The opinions and “facts” reported in the Icelandic and international media on the current situation in the Icelandic economy have been almost as varied as the opinions and “facts” expressed on online public comment forums over the last few days.
The only real fact we know is that nobody really knows what’s going on just at the moment. And there’s the disturbing realisation dawning that this might also include some of the people we’re all looking to for answers.
The IMF has delayed its decision on Iceland’s USD 2.1 billion loan request yet again. This time apparently because they want Iceland to secure the remaining four billion of its desired six billion before they approve it – despite already knowing full well that other potential lenders are holding their money back until the IMF approves their loan.
The Swedish business daily Dagens Industri describes Iceland’s current position as “a catch 22 situation”. The Swedish Central Bank is one of the key institutions that has declared it is waiting for IMF money to reach Iceland before it offers the country a loan.
Icelandic suspicions are that the IMF loan is being held up by the Dutch and British governments eager for Iceland to agree to cover the cost of all Icesave deposits before they give the IMF loan their blessing. Under European law, Iceland is responsible for only the first EUR 20,000 in each account.
While the Dutch have hinted that this may be somewhat true, a British government spokesman told Frettabladid today that the UK wants Iceland to receive the loan and that the country has not been using its influence in the IMF to delay the decision.
Meanwhile it is looking more and more likely that the British Royal Air Force will be asked not to come and take over Iceland’s Keflavik airbase this December, as had been the plan under the NATO defence agreement. Under the agreement friendly nations have been taking it in turns to defend Iceland’s airspace since the USA left Keflavik in 2006. The leader of the Left Green Alliance described the idea of Iceland being protected by the military of a nation with whom relations are so strained as “preposterous”.
The Icelandic president’s apparent invitation to Russia to take over the airbase at a diplomatic lunch last week was generally greeted with shock – despite the fact that the president is a figurehead and has no real political power.
His frustration with Iceland’s traditional allies is shared by many of his countrymen. His invite to Russia was probably only designed to shock and promote debate (which it has). And his declaration that he, and all MPs, should be paid less because of the financial situation proved very popular. All-in-all, a good week for President Olafur.
The new, open and information-rich government stance towards public relations is still bearing little fruit, it would seem. However, it is possibly not because they want to keep the public in the dark; rather that there just isn’t much to tell.
The regular Saturday protests outside parliament have spilled over into the week as well, with a ring of people holding hands encircling the entire parliament building reported at lunchtime today. Among their chief demands is the scheduling of a new election immediately.
The idea that the current stable and experienced government should be allowed to sort out the problem and get the country on its feet again before anyone even thinks about elections is a theoretically sensible idea that most people agreed with to a point. But pressure is undoubtedly building with each passing day for a fresh start sooner rather than later.
Talking of fresh starts: a principal reason for Iceland securing loans worth USD 6 billion is to provide substantial foreign currency reserves to support the Icelandic krona when it is refloated on international markets in the near future. Iceland’s currency absolutely needs to have a decent level of value and stability at whatever cost in order for the country to get back on its feet again.
But does that currency need to be the Icelandic krona? Daniel Gros, director of the Centre for European Policy in Brussels who assisted Montenegro on adopting the euro without joining the European Union, recommends Iceland do the same and that the country do so as soon as possible, Iceland Review reports.
Two Icelandic economists, Hreidar Mar Gudjonsson and Arsaell Valfell put forward the argument originally, saying that huge loans to Iceland would leave the country in an impossible amount of debt for generations to come, and that taking the euro would be a more sensible alternative to taking foreign loans.
The European Union has consistently stated that Iceland is welcome to join the euro, but that it would need to enter the EU first. It was said this spring and summer that the unilateral adoption of the currency without EU approval would be frowned upon and would severely damage EU-Iceland relations.
Daniel Gros now argues, however, that the krona is so unsustainable that Iceland needs to adopt the euro right now – before the end of 2008. And he also believes that the EU would now agree with the decision, unlike earlier in the year.
If Iceland were to tell the European Central Bank that it had taken the euro out of desperation and that it would immediately set about implementing the Maastricht Treaty criteria as soon as possible, Gros believes EU-Iceland relations could remain friendly.
The scandal of how Iceland got into this mess in the first place, who is to blame and how they should be punished will be solved when the huge wave of inquiries begins after the country regains a semblance of stability.
But right now, the REAL scandal is how a country surrounded for decades by close friends and allies is being hung out to dry at the only time in the republic’s history that it really, really needs help from its friends. In these emotionally charged times, Icelanders are angry and upset that the world seems to be happy to watch them return to the Stone Age.
In less emotional, rational moments, it is also obvious, however, that subtle changes from any number of people, businesses and organisations could serve to completely change the situation in no time at all.
In the meantime, tourists are still flooding to the country, all the shops and restaurants remain open and well-stocked, the balance of trade is now firmly in favour of exports and most people still have their jobs…
Alëx, IceNews editor
Alex, you say “a country surrounded for decades by close friends and allies”. One might ask: What has Iceland actually done for its “friends” of late that has earned it the right to call on them ?
In recent years it trumpeted the highly leveraged takeovers of foreign businesses on the premise that Icelandic managers were somehow better able to generate profits than their former owners. Predictably that turned out not to be the case.
The credit crunch striped bare a thin veneer of actual cash to reveal that a large part of the equity itself was little more than a bubble of cross-ownership and leverage, which the international finance community has been screaming about for years.
Icelanders are fooling themselves if they think that their hubris has not generated resentment.
A new Prime Minister and new Governor of the Central Bank would transform the outlook for Iceland and allow old and true friends to be just that.
I think that although the world feels sorry for the Icelanders, they will never forgive their greedy bankers and their outrageous mismanagement.
These selfish men have wrecklessly destroyed the lives of so many vulnerable people in so many countries.
The Governements of the countries where abuse has taken place should be very firm with the Bandit Banks and punish the bankers.
“But right now, the REAL scandal is how a country surrounded for decades by close friends and allies is being hung out to dry at the only time in the republic’s history that it really, really needs help from its friends.”
That’s as much as a scandal as all those gamble addicts that once were surrounded by close friends and relatives and now are SUDDENLY being hung out to dry, when they really really really need help to go on as usual! Shocking, how people react when you ask for more money after just having ripped them off a bit before. And no amount of insulting them will make them act generous. How unsensible!
Yeah, I’m afraid Andrew is right – a new prime minister and government would radically change how Iceland is perceived abroad. The reluctancy from IMF, the Dutch, Germans, Brits and others to lend money is no co-incidence.
I don’t understand though how these people are still in power, given that they were the very people involved with and giving the green light to the banks and bankers. These guys are well dodgy and this is the impression they convey to the outside world.
Icelanders just don’t seem to get it.
You stole billions from your friends to finance your lifestyle and now ask for more money to keep your standard of living up.
You don’t want to pay back your debts never mind to pay the depositors their guarantee.
You refuse to remove the greedy fools who got you into this mess.
You really need to learn a lesson – Iceland is entirely responsible for its and its lenders situation – nobody else.
Not so fast Nicholas.
Even before the crisis, PERSONAL debt in Iceland has been amongst the highest in the world for years, reaching 213% of personal disposable income. In the US, with all of its current problems, it was still only 140%; in Germany about 100%.
To be able to borrow even more, while keeping the interest payments low, the loans were denominated in Yen and Swiss Francs
The bankers could have been more prudent. So could the population. It’s easy to label the “bankers” as the greedy ones. No one was forced to borrow so much. The greed lies as much with those who chose to buy and consume as much as they possibly could.
“The Icelandic president’s apparent invitation to Russia to take over the airbase at a diplomatic lunch last week was generally greeted with shock”
One really has to wonder why! What a smart move, sucking up to the Russians now. Ok, they may have some minor problems with their currency and had to suspend the trading of stocks, but certainly they’ll find some billions somewhere to bail out their longtime friends, the Icelanders! Nevermind those Baltic nations who say it’s not really good to be too close to the Russians. Pure nonsense, Putin and Medvedev are so warm, embracing persons! Yeah, either the generous Russians will help, or the European nations will react to the serious threat of Iceland changing sides. Fantastic strategy.
“the current stable and experienced government should be allowed to sort out the problem” because they already have proven how competent, smart, and farsighted they are in it! The stability showing in determinedly refusing any personal consequences, no matter how much any official screwed up, is awesome. And the experience, based on steadfastly conducting a failed economic policy in spite of all warnings, is hard to match! Also, after all, the Iceland people are so accustomed to these familiar faces that they don’t feel any pain about their occasional blunders anymore. This trumps all concerns that maybe a more diplomatical and better qualified government would be an advantage in the negotiations. No, that wouldn’t be the Viking way of dealing with foreign nations!
