There is nothing in what you say that seems unreasonable in the least. I just have anecdotal evidence that it was still hard to get a mortgage all along, but who knows what the smaller cajas were doing. Also, whether or not the mortgage standards were lax the fact is indebtedness has at a record high and Spaniards were acquiring bad habits such as home equity withdrawals and abuse of credit cards.

Now, on the argument that this may be a way for the Treasury to roll over the repos that the ECB won't, I don't think Solbes could have said "we're not going to purchase 'toxic assets' but 'highest quality' assets, that is, from mortgage loans to loans to small and medium enterprises, which the financial institutions will group into securitised funds which will be valued by credit rating agencies" with a straight face. Clearly ZP doesn't know the difference (namely, none) between a CDO and "loans securitised by the financial institutions and valued by rating agencies" so he can say these things with a straight face. And an AAA CDO is still AAA, right?


A vivid image of what should exist acts as a surrogate for reality. Pursuit of the image then prevents pursuit of the reality -- John K. Galbraith