Tuesday, February 03, 2009

SPAIN'S economic situation is getting worse and worse: January unemployment figures are the worst on record, and the government is stupidly threatening banks to lend more money. But wasn't the problem, precisely, that there had been too much lending driving prices -- particularly read estate -- up so wildly?

And no, it doesn't change if the government says it will back the lending -- just ask Freddie Mac and Fannie Mae.