those triggers when the cost of default insurance hits about the level where it is now.

But 15-to-1 leverage isn’t so bad when you consider the 80-to-1 employed by some “credit derivative product companies.” The Journal points to two that according to an analysts “could wreak havoc on the marketplace,” if forced to sell.

Not another generational story about the Baby Boomers! This one is tossed off in the Journal:

Affluent Boomers had more to spend than most of their Depression-baby parents could have dreamed. Their appetites buoyed sales of everything from Bavarian sedans to Sumatran coffee to Swedish furniture. Boomers could make or break a brand. Boomers embraced Toyota, and helped make it the world’s dominant car maker. They shunned Oldsmobile, and it died. Boomers have driven the explosive growth of the computer and consumer electronics industries, accounting for half the money spent on techno-gadgets, big-screen televisions, laptops and the like, according to McKinsey…

Now, millions of Boomers are realizing that “hope I die before I get old” was just a sarcastic line in a rock and roll song, not a life plan…

The sluggish 1970s and early 1980s overshadowed the college years and early work lives of the bulk of the Boom generation. But with a few mild hiccups, it’s been easy riding since then.

Yuck. Let’s put a moratorium on these kinds of stories, especially when they’re not correct as in here:

Some economists and demographers say the Baby Boomers themselves are driving the current turmoil. As Boomers send their kids out into the world, they are entering the phase of life when income starts to fall, spending slows and houses get sold. The same generational heft that Boomers used to create fads for hula hoops, sport-utility vehicles and Harleys will now work against them as all of them rush to cash out and slow down at once. That puts more houses up for sale to far fewer buyers: a younger generation that is also less able to afford them.

This is just wrong. Baby Boomers are “driving the current turmoil”? This is the WSJ, people. It, of all papers, should know that what’s driving the turmoil is the bursting of a massive bubble that inflated homebuilding and sales far beyond all normal trendlines. Boomers getting old doesn’t have a whit to do with it. How many boomers do you know selling their houses to shuffle off to the nursing home? Not yet, anyway.

Bloomberg goes long with a story on Goldman Sachs becoming a commercial bank. But through the whole thing, it doesn’t make even a nod to what role Goldman had in creating the crisis—something Audit big cheese Dean Starkman asked about yesterday.

And it contradicts reporting by Gretchen Morgenson of the Times that Goldman had a $20 billion exposure to AIG had the government let that insurer collapse.

This year, Goldman also saw trouble brewing in the insurance sector and began hedging its exposure to AIG, which had a notional value of about $20 billion as of mid-September, according to a person familiar with the strategy. The hedges included short positions on AIG and other insurance companies, as well as CDSs. Goldman wouldn’t have lost money if AIG had gone out of business, the person said, although the collapse would have caused wide- spread economic distress.

Who is right? “Several” people talked to by the Times or “a person familiar with the strategy” talked to by Bloomberg. I’ll side with the NYT until further notice.

And a useless-detail alert, with Bloomberg learning from the Journal:

Goldman executives, fortified with Chinese takeout, gourmet pizza and burgers from Harry’s at Hanover Square, had spent the weekend debating the firm’s options.

But inquiring minds really want to know: Where was the Chinese from? Au Mandarin or China Chalet? Liberty View perhaps?

The LA Times take a good long look at the health-insurance industry rejecting patients with minor pre-existing conditions, in the first of a three-part series.

Insurers insist that they can’t stay in business without excluding chronic disease sufferers, known in the industry as “clinical train wrecks.” But companies in the individual market also want to avoid even marginal risk — adopting a practice some insiders call “hangnail underwriting.”

Even nonprofits such as Blue Shield of California are obliged to follow prevailing market practices, lest they be swamped with the highest-cost customers.

“That’s the game,” said Cindy Ehnes, director of the California Department of Managed Health Care. Risk selection, she said, “must be part of every insurer’s strategy or else they potentially will get all the bad risk.”

Such cherry-picking tripped up Pam Munter when she applied for individual coverage two years ago. She had retired from a clinical psychology practice in Oregon and moved to California, where her insurance applications were rejected, one after another.

The reason: She takes Prevacid for gastroesophageal reflux disease. It is a widely prescribed drug with annual sales exceeding $3 billion.

The NY Times notes the rapidly changing Zeitgeist has Hollywood is scrambling to keep up with drastically changed views of Wall Street.

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Ryan Chittum is a former Wall Street Journal reporter, and deputy editor of The Audit, CJR's business section. If you see notable business journalism, give him a heads-up at rc2538@columbia.edu. Follow him on Twitter at @ryanchittum.