Buttonwood: The source of denial
How debt problems are constantly explained away
GREECE denied that it was planning to restructure its debt this week (see Economics focus), even as traders in the credit-default-swaps market made bigger bets that it would. A pattern of denial in the face of mounting evidence has been a recurring feature of the debt crisis.
Back in 2005 and 2006 received wisdom denied that the rapid growth of subprime mortgages was a problem. American house prices were extremely unlikely to fall at the national level. In any case, the debt had been widely spread among investors thanks to the derivatives market. ...