“In the meantime, tourists are still flooding to the country, all the shops and restaurants remain open and well-stocked, the balance of trade is now firmly in favour of exports and most people still have their jobs…” except those that have been laid off, only temporarily, of course. And there’s really no shortage of Hákarl and Súrmjólk and Egils Pilsner. Who needs Perrier, Heineken and Filet Mignon, that’s elitist crap. And all those tourists, nice folks! It’s only annoying that they seem to think every Icelander is a mobile exchange office – “35000 kronas for 100 Euro? Deal?”. However, things couldn’t be better right now. The future looks rosy!
Basically Iceland stole money from what you call “close friends and allies” and now they “Play Bakrupt” not to pay back.
Iceland has no intention whatsoever to pay.
Sorry but that’s what seems to me
Only joking, dear Icelanders! I’m sorry if some may think I was a bit too harsh. It was just that the forced optimism displayed in the story tempted me to carry it to the extremes. But I really hope there will be an aceptable solution to this mess, and better sooner than later.
Of course, some personal changes in government, with more diplomatical and realistically thinking people taking over, sure would help…
I live in the Baltics, so I am fully aware of how vicious the Russian Federation/Putin can be. I am absolutely amazed that Iceland would offer to accept ANY financial assistance from the Russians. Also;”the krona is so unsustainable that Iceland needs to adopt the euro right now – before the end of 2008.” To use the Euro as Icelands currency, Iceland must first have less than 3% inflation and be invited to join the EU. It is also required that Iceland pays its debts, first.I think the odds of Iceland being invited, and qualifying,to join the EU by the end of this year, or next year, are ZERO.
Alex, the story you are telling is not specific of Icelanders, every part of the world suffers the same feat.
I think the real factor, your economical instability stem from the fact that you are incredibly small to support one independant currency, for example my employer (one European Telco) turnover is 5 times more than Iceland GDP!
Gray
you can buy as many euros as you want here in Iceland, the “street” exchange rate is 200
the bank rate is 137 but has a limit
and your right we do have everything we need right here, for some reason there is a shortage of Hákarl
but im sure we will survive
Russia isnt coming, no one is coming,thats not going to be a problem for us,
why dont you stop your moaning pack your bags and move over here :) the best place in the world
with excellent future prospects.
Banks and Government (for not imposing proper guidelines) should be blamed and not “average” Icelanders. Offering ppl loans in foreign currencies is like selling them arms or medicines without any supervision. Average ppl like: nurses, teachers taxidrivers are not supposed to be aware of the risks. Now a loan for an appartment that was 3 months ago 20 mln ISK is 40mln ISK and the appartment is still worth 25 mln ISK for example. You cannot allow average ppl to behave like hedge funds. If Iceland gets new loans what is the guarantee they will not be spoiled. Change the bankers and goevernment first, impose proper legislation then you will get the money. Icelandic ppl have lost 2 precious months asking ppl for more money an ddoing nothing at their end. Show that you restructure first.
BTW: Don’t count on “friends” especialy if they are British. In 1939 British didn’t want to die for Gdansk (Danzig) despide treaty obligations and they didn’t oppose Nazis. What happened later everybody knows.
Great summary Alex
@Julia Set
Pls. read over the history of let’s say the last 100 years of Icelands relations to other countries, among the Brits and the Balcan countries
“But right now, the REAL scandal is how a country surrounded for decades by close friends and allies is being hung out to dry at the only time in the republic’s history that it really, really needs help from its friends. In these emotionally charged times, Icelanders are angry and upset that the world seems to be happy to watch them return to the Stone Age”
Nobody but nobody wants to see Iceland return to the Stone Age. I think everything can be fairly easily sorted if the Icelandic government make one or two clear gestures to the historical friends as opposed to emotive propaganda and nonsense about Russian air bases and unilateral adoption of the Euro.
Dismissal of central bank governor Odsson would, IMO, be very well appreciated by Iceland’s friends.
>>BTW: Don’t count on “friends” especialy if they are British. In 1939 British didn’t want to die for Gdansk (Danzig) despide treaty obligations and they didn’t oppose Nazis. What happened later everybody knows.
Right.. and Britain didn’t spend 6 years fighting, losing its Empire, bankrupting itself fighting the Nazi.
I’m descended from Poles who fought for Britain, its true Britain didn’t gain Poland’s freedom and shafted the Poles who fought for Britain. But I’m also aware that Britain couldn’t fight Russia alone and it was AMERICA who handed over Poland to Stalin.
“by close friends and allies”
Which friends is Alex talking about? Drinking friends? Hey pale, since when Iceland want friends? They always wanted to be by them self and king of the world!
“world seems to be happy to watch them return to the Stone Age”
Of course! Is there any doubts of why…
Axel in wich bank you can buy euros for 137 kr???? are you living in iceland??
however if someone decide to move from iceland is not way to take the money out! so even if someone of course wants to leave the country to find a prosper future, well you are allow just to take 250.000 kr (1860 u$S) per fly ticket. Just leave all your things here. or sell it in kolaportid or in the ¨street market¨that axel is talks about.
Gray:
“No, that wouldn’t be the Viking way of dealing with foreign nations!”
Not the Viking way. The ICELANDIC (VIking) way. The overwhelming majority of “Vikings” do not live in Iceland. The rest of us are, to tell you the truth, as baffled and shocked by what has been going on as you are. Despite blood being thicker than water…
Well I for one cannot wait until Iceland gets back on its feet again. I will take out the biggest loan I can from one of your banks, party, party and party on until I have no money left, then I shall walk to the doors of the ‘Good old British claiment section of the socicial services and get them to look after me in my old age. After years of working and saving, your banks have stolen my money for your life styles, it is the only way forward for people like me who have been ripped off by gready banks and the gread of their people. Prudent, never again, rip off rip off, must have a nice ring around the icecaps!!!
“why dont you stop your moaning pack your bags and move over here :)”
Well, I guess I would have trouble with the language. But some holidays next year would be nice!
“The Icelandic president’s apparent invitation to Russia to take over the airbase at a diplomatic lunch last week was generally greeted with shock – despite the fact that the president is a figurehead and has no real political power.”
With all else going to hell in a handbasket, might as well let the fox into the henhouse.
“What happened later everybody knows”
Yeah, they lost lots of blood defending France, they fought desperately in the Battle of Britain, they wear Rommel down in North Africa, they bravely invaded occupied France, they drove back the Germans, they tore down the Nazi regime and freed the concentration camps. Uh, and your point was…?
Oh, well, Poland. Hmm, I never read about the Portuguese defending it, either.
@ Grey, Germany and YES
Yes you are very harsh!
Keep in mind that every country has its dark period, do you need help to recall your country of the 2 world wars? Has your country ever able to pay the debts? Maybe you should go to do some research study.
Yes Iceland is now hindered by its greedy banks, besides foreign depositors, Many Icelanders also lost a lot of money, like our family, my husband worked so hard in his IT industy in the passing years, big amount of the savings has just gone with the wind due to the collapse of Kauphing bank.
So don’t say Icelanders stole your money.
If you were all Icelanders, what would you do in this crisis???
Brownie – my favorite cookie
You are there
And we are here
Turmoil shows up
Everywhere
Iceland, Iraq and Sudan too
Most regarded threat to you
Be aware and boycott them
Blame at least and put in Scheme
Yes my dear and darling too
Don’t you hear the crowd call boo ..
Not ashamed you – most would do
Thought their name won’t litter ..
Please explain – we need to know
We await the final show
Until then we still remain,
Thrown away
(Ps) But over there you plug and play
At last, not least – of course we pay
(do you)
A skinny Cod on Ice
The discussion here used to be more friendly…
What I don’t understand is why they don’t decide to give people with Icesave accounts their money back a little at a time.
They could, for example, say that they don’t have enough to give everything back at once, but that they would give 1000 GBP a month to single Icesave account holders, 2000 to those who have a wife or kids.
It’s not an all-or-nothing situation. Everybody can understand that they have money problem. But surely they are not so out in the black that they cannot give even a little, as a gesture of goodwill and to help people who are really stuck for cash because of Icesave closure.
“If you were all Icelanders, what would you do in this crisis???”
Protest until Haarde resigns.
Nice one Axel .Yeah were broke but our spirit will never be broken. We are a small comunity our economy will rise again . 15 years ago before banking we had a strong currency .Do you really think no banking will be the end of Iceland?
Well what do you expect the world community to do ? rewarding a bunch of thieves for their despicable actions would be to legalize theft !
Pay your debts and then you’ll get the loan…
That is what many Icelanders are doing…
“That is what many Icelanders are doing…”
Like I wrote in comments to that news, a good trend.
1000 at the first protests, 2000 the second time, now 4000…
Maybe the next protests with 8000 people will do the trick. Honestly, good luck!
