Of course, it’s not exactly as simple as it first appears. In the wake of the crash the ISDA started chivvying CDS dealers to try and net out their deals. As CDS are fixed term contracts and normally non-tradeable, the common practice for getting out of a CDS deal before the fixed term (usually 5 years) expires is to create a second, opposite contract. The end result is double the notional outstanding, though the deal has been effectively cancelled
Of course, it’s not exactly as simple as it first appears. In the wake of the crash the ISDA started chivvying CDS dealers to try and net out their deals. As CDS are fixed term contracts and normally non-tradeable, the common practice for getting out of a CDS deal before the fixed term (usually 5 years) expires is to create a second, opposite contract. The end result is double the notional outstanding, though the deal has been effectively cancelled
. But this whole confusion over what the relation between the gross notional outstanding value and the actual current value at risk is part of the squid-ink cloud of obscurity that CDS have brought to the market and, ultimately resulted in the global panic of 10 October 2008 – the 10/10 event – which was brought about by the panic over the Lehman Brothers CDS auction date set for that day by the ISDA. It’s worth remembering, with all the current media focus on the Lehman bankruptcy, one year on, that it was not the Lehman bankruptcy itself, but the CDS auction that followed that momentarily created a complete cardiac arrest of the global capitalist circulation system. More on the 10/10 event later.
(Source: ISDA) You gotta love that shit. 
. Yes that is $70,000,000,000 at the top of the right-hand axis.