Politicians blame the speculators again
A LITTLE boy was arrested yesterday for saying that the European emperor had no clothes. “This kind of speculation only causes panic and should be stopped,” said a minister, who refused to comment on reports that the emperor was being treated for hypothermia.
Hans Christian Andersen’s tale is worth remembering as politicians apportion blame for sovereign-debt scares. Take suggestions that the market in sovereign credit-default swaps (CDSs) should be restricted. These instruments allow investors to hedge the risk that a country reneges on its debt and let others bet that such a default will happen. ...