Amy:
“Keep in mind that every country has its dark period, do you need help to recall your country of the 2 world wars? Has your country ever able to pay the debts?”
Yes, Britain paid the last Bond to the USA for WW2 in 2005.
For WW1 Britain was still paying for them in the 1990’s.
Britain also paid in territory and gave control of the world trade system to the US (which resulted in British poverty for 10 years after the war)
Hi everybody,
just started reading this. What a nasty fight you have going on here. Ok, so lots of people are suffering. And this is a good place to shout and let it out.
I would just remind you that this crisis is global. The problem did not start in Iceland, and it will not end there — Iceland is a tiny place and can’t really move anything by itself. But it can become a casualty.
When giants like the US and China are struggling to deal with the crisis, you can be sure that the outcome will not be decided in Reykjavik or even in London. In this situation, we can fight each other all we like. But it will do nothing but vent some steam.
To all who comment and thnk they know all and know nothing
There is a principle which is a bar against all information, which is proof against all arguments and which cannot fail to keep a man in everlasting ignorance—that principle is contempt prior to investigation.”
The Icelandic government really missed a trick not borrowing to fund the guarantee. If they’d been strong about that up front they’d have side-stepped most of this stuff.
What would that be? Say an average of 15k euros, 450,000 accounts. Just shy of 7b euros. The loan and interest would be covered by the bank assets, so the government wouldn’t be out of pocket.
To the inflammatory comments by the people that are apparently convinced that “Icelanders stole your money”.
I can understand for people with hard earned savings in Icesave that these times are very trying and fraught with emotion, but please do not entertain the thought that every Icelander is laughing all the way to the bank. Not every Icelander is spending YOUR money. Believe it not, Icelanders work very hard for their money also and many have already been ruined. This is starting to seep into every level of live. Not every Icelander is a frivolous spendaholic, living off loans.
I am a Brit, living and working in Iceland. My girlfriend is an Icelander who has saved hard for many years. Through no fault of her own, she has seen the value of her savings plummet. She refused loans and lives frugally. The same can be said for many of my friends in Iceland. Not only that, through no fault of their own, their reputation as a people internationally has suffered irreparably.
The BNP poll quite a few votes in the UK, that doesn’t make every Brit a racist does it? Icelanders haven’t stolen your money. Yes poor governance and bad management have severely jeopardised your savings, but an entire population have not. Please consider this before making accusations against the people of the country.
As a end note, it has to be said this has affected me also. I will be unable to visit home (Britain) this Christmas simply because it will now be too expensive! I have most of my money in Kaupþing and pay Icelandic taxes. Does that mean, that I too, have stolen your money?
Im quite sick of the Icelandic media and politicians blaming the British for the mess Iceland got “ITSELF” into. If the British wanted to hurt Iceland they could turn off the economic tap instantly and Iceland would die. Iceland took heavy risks over the past several years with its reckless economic policies and now the country is paying the price, you only have yourselves to blame. The sooner Icelanders learn and accept that then country can go forward. Blaming the British for your troubles mearly makes you look like the proverbial baby throwing out its toys from its cot.
>>Say an average of 15k euros, 450,000 accounts. Just shy of 7b euros. The loan and interest would be covered by the bank assets, so the government wouldn’t be out of pocket.
Iceland, its government or banks, were unable to raise the 200Million so that the UK could take over the depositors itself. That figure would have prevented much of the trouble, with Iceland getting away without being liable for the guarantee.
From the comments in the phone conversation they (the central bank) looked like they didn’t want to lend the 200million and thought they could get away without backing the depositors guarantee.
Big mistake.
Carl
the simple fact is bloody gordon brown made things worse
another fact is because of these stupid poltitains Kaupthing went down hill when in fact the day before they were ok, Sparisfjordur bank is doing great because politics did not go to them,
Icelanders are inocent , My kids are icelandic so is their mother and they are suffering too, did your food bill treble in a few days NO will the price of toys for your children treble in price before xmas NO, but this is the situation in Iceland,
so glad i left england years ago
Axel: You obviously don’t know a **** ….
I used to live in Iceland, and I knew this would happen. Good I got out of that ****hole in time.
Icelanders are arrogant and foolish. They refuse to listen to others, they want to do everything in their way – even though they have been warned.
I don’t think any country should help Iceland, they should clean up their own mess like other civilized countries have to do. I hope Iceland will struggle, and soon they will come beg for help. It’s all your failt – not only the government and these powerful families (that own almost everything).
If your people knew how to run a country properly, this would never have happened.
I have absolutely no sympathy for Iceland or Icelanders.
And for those who say that it’s not only Iceland that suffers, that is true. But there is no country in the western world that suffers as bad as Iceland.
Carl: I agree. But all the media there is controled by one company, which also control most of the other companies, and which as very close connections to the government.
Icelanders have to read foreign newspapers to know the truth
I am a bit surprise of all the negative comments about Iceland….I just and to say to all the angry bristish/german/dutch people and the other…Sweep your doorsteps…before attacking us.
Here is a small link…Just look at the graph to know how much your local bank has invested…
http://contreinfo.info/article.php3?id_article=2341
Epok
Queerish
And British media always tells the truth?
it is not the bankers that are guilty but Icelandic government. government sets the rules and banks were following them. the fact that Icelandic central bank and government allowed banks to expand to such size without keeping enough reserves to back their expansion is another case of Icelandic feeling of superiority, incompetence and carelessness. Iceland was the most exposed to the international financial markets and least prepared to deal with the crisis from all European countries. In addition other countries had enough of Icelandic incompetence and attitude that they will outsmart everyone. Britain, Holland and Germany had enough of Icelandic games and promises and do not trust a word that Icelanders say, they demand written agreements and clear commitments. After living in Iceland for number of years i believe that this is the only way to deal with Icelanders because opportunism, cheating and “outsmarting” is big part of the culture, while keeping the word and planning in advance is much more rare than in other Northern European countries. Great Britain still believes the unilateral increase of territorial waters and disastrous effects of it to its fishing industry, now the scandal is brewing because Icelanders overfish mackerel damaging scotch fishing industry. In short Iceland reaps what it saw and should think about changing their attitude, because friendship in Europe is understood as working together and not as trying to “outsmart” (i.e. cheat) the partner. it is sad to see common Icelanders and immigrants suffering in this crisis but next time they should think whom they elect, realize they are not alone in the world and understand that their sense of superiority does not match the reality.
“Iceland, its government or banks, were unable to raise the 200Million so that the UK could take over the depositors itself.”
True then, but the Dutch are willing to lend IIRC £1.3b to cover their savers and the UK was willing to lend £5b to cover theirs.
Now, we don’t know on what grounds the Icelandic government refused that £5b. There was talk about the UK trying to force them to take on debts that they weren’t responsible for, which was interpreted as being over and above the EEA guarantee. Given the current situation where they appear to be trying to avoid liability for the EEA guarantee, it’s possible that that’s all the UK wanted covered. After all, £5b is 300,000 * £16,667, or roughly the EEA guarantee level in pounds.
Alan,
I posted elsewhere, but there either was a run on Kaupthing Edge on the 7th/8th or there would have been on the 9th.
I know, I was there and my money was out on the 8th. You only have to look at how long it took ING to clear the logjam of transfers out that were submitted before KE was transferred to them.
It’s too bad Iceland’s President thought he had, quite gratuitously, to insult the Ambassadors of all the Western countries represented in Reykjavik, including his host. This story has been prominently played in the media of all the Nordic countries, making him a laughingstock and further diminishing Iceland’s reputation among the very countries it has called upon to aid it.
Epok
“bristish/german/dutch people and the other…Sweep your doorsteps…before attacking us.
Here is a small link…Just look at the graph to know how much your local bank has invested…
http://contreinfo.info/article.php3?id_article=2341
Thats a very good chart, but apparently a Icelander would look at that chart and not notice that the very worst bank, 5.5 times worst than the biggest UK bank, was Icelandic.
Kaputhing were as monumental disaster waiting to happen and in Icelanders eyes, Darlings sin was to tell the truth – *after* the banks had failed.
As Bromley86 points out, there was a massive run on all Icelandic banks in the days before Darling said anything. Thousands of depositors never received their funds that were indicated as being withdrawn days before Iceland took control of the banks.
On Nov 12, 2008, Julia Set said:
Not so fast Nicholas.
“Even before the crisis, PERSONAL debt in Iceland has been amongst the highest in the world for years, reaching 213% of personal disposable income. In the US, with all of its current problems, it was still only 140%; in Germany about 100%.”
…………………………………………………………………………………
I believe you might have got these figures from
http://www.economicshelp.org/2008/10/problem-with-iceland-economy.html
I believe the GB figure for personal consumer debt to be GBP 220bn in mid 2007
I saw a figure that the personal bank account overdraft in Iceland in Sept 2008 was €750m
In the 20 years up to deregulation, Icelanders had a high personal debt because they had to.
