Mike Aguirre, who leaves the city attorney's position Monday (Dec. 7), is preparing a white paper on the multi-trillion derivatives market. The paper may come out later this week. In essence, it sketches how financial institutions' gambling with derivatives has put the entire global financial apparatus in grave peril. Aguirre tells how Franklin Delano Roosevelt, faced with massive bank failures in the early 1930s, declared that there "must be an end to speculation with other people's money." Legislation such as the 1933 Glass-Steagall Act was created for this purpose. But in 1999, the act was repealed, and, predictably, an orgy of unregulated gambling with borrowed funds swept over the world, with the U.S. as the center of the cancerous activity. Now the face value of derivatives is a quadrillion dollars, and credit default swaps, the unregulated derivatives that supposedly guarantee debt instruments, have created the possibility of a financial nuclear reaction -- one failure bringing down other institutions all over the world. This is why the U.S. has been bailing out such malefactors as Bear Stearns, AIG, Citigroup and the like. Along with others, Aguirre favors repeal of the 1999 repeal of Glass-Steagall; registration of collateralized derivatives as securities; registration of hedge funds and hedge fund advisers; regulation of credit default swaps under state insurance laws, and prohibition of credit default swap speculation. Aguirre is perturbed that some of the financial doubledomes who favored repeal of Glass-Steagall are counseling the Obama administration. Aguirre is forming a new law firm on C Street with two former city attorney colleagues to pursue litigation in this area. The two partners will be Maria Severson, former head of the civil division, and Chris Morris, former head of the criminal division.