The decision by the Fed to offer emergency liquidity to Bear Stearns and to facilitate its acquisition by JPMorgan Chase had less to do with the size of Bear's balance-sheet than with its central role in markets for credit-default and interest-rate swaps.

ECONOMIST: Paradise lost

Credit derivatives have made it easier to separate the credit risk (the danger of default) of bonds from the interest rate risk.

ECONOMIST: The credit squeeze

To reduce interest-rate and default risk, Ms. Benz suggests sticking with intermediate-term muni-bond funds with a high percentage of their holdings in general-obligation bonds, which are repaid with tax revenue.

WSJ: Conquering Retirement: The Case for Muni Bonds