Many had to take quite a few personal short term loans in order to buy a family home.
Mostly there was high employment at lowish salaries and people just worked hard to build their life in those early years. And all loans were, and still are, index linked with inflation.
Julia Set said: “The bankers could have been more prudent. So could the population. It’s easy to label the “bankers” as the greedy ones. No one was forced to borrow so much. The greed lies as much with those who chose to buy and consume as much as they possibly could”
By greed, I assume you mean the consumer debt. I wouldn’t argue against that. But most of the peoples debt is in inflated value property mortgages, like most other countries.
If you deposit money in a bank you expect them to act prudently and not to create out of fresh air 10 times the amount deposited and loan it out to kids to buy fizzy drinks and cars.
It is the banks job to be responsible and prudent and protect its savers and shareholders from the desires of the reckless masses.
I don’t understand the consumer debt because personally I associate boom time with the opportunity to eliminate personal debt and any consumer items are purchased with cash. This was a boom time built solely on credit limits being extended, I suppose like anywhere else but more so.
It appears to escape people who come here to troll, that the average Icelanders have not had their debts written off, mostly those personal debts and mortgage debts will have to be paid up by the individuals. And now those debts are multiplying in value.
Usually it’s the big investors/companies whose insurance policy is their limited liability, can write off their bank loans or just let the loan roll over with the lenders complicity.
I also think Iceland is losing all their credibility by playing these funny games. A U-turn would be the most sensible thing to do, tell how things really are and sit at a table with the EU solving the crisis once for all. But this Ice government won’t do any such thing, they are not willing to take any responsibility, they won’t pay, no. Forget it. Shameful how they keep using their own people to play this game. When all the credibility is lost what remains? U-turn if you can. I am really sorry for the honest icelanders
Queerish, and you sound like such a wonderful person. I can’t imagine why the Icelanders didn’t like you.
Queerish said “Good I got out of that ****hole in time.
im glad you went to…
“But all the media there is controled by one company, which also control most of the other companies, and which as very close connections to the government.
Icelanders have to read foreign newspapers to know the truth”
we have RUV tv and 2 radio stations owned by the state
and we have 365 several tv and radio stations who were ovned by a lot of people and companys but ran into trouble recently and the media part of it was bought by Jon Asgeir Johannesson and any one who wants to can buy a share, Jon Asgeir is no friend of the government, he is in fact David Odssons worst enemy, David would have liked to see 365 fall
“Icelanders have to read foreign newspapers to know the truth”
you cant know the truth unless you have all the information regarding the matter,
newspapers can only tell you what seems to be happening at the time, eventually some of them will most likely print the truth,once its clear
in to many cases newspapers are like politicians and bankers, not to be trusted,
maybe someone will print a truthpaper some day
that always tells you the truth, if so you will be reading about it in a newspaper.
suomi
This story about the president isnt as dramatic as some newsmedia make it out to be, we seem to be popular in the media now, somewhat like Michael Jacson, if someone printed that Jackson suddenly went black again it would sell some papers, people want drama, just turn on your tv and see for yourself,
we are closing down embassys now all over the world
3 to day and more in near future
Truth is, the Icelandic goverment can’t pay them, and they will probably never get the agreement to pay them.
To be able to take an foreign loan, it needs to go before the althingi. You can guess what will happen if people are faced with the option of paying a loan for up to 100-200 years by their kids in proxy of private company’s(operating through the faulty EFTA treaty) gone bust and a disfunctional goverment.
If you check out the EFTA treaty, it states that a goverment has an options in case of emergency.
If they didn’t do what they did, I would probably be fishing with my rod right now and out of work. if I’ve ever seen emergency, this is one.
But in any case, if they are not going to talk this through, then I guess there is nothing else to do to let the local banks default with the others, and go the UK/Holland route, which is we will all be loosing a lot more than we already have.
And in my case, I wont be loosing anything, exept my reputation as an Icelander, since I didn’t take any loans, don’t own anything and will be moving my ass as most younger people who can, will, since living here will become unatainable.
That’s Global cooperation for ya and free economy gone wild…..all hail the money printing machines.
“If your people knew how to run a country properly, this would never have happened.
I have absolutely no sympathy for Iceland or Icelanders.”
Now, come on, Queerish, I can understand your negative feelings, the reports about the “Iceland for Icelanders” movement or the anti-Polish website created by a stupid 14-years old did disturb me, too. But on the other hand, it’s also a fact that 4000 people protested recently, and that’s more than one percent of the whole population. Imagine 9 million Germans demonstrating, or 7 million Brits! That’s huge. And it shows that not all Icelanders are one and the same. For instance, Haarde’s party only got 36.6% of the vote. And even though the Social Democrats formed a coalition with him, the party landscape evident in the 2007 election results show that there’s a very diverse range of opinions.
One other important point: Iceland’s population is only as numerous as that of a medium sized European city. This brings a lot of problems of its own. In my hometown, which is a bit larger than that, there’s only one company controlling the newspapers, too. And I don’t think our local politicians would be qualified enough to handle a 20 billion dollar economy. Especially when there are three major companies who provide most of the taxes and can pay much higher salaries than the administration. This has to result in those heavyweights having an extreme political influence in such a small community. And so, greedy managers can apply a lot of pleasure on the governement to support those economic policies that will allow them to become multi-millionaires in the short run, regardless of the long term risk. It’s this group of selfish managers which is to blame in the first place, and the gang of clueless, irresponsible politicians. They should have known better, and many of them did, and they had the power to change course, but foolishly or deliberately chose not to.
This is not to say that many Icelanders who supported this madness are not to blame, too. But it’s really unfair to say the majority is at fault. Let’s not get carried away by fingerpointing at everybody, let’s put the blame where it really belongs: At incompetent Haarde and his gang and the greedy managers.
Queerish
the media in Iceland does not a good conection with the goverment, the goverment has been trying to stop the media owner for several years, believe me there is no love lost there, and about reading press from abroad, hmmm let me think should i go down to the store and buy the news of the world or sun or star you cant trust any press at all
It’s understandable that spleens must be vented given the situation (although in Alex’s summing up, it seems all is rosy and there’s nothing to worry about).
However, I hope the comments above are read and understood because in the main (and apart from the odd hothead) they represent the broad view of the Icelandic situation from outside the country.
That most opinion from within the country seems to be full of resentment at it’s “friends” reaction only fuels the anger of those who’s finances have been decimated by the criminal incompetence of the fools who have been running the show. The same fools who are still at the helm – a fact that leaves most other incredulous.
Perhaps Iceland should ponder on how friendly it has been to others. It’s been a precocious upstart – leveraging itself to ludicrous proportions whilst buying up huge tracts of foreign companies and when finding itself bereft of liquidity, tries to recover the situation by sucking in foreign deposits into an already doomed banking system. Meanwhile your president lectures the UK on how it could be as rich if only it had Icelanders’ ambition and intelligence. You think he had “a good week”? Everyone else thinks he made a complete idiot of himself.
And you wonder why other countries are reticent in pumping even more money in?
(Almost) nobody wants to see ordinary Icelanders destitute. We, however, have pretty desperate situations of our own. There isn’t any spare cash around.
What goodwill there is for the country is being frittered away by the continual PR disaster that is Haarde & Company.
There is obviously no easy way out of the current situation. What is being discussed is how to divide the cost of mistakes made by Icelandic regulators and politicians. It seems that most of the cost will be brunt by the Republic of Iceland as it should be. The Icelandic government has shown in several instances how completely incompetent it is when dealing with problems of its own making. A Russian bailout ? Just mentioning that shows how different Iceland is from Scandinavia. And there are several other differences as well, negative ones I must say.
Iceland as many other small nations in reasonably good geographic positions have attempted free ride in different degrees. This time around the combination of reckless macro management and a much more diifficult economic environment everywhere else has put the country in a corner.
HI HI ´
Firstly I just wish to say how grateful I am to ICENEWS, I think most of us will agree these forums and news updates is a place we all like to visit and enjoy the interaction, even though at times it isnt always friendly.
One thing which no one seems to of raised here is the BIG PICTURE, No one in the world actually makes or produces anything anymore, So much of the worlds business and trading is just done on paper, which in turn created part of the problem, sure someone did this or didnt do that, BUT when we look at what we do as a Human race it is pathetic in comparing to how we used to build or make things.
In short there is too many people, too much artifical money and not enough wholesome trade and manufacturing, Sustainable Development is the answer in my opinion but I guess I´ll be dead and buried before people start really being pro-active in that area.
I’m Spanish and very happy to see Iceland go bankrupt. I was sick and tired of the unrelenting criticism towards Spain and the southern European countries from the so-called developed Nordic countries.
