Spin, Denial, Survive the Credit Crunch ..

Published: January 7, 2008, 5:02 am

The scene: a kickoff party in late November for the new Paris office of the troubled U.S. investment bank Bear Stearns. As applause for a formal presentation faded, and the cocktail party began in a nearby salon, a swing band struck up the 1936 Fred Astaire hit "Let's Face the Music and Dance." It all served as an ironic reminder of how many banks and investment houses are now facing the music of easy money, risky lending and massive write-downs - and how disconnected the present gloomy picture is from the upbeat gloss being spread by economists, politicians and other pundits. And while 2007 may be remembered as the year of credit crisis and bursting real-estate bubbles, 2008 may go down as the year when all players in the financial markets - from chief executives down to individual investors - had to face the music about formerly safe bets like hedge funds, real estate and the U.S. economy. "Subprime is only the leading edge," warned Avinash

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