It now seems that Iceland was nothing else but a northern Sicily with a mafia-like government, a nation of reckless speculators that instead of working, partied all day long and took expensive shopping trips to London and Paris.
Welcome to reality and stop whining. If you need cash, come to Spain to pick up oranges, together with the thousands of immigrants from other poor countries, like Senegal, Morocco and Pakistan.
http://www.tv1.is/hik/
Some of you may like this link, It is a page with several comical aspects of Icelands situation.
I find it outrageous that the European Union does not give that comparatively tiny loan to Iceland after France and Germany alone took more than 100 billion out of the European Central Bank with the outlook of many more billions to come.
The obvious reason for this is to force Iceland to finally join the European Union… which i always found easy to understand why Iceland would not want to.
With the Lisbon Treaty, undemocratic procedures in the EU parliament and the European security laws, the European Union increasingly looks like a fascist takeover. I certainly don’t want to be a part of that anymore.
If mr. Queerish is angry with Iceland and Icelanders
is very far from my opinion. I’m suffering for Icelandic situation, being I falled in love for this Country. If my memory helps me, Iceland had about 30
years ago another great crisis…God bless Iceland and
Icelanders.
The real shame is that british, dutch, german and belgian depositors are supposed to be happy with the shameful amount of 20.000, while most Icelanders in the meantime have not lost nearly as much.
Even though I feel sorry for Iceland and the icelanders, I think it is a shame how they fail to take over the responsibility for the actions of a greedy elite of bankers and politicians, instead they whine about illoyal allies and the ‘evil British government’.
Responsibility would mean to pay back foreign depositors, even if that means that icelanders have to increase the number of flatscreens in their appartments and the number of ridiculously expensive Range Rovers in the street of Reykjavik.
ICENEWS on the President Grimsson
“His frustration with Iceland’s traditional allies is shared by many of his countrymen. His invite to Russia was probably only designed to shock and promote debate (which it has). And his declaration that he, and all MPs, should be paid less because of the financial situation proved very popular. All-in-all, a good week for President Olafur.”
—————————-
You can’t be serious.
I might have accepted the President’s comments about inviting the Russians as harmless banter but he is not capable of black humour. He is actually serious.
The man is a liability in attempting at least a small diplomatic repairing of the image of Iceland abroad.
When he has an opportunity to be contrite and put Iceland’s troubles into some perspective he
escapes into an deluded fantasy world of denial.
This is not the first time he has demonstrated his myopic arrogance,
check out a speech he made to some business club in England 2005.
http://forseti.is/media/files/05.05.03.Walbrook.Club.pdf
Knowless – is this a real speech or a piss-take? It can’t be real, surely.
@ Britt
I presume you do know that many Icelanders have lost money they had in Icesave and other banks here ?
Investers are suffering here aswell as Holland and the UK etc, I know one girl who´s entire Inheritance has gone & an elderly gentleman who was nearing retirement who now is having to continue working if his job is still there !
Minorities creating problems for the Majority : (
Britt. I think that you’re missing the point. Icelanders have lost a lot.
a) The economy is screwed. Seriously. Despite all the talk of migration, the only people who can get out are those with nothing, which is not the best way to start a new life abroad.
b) Stockmarket-based investments (especially bank shares) are now worth a fraction of what they were. That presumably includes pensions, although you might reasonably expect them to have diversified out of Iceland, so they’ll benefit from a good exchange rate when repatriated.
c) The government may have to borrow to fund that 100% guarantee of Icelandic deposits (unless they really are going to try to do that from the assets of the Oldbankis, which I can’t believe). This depends on whether the government can move depositors to the head of the line – I imagine creditors will have something to say about that.
d) All those foreign currency basket loans to individuals and institutions have increased by 100-200% due to the exchange rate.
It’s pretty bleak short-term. Of course, the Icelandic government has made everything a lot worse by not clearly honouring the guarantee. As it stands, it looks like the government is trying to get out of that, otherwise why would the Dutch be blocking the IMF loan (they had negotiated a loan in exchange for the Icelandic government guranteeing the first ~20k euros of Dutch depositors).
BTW, this looks like a good, non-partisan summary of what happened and where it’s going:
http://www.voxeu.org/index.php?q=node/2549
Jim,
O Yes It Is!
I heard Olafur Ragnar on BBC World Service at about the same time, and his general tenor was We’re Ever So Clever, We’re Beating You At Your Own Game.
Not so clever now! The tragedy is that lots of ordinary Icelanders are suffering, and are going to suffer, while the moneybags will emerge relatively unscathed with plenty of dosh left to fund their lifestyles.
And the Icesave savers who are still waiting for their money, I understand.
@Knowless – that’s a great link. Wonder if he would like a return visit especially to discuss items 3,4 & 5.
He should write pantomime scripts – he already has Baron Haarde-up.
“I find it outrageous that the European Union does not give that comparatively tiny loan to Iceland after France and Germany alone took more than 100 billion out of the European Central Bank with the outlook of many more billions to come.”
Oliver, our banks have already given 21 billions of credits to Iceland! This isn’t any spare change, and it creates financial problems for our homecountry. Of course, in order to assure that those loans can be paid back some time in the future, Germany has an interest in keeping Iceland’s economy afloat. So spending another few billions in order to achieve that would be reasonable. But what we certainly don’t want is throwing good money after the bad! There have to be reassurances that Iceland changes his economic course and does its part in trying to reducing the damage to foreign investors as much as possible. It can’t simply be that billions are spend just to be used by Haarde and his gang for their political gains, without any regard to foreign interests or long term sustainability. Those moneys have to be used to accomplish a structural change, they can’t be a simple subsidy to absorb the impact of the crisis on Icelandic households.
Sadly, Haarde, Oddsson, Grimsson and the rest of the gang don’t seem to grasp that they have to reach for a compromise. European nations won’t simply leave their citizen alone with the loss of their Icelandic deposits, they have to care for their constituencies, too. It’s not only Haarde & Co who are concerned about losing face, other governments have to care for the political impact of the crisis, too. This makes negotiations difficult, and requires careful diplomatic tatics. If the Icelandic officials would be capable of this, the Gordonian [sic] knot could be untied, credits would be given, and there would be a chance for a succesful long term solution. IF.
Very good find, the summary you linked, thank you Bromley! A must read.
And imho this may give a hint at what may be one reason for the IMF to hold back credits. It’s really the missing independence and inheric incompetence of the central bank, personated by the chariman of governors, Oddsson, that is a dire problem. Simply changing the interest rate isn’t good enough, there have to be structural and personal changes. After all the inaction over the years, the international confidence in the central bank is zero, if not even negative. Possible foreign creditors don’t have any appreciation for Icelandic politicians closing ranks and defending each other’s jobs at a time when the future of the whole nation is at stake. Changes are necessary, and political loyalty can’t trump the overwhelming importance of keeping an economy afloat that provides the living for 300000 people.
Really, no reasonable creditor would take the risk to believe that the same officials who supported a failed economic policy for years will be able to manage a complete turnaround. But the Haarde gang still calls for continuance of their “stable and experienced government”. Which begs the question, do they really not see the writing on the wall, or do they not want to see it?
A couple of things are now becoming increasingly clear and obvious:
1. The customers of Kaupthing Edge and Icesave need to get their money back. Otherwise a lot of confidence in state guarantees will be lost. This is a conditio sine qua non.
2. However, it is equally absolutely clear that Iceland simply does not have the money to provide the fund with the necessary resources to do this. At least not in the short-term perspective.
Hence, it is inevitable that those other European nations where KE and Icesave were active fill the gap. That, however, means that Iceland must surrender (sorry to say so) some aspects of its traditional policies, must be willing to consider EU-membership seriously and must, I am afraid, understand that her alliies and other comparatively powerful European countries such as Sweden, the Netherlands, Great Britain and Denmark are certainly not trembling when her president makes silly remarks in front of foreign diplomats.
A rich and not uninfluential country like Denmark that provided Iceland already with an important swap-agreement will maybe react to such ‘threats’ with a ‘wtf’-attitude. Sorry to say so. It’s Iceland that needs help, it’s not Denmark or Sweden or Britain or the Netherlands that need the help of Iceland. I suppose that’s called realpolitik.
Another point: No offence intended, but whereas Iceland is a large country it has only a tiny population. Is it perhaps (only perhaps!) possible that Iceland does not have the necessary pool of outstanding and excellent experts that is required in a crisis like this? Reading the rather outrageous remarks of Iceland’s president I slightly doubt it. Maybe Iceland should ask for technical help as well to deal with this crisis? I know to do such a thing is rather humilating but then again, I suppose it is also an honest move and would be welcomed as such internationally. I am sure, close and very good alliies like Denmark will be happy to help you.
Having said all that, I am convinced that the outlook for Iceland is rather bright once it has managed to deal with this crisis – which I hope it will be able to do. :)
There can be no doubt Geir is losing it!!!
http://www.business.dk/article/20081112/finans/81112027/
I can translate the most worrying parts if anyone is interessted.
Very troublesome news from Iceland:
http://www.business.dk/article/20081112/finans/81112027/
I can translate the most worrying parts if anyone is interessted.
It looks like Geir is losing his marbles!
“is this a real speech or a piss-take? It can’t be real, surely.”
It’s also posted at Icelandic magascene website Grapevine.is, and not on April 1st, so I believe this is real:
http://www.grapevine.is/Features/ReadArticle/How-to-Succeed-in-modern-business-Olafur-Ragnar-Grimsson-at-the-walbrook-club
I’ve linked that repeatedly, too, because it begs the question: Icelanders, when you read this speech by your own president, boasting of “Viking” successes and ridiculing others, do you think he made ANY friends with that?
However, I have to concede that there’s one sentence in the speech that hits the nail with its prophetic outlook:
“You ain’t seen nothing yet”.
Indeed, indeed, Mr. Grimsson.
“I find it outrageous that the European Union does not give that comparatively tiny loan to Iceland after France and Germany alone took more than 100 billion out of the European Central Bank with the outlook of many more billions to come.”
Thats the benefit membership of the EU. EU members are friends who are supported in their time of need, for other nations the EU helps with discretionary charity.
Iceland apparently though that they are friends with the EU nations but they are fundamentally not, as they rejected EU membership. They took the trade benefits but gave nothing back in return.
Can anyone point to act of friendliness given by Iceland to the UK? All I can come up with is the Cod wars, stealing billions from EU depositors and throwing insults at them when they asked for the money back.
Peter….
Never mind the cod wars…what about Bjork?
Must equate to the most unfriendliest act imaginable.
Knowless:
In retrospect, a very interesting speech indeed. I especially liked the
“You ain’t seen nothing yet” bit;-).
“Having said all that, I am convinced that the outlook for Iceland is rather bright once it has managed to deal with this crisis ”
I think you are wrong about that. Iceland has lost at least 65% (in Euro term) of its GDP due the currency collapse. Its asking for and has got massive loans that are way beyond its future ability to pay. 70% of its GDP was in ’services’, basically that will NEVER come back. Its population is going to shrink significantly and unemployment will rocket adding more tax pressure.
The ‘little’ loan of 6Billion euros/dollars is a massive amount of money – its equivalent to being UK unemployment befit for 15years for the entire Icelandic population.
What are they going to spend the money on? shoring up the currency (which won’t work) or food?
Either way, they won’t be able to pay it back.
Any smart people in Iceland will do the same as ‘unnamed’ say “So Long and thanks for all the Fish”
“I find it outrageous that the European Union does not give that comparatively tiny loan to Iceland after France and Germany alone took more than 100 billion out of the European Central Bank with the outlook of many more billions to come.”
Oliver I am actually slightly sympathetic with your point of view as I also think that European countries should come to Iceland’s help, but where does the information that Germany and France have borrowed that amount of money come from anyway? Haven’t heard of that.
After all this comments I see that simple people understand situation in Iceland much better than politicians.
After 10 years of good life they only know how spend the money, not how to save.
They completely don´t know how solve the problems.
So they should abdicate (but they are not enough wise) or Icelanders should learn from Polish people how to use wheelbarrows (we have tradition how banish politicians) -only one way!!!
In 24.10.2008 during phone conversation between Icelandic Minister of Finance and Alistair Darling
where Mathiesen explaining that is no money in insurance fund, so Iceland not will pay even 1ISK
more under www.icelandreview.com/icelandreview/daily_news/?cat_id=28304&ew_0_a_id=314205
I´m totally agree that Iceland should quickly take EURO (if will be possibly), this will give little bit of stabilization,
After that, return money which disappeared
and join to EU to gain major investors.
Cook everything (wait) at least 2 years and will be better.
“Icelanders should learn from Polish people how to use wheelbarrows (we have tradition how banish politicians) -only one way!!!”
Hehehe, Poland! Well, let’s be honest, some of those wheelbarrows has Mercedes stars on them (only joking!), but I think I get your point: Yes, it would really be good if some Icelandic politicians would be driven out of the country! One way ticket only.
Looks like there might be light at the end of the tunnel.
http://www.icelandreview.com/icelandreview/daily_news/?cat_id=16539&ew_0_a_id=315330
If the loan is low interest, then it won’t cost much to service it in the period between it being taken out and when Landsbanki is dissolved. The government will presumably be a preferential creditor ahead of the line even of depositors (who will all have been paid their 20k euros already).
Check out
Check out:
http://www.icelandreview.com/icelandreview/daily_news/?cat_id=16539&ew_0_a_id=315330
I think this solves the riddle of who ‘didn’t honour their guarantees’ and that the Icelandic government is responsible for covering the ca. £20000/saver. It also looks like things will be resolved pretty soon.
Haarde & Co are clowns who were and are seriously damaging their own people alongside people from many other countries – I, for one, don’t want to be beaten to death by clowns!
I do find it sad though, that 70000 Icelanders seem to have gone to quite a length effort (posing as Vikings etc.) to demonstrate against the UK (by the way it wasn’t a ‘terrorist’ law per se…but this is an old hat too) and only 4000 bothered to protest against the clowns who viciously and stupidly destroy their own people and country…
To be fair, the President of the EC saying something doesn’t mean that the lawyers would agree. You can be he’s talked to a few though, so it does make it more likely that that’s the correct interpretation.
Yes, indeed, Jim, decidedly a move into the right direction! The 3.5 billion price tag is high, sure, but with long term credits at low or maybe even no interest rates, it is doable. It’s less than 25% of the 2007 GDP.
Well, this shows that any criticism of the pressure on Icelands government missed the point. Obviously, this pressure was necessary to make Haarde accept that he can’t simply ingore the issue. Imho history will show that this compromise was a very important step ahead: Icesave customers will at least get the guaranteed part of their deposits back, without having to wait for years, and Icelanders can now say with pride that they really stand by their word and fulfill their obligations. Not exactly a win/win situation, but a reasonably good result under the circumstances.
However, it woud be even better if this would be followed by a reform of the central bank. For a successful transmutation and recovery of Iceland’s economy, an effective and competent management of currency issues is indispensable. The way the central bank is organized now, with its triumvirat of governors and the political influence, it is ill equipped to fulfill that role. It would really be good if chairman Oddsson realized this, too, and paved the way for a new structure by offering his resignation. This would spare his nation an embarassing and injuring political struggle and further disastrous delays. Let’s hope that Oddsson is man enough to do the responsible thing.
Hey. Just thought of a side-effect of getting the loan now.
It’d probably be converted at the ECB rate of ~200ISK:EUR, so that minimum cover of 20k euros is worth more than twice as much as it was a short while ago to every Icelandic depositor, meaning that the government has to find less to hit the 100% domestic cover.
“I, for one, don’t want to be beaten to death by clowns!”
Totally OT, Jim, but have you ever seen the spy comedy “Real Men”, starring John Ritter and Jim Belushi?
I guess you would like it!
http://www.imdb.com/title/tt0093828/quotes
“I, for one, don’t want to be beaten to death by clowns!”
Totally OT, Jim, but have you ever seen the secret agent comedy “Real Men”, starring John Ritter and Jim Belushi?
I guess you would like it!
http://www.imdb.com/title/tt0093828/quotes
Icelandic politicians are going barking mad!
http://www.barentsobserver.com/russia-invited-to-icelands-airbase.4525408-58932.html
Now the president have offered Keflavik to the Russians, they declined it :)
Also apparently he was very sharp in his criticism of Sweden and Denmark, for someone looking for new friends he really isn’t helping himself.
The Hummer is the bummer :)
What the president over the years succeeded in doing was jingoistically equating national pride with the actions of the self serving few.
When the President in 2005 referred to the
“Obstacles to their growth have largely been abolished and replaced by an open and wide field where talent, imagination and creativity determine what is harvested”
In other words, the traditional values of banking prudence were abolished in a world wide deregulation frenzy allowing these self serving whizz kids to get a head start and with unlimited leverage using Iceland tax payers as their insurance policy.
Now, not only do the Iceland taxpayers have to pay off their own loans, personal and property, they have pay double /triple /quadruple? that amount to cover an evapourated asset (savers deposits) which was not in their ownership.
The great beneficiaries of that evapourated asset, investment companies like Baugur, are largely immune to the liability.
Where are the great patriotic values of Baugur now, that the President so lauded?
Obviously they are all tied up their mini empire of House Of Frasier and Hamleys etc.
Of course, Baugur say they can benefit Iceland by selling back to Iceland the foreign currency they earn abroad.
There was more patriotism and rationality evident in that Albanian pyramid scheme.
Dear friends, all this talk of Iceland hurrying to join the EU — whyever would the EU want that? The EU consists of member countries, the citizens of several of which have been badly burned by Iceland’s incompetent fiscal authority, crony capitalism and rapacious leveraging of assets. Any EU country whose citizens remained uncompensated could with impeccable cause prevent Iceland’s EU entry. And, by the way, this is not simply a matter of making Icesave depositors whole; there remains at least $61 billion invested in Icelandic banks by foreign banks that is now in default. No, until Iceland resolves this awful mess, it cannot even faintly hope to join a tightly-regulated single-currency union.
One more I wanna add
During 2 years of living among Icelanders I can say that this is very harsh,closed and proud nation (also country). The biggest problem is in their mind.
They have to be open for the world, they have to understand, that high live only from the fishing is not available any more.
This is a country with wide opportunities for the business, so now is time to join to EU and time to build new Iceland with international company.
Knowless: “Icelanders had a high personal debt because they had to.”
What utter nonsense. Larger houses, second homes, summer homes, range rovers, plasma screens – no-one HAD to take those loans.
They could have waited a little, rented for a while saved a bit and not exceeded their means.
Icelanders are the most impatient people on earth and they all wanted to have it as good as the folks next door. They just couldn’t wait. It’s as simple as that.
Don’t make excuses that it should have been better regulated. Iceland is a small place. The bankers and regulators ARE the population or relatives or their friends. Everyone was complicit. Hence the guilt now.
Beleive me many people in Iceland do not want to join the EU,I for one would rather go without than sell my soul.
Julie
And when people took 125% house loans in the uk. What was they thinking ?
And lets remember all this global economic collapse started with our greedy American friends. Why dont you talk tough to them ? Bush & Blair And now Gordon is a MORON Brown.
To Peter – London:
>>>>Iceland, its government or banks, were unable to raise the 200Million so that the UK could take over the depositors itself. That figure would have prevented much of the trouble, with Iceland getting away without being liable for the guarantee.
>>>>From the comments in the phone conversation they (the central bank) looked like they didn’t want to lend the 200million and thought they could get away without backing the depositors guarantee.
Big mistake.
This is one of the more intriguing aspect of what happened during the weekend of October 4-5th before everything blew up.
The owners and management of Landsbanki have in recent interviews with Icelandic media stated:
- That they had been in talks with the UK financial regulators for many months about how to change the Landsbanki to UK subsidiary, so it would be covered by the UK FSCS (Financial Services Compensation Scheme).
- The talks had not succeeded, according to Landsbanki, due to strict requirements by the UK goverment, that would have put the existing loan agreements the bank had into jeopardy (the exact details of this are still rather murky).
- During the weekend of 4-5th October, the UK government relented and changed their position. It offered the Landsbanki management a fast track (5 days) process for the IceSave accounts into the FSCS in turn for payment of 200 million pounds (all UK banks have to pay fees to participate).
- One possible reason for the sudden change of hearts, was that the UK government may have finally realised that if Landsbanki went under, it would have to pay out all of deposits of the IceSave accounts to the tune of 5-10 billion pounds (which is what they are doing now).
- The management of Landsbanki talked with the Icelandic government on Sunday, and this is where the stories diverge. The Landsbanki management says they explained the UK offer fully to the Icelandic government. The Icelandic government, says they heard about the offer, but not the crucial part that all the IceSave accounts would be fully covered by the FSCS. They also say that there was no guarantee that the 200M pounds would be enough.
- Landsbanki did not have the 200M pounds readily available itself and formally asked the Icelandic central bank for a loan. They offered to put up large amount of their assets as collateral (several times the 200M).
- There was a deadline of 12noon Monday by the UK government to respond to the offer. Shortly after that the Landsbanki management received a reply by the Icelandic central bank, declining the 200M pound loan.
- This 200M pound loan request was referred to in the conversation between UK Chancellor Alistair Darling and Icelandic Minister of Finance Árni M Mathiesen, giving at least partial confirmation of the above.
So why did this not work? It is possible that the offer was simply made to late. The Icelandic government had been in marathon meetings throughout week before and during the weekend to try to find a way to save the Icelandic banks and the currency. They may have already determined they just could not save the banks, and decided that any further loans they would give to Landsbanki would be lost. They may also not realised at the time the importance of the IceSave accounts and how large issue they would later become. They may also simply been too tired.
We will not know what the real reason was until later.
It is also possibe that some parts of what has been reported may not be fully accurate. As far as I know, except for the reference in the phone call between Darling and Mathiesen, the UK government has not publicly commented on this aspect yet. And the only commments from the Icelandic government and the central bank, is that they only heard about the 200M loan request and deny they were told about the accompanied IceSave guarantee by the UK government. Landsbanki has said those denials are wrong.
Why would the UK government have wanted to offer guarantee of 5 billion pounds in turn for the relatively low payment of 200M pounds?
To explain that, we need to realize the fundamental reason for offering deposit guarantees. The main reason is NOT what most people believe, that is to pay out to everyone that deposits money in failing banks. Rather, the guarantee is there to make sure they DO NOT have to. If the general public believes their money is save in the banks, they will not rush out and withdraw their money.
No government really has enough money to pay out all the depositors in their respective countries, a sad lesson the Icelandic government has now learned too late. The key thing is to make sure that this does not happen before it happens, which is the reason many government have been raising the deposit guarantee limits in the past few weeks.
Therefore, the most likely reason for the UK government to offer the IceSave guarantee for the 200M payment, was so they could have come out on Monday afternoon with the news that they were guarnteeing all deposits of IceSave. There would therefore have been no reason for the British public to withdraw their money, averting the problem. Now instead, the UK government has to come up with 5-10 billion pounds of real money, to pay out to the depositors.
As mentioned above, many parts of this story are yet not fully known, but hopefully we will find out more later when all the investigations start.
haha the noble brits who can do nothing wrong have come here to preach their gospel. love it.
yes massa, tell me more massa, im so ignorant.
>>>To explain that, we need to realize the fundamental reason for offering deposit guarantees. The main reason is NOT what most people believe, that is to pay out to everyone that deposits money in failing banks. Rather, the guarantee is there to make sure they DO NOT have to. If the general public believes their money is save in the banks, they will not rush out and withdraw their money.
>>>
Thats a very good point, I hadn’t thought of it like that.
@Fishy
>>>Beleive me many people in Iceland do not want to join the EU,I for one would rather go without than sell my soul.<<>>And when people took 125% house loans in the uk. What was they thinking ?<<>>haha the noble brits who can do nothing wrong have come here to preach their gospel. love it.
yes massa, tell me more massa, im so ignorant.<<<
Your post does little other than perhaps comparison between Iceland & Zimbabwe.
I have a kind invitation to a fish supper with fishy – but you would be a more appropriate guest. You may have to become used to fish suppers – and they say Omega 3 is highly beneficial.
“Meanwhile it is looking more and more likely that the British Royal Air Force will be asked not to come and take over Iceland’s Keflavik airbase this December, as had been the plan under the NATO defence agreement. Under the agreement friendly nations have been taking it in turns to defend Iceland’s airspace since the USA left Keflavik in 2006. The leader of the Left Green Alliance described the idea of Iceland being protected by the military of a nation with whom relations are so strained as “preposterous”.”
You have to say this is quite funny, you don’t want the UK to spend tens of millions defending Iceland.
Hmm, ok.
Your post does little other than perhaps comparison between Iceland & Zimbabwe.
more truth from gods people. light a a match so i can worship you.
You have to say this is quite funny, you don’t want the UK to spend tens of millions defending Iceland.
Hmm, ok.
iceburn
@Peter (Germany):
It was all over the German news, that there is a loan guarantee on inter bank loans of 70 billion € (english billion = german “Milliarden” – an common source of mistranslation if that is what sounds weird here) with the bill going directly to the European central bank. Those are actually “insurance” on loans already known to be bad. That is the reasons why the cash flow hasn’t really restarted despite that loan… because most the money is guaranteed to be lost.
France did the same thing on 40 billion, which was also in the news.
Furthermore Chancellor Merkel said all over the news that up to a trillion € (1 000 000 000 000) of all savings in Germany will be saved in the same manner. Funny that they couldn’t find even a couple of millions to keep higher education free and equal.
BTW, following the mechanics of banking, that is by far more money than is in the European Central Bank – only 10% of loans made have to really exist in a Bank and that is true for every bank. What they kinda forget to mention is the huge inflation that this will likely create.
So essentially, they directly stealing our tax money, giving them to the Banksters who charge us interest when we borrow our own money back – if they make the loan, which right now they mostly don’t do – and then other Banksters stealing from us again by interest on the loans in the European Central Bank.
The financial system overall is just a huge scam and our political leaders are criminals for taking part. I can’t express how mad i am about the whole thing.
@Skari
“more truth from gods people. light a a match so i can worship you.”
Worship not required – just money.
its true peter, capitalism works on the principle that your an idiot.
Oliver, okay, I thought you meant something else. In fact, you are making the same point that I made a couple of days ago on this website when the Faroese announced they would grant Iceland a loan.
Though I do not quite agree that European politicians are criminals, Oliver. Actually, I think they did quite the right thing – thanks to the vigorous leadership of Britain and France and inspite of the initial German reluctance.
Terry
My posts do there job fine , That is to poke fun at strung out fools like you !
“It was all over the German news, that there is a loan guarantee on inter bank loans of 70 billion €”
All other the news, yeah? Then could you pls explain to me why a German Google News search for “70 Milliarden” EZB turns up only two hits, which have nothing to do with the story you tell us here?
I suggest you go looking for a source for your information. I wouldn’t be surprised if it turns out that this has been some kind of misunderstanding.
I would like to comment an earlier Spanish comment made by a Pablo, where he nationalistically states that he is “happy to see Iceland go bankrupt” where he states that Icelanders in need for money can get it as the minimized immigrant groups in Spain that are (in reality) kept at bay as slaves to pick fruits.
I’m Norwegian and I’m willing to say on any bright day that I’m lucky to have been brought up in a Nordic country if the alternative was a country in the southern Europe, such countries as Italia, Greece, Portugal or Spain. This is largely because of the social structure and the fabric of our [Nordic] societies. One could probably claim that I’m brought up with a propaganda made of delusions. But the real and almost elitist fact without any modest is that a large majority of people in the Nordic countries agree that our way of running our countries is far superior to that of the southern Europe.
So now you all think I’m hailing what the Icelandic government and nation has done at present and in history, that is wrong. They [the Icelandic government and nation] have not been as modest as the [model] states for “the so-called developed Nordic countries”. It is a virtue to be modest, they [the Icelandic government and nation] were not, and that’s the reality. By this they have not follow the Nordic model, more a proxy US model with unleashed free market, which is most likely influenced by the long American presence at the island.
Since I make the bother for commenting anything here I would also make use of the opportunity of saying there is a time to play the “memory game” of who killed who or not 90 or 60 years ago that this is not now. It is neither not the time to claim who is the more brute “Viking”. This is not the time for nationalistic protectionism [with reference towards Netherland and United Kingdom], nor lashing down at the everyday “Joe” in either Iceland or UK.
For it should rather now be the time for cooperation towards solutions for Iceland and the International financial crunch. Thus faster the ones with power understands this, thus faster a state of normality can be reached. It is not only the political elite at Island that should understand this, but also its counterparts at the EU-conglomerate.
Why isn’t there more openhanded cooperation from EU [read UK] at this time instead of the deep trenches?
Why?
Fishy – “And when people took 125% house loans in the uk. What was they thinking ?”
Your point appears to be that it is some kind of justification that others did similar things. Indeed the British have their own problem, but what others did is a moot point.
It is well known that Iceland’s population as a whole took leverage to an extreme and over-leveraged themselves as if the party would never end. It wasn’t just houses, it was everything.
The result was people splashing their borrowed cash around on overpriced assets that were fundamentally not worth what they were made out to be, owned by people who didn’t really own them, except with bank loans that were guaranteed by the very same assets, denominated in currency propped up mainly by the carry trade.
When the desert trolley comes around, no-one is forcing you to take the biggest slice and you certainly don’t have to take the whole cake. The slice we take is a choice that we each make. The same is true of borrowing.
My point is that in Iceland everyone, not just the bankers, dined willingly at the lending feast and everyone was having a great time. Borrowing had become part of the covet-thy-neighbour nouveau riche culture: you didn’t have it, why wait – just borrow it.
Don’t blame the bankers any more than you blame the waiter and the other diners when you measure your waistline.
@PB
Imagine: iceland government is behaving like assholes, and it seemed to have full backing of the people (70K people signed that famous petition).
Imagine, how should for example british government behave, when faced with arrogant attitude “we have no money so we won’t pay” from a nation whose citizens have much higher standard of living than average UK citizen, which is famous regarding the number of mobile phones per citizen, the new suvs roaming the streets, and so on?
Why should be UK, danish or german governments be lenient when a bunch around Haarde wants to extort the solution, which would hurt icelanders to the minimum (they ordered the banks to do business with icelanders, and forbid them to give any money to foreign savers), and hurt citizens of other countries (savers of icesave…) the most?
What an arrogant prick must be that Haarde guy if he thought that he will get the IMF loan without explaining to his own people, that there will be no more suvs, plasma screens, posh cocktail bars and so on, since their banks managed to bankrupt the economy and took foreign life savings in the tune of billions of euros?
Do you seriously thought that people in UK, Denmark, Netherlands and Germany would accept that iceland is left to “recover”, get a year or two of recession and then continue their extravangant lifestyle with borrowed money, which is used to artificially prop krona value, so the iceland can continue to have biggest SUVs, best cocktail bars, largest loans and most expensive real estate as if nothing happened? And to continue shopping with strong krona around europe’s capitals as if nothing happened? Their own voters would crucify them…
Ok all you Brits think we in Iceland are ALL judged as spendaholic thieves .. Your words ….Right ?
Due to 1 case in the U.K now does that make YOU ALL Baby Killers?
You get the picture… People in glass houses…
JUST STOP JUDGING OUR ENTIRE POPULATION
@Gray:
That is weird, i get
“Results 1 – 30 of about 11,900 for “70 milliarden” EZB”
with many hits being on topic, even on the first page of search results like this one
>http://diepresse.com/home/wirtschaft/finanzkrise/414688/index.do?_vl_backlink=/home/chrono.do<
okay, that isn’t the best source, but how about this one from tagesschau.de:
http://www.tagesschau.de/wirtschaft/finanzmaerkte112.html
So i guess you mistyped something, but if you hadn’t heard of this before, then maybe you should stop getting your news from private television. It *was* all over public law television and newspapers.
Financial fu**ups never exactly happen the same way so no one can say for sure (too much unpredictable human factors), but i expect inflation to reach 20-30% on the Euro within the next 3 years – which doesn’t have to be a bad thing, because this is how things usually get back into balance and a lot of debt is just lost to devaluation.
But the whole system is fu**ed up already on the conceptual level. Many people knew this was coming. I have heard this crisis was coming within 2008 for over two years now and it isn’t surprising that there are some grand winners on this… they understandably just aren’t shouting it into everyones face.
On Nov 13, 2008, Pablo said:
I’m Spanish and very happy to see Iceland go bankrupt. I was sick and tired of the unrelenting criticism towards Spain and the southern European countries from the so-called developed Nordic countries.
It now seems that Iceland was nothing else but a northern Sicily with a mafia-like government, a nation of reckless speculators that instead of working, partied all day long and took expensive shopping trips to London and Paris.
Welcome to reality and stop whining. If you need cash, come to Spain to pick up oranges, together with the thousands of immigrants from other poor countries, like Senegal, Morocco and Pakistan.
—————-
Pablo:
Do you still think as the old Spainish colonial king that so enjoyed riping out fruit of other nations ? Rest assure that Icelanders will not immigrate to your county, so will let the picking up orange job to yourself…
Why you grouped people with darker skin in the picking up orange job? I guess it will be more proper for you to group yourself into the same group.
In Iceland, pubs are closed much earlier compared to many other countries, and in winter it is so cold, you can rerely see much people in the street, so why you get the conclusion that Icelanders are party all day?
No inverstigation, no thinking— orange picking mindset.
“”Ok all you Brits think we in Iceland are ALL judged as spendaholic thieves .. Your words ….Right ?
Due to 1 case in the U.K now does that make YOU ALL Baby Killers?
You get the picture… People in glass houses…
JUST STOP JUDGING OUR ENTIRE POPULATION”"
i agree with this. im gonna judge the entire british nation from what i read in the icelandic news.
I think haarde is very brave meeting the english like that. if they wont stab him they are bound to sexually molest him.
@Pablo:
So because some people in the government of Iceland said something about Spain that you didn’t like, you want all the people of Iceland to suffer for that who didn’t have anything to do with it?
Now that is quite weird, because there are two well known high profile polish politicians (twins) that constantly insult Germany and Germans, but i still fail to see why that means it would justify for me to hate polish people at large, which i indeed have come to believe are mostly lovely and courteous people.
Are you ready to take responsibility for each and everyone in Spain that utters an insult to someone? I can assure you, that will be a lot of blame to take.
and pablo, why dont you be a little more bitter about your lot in life.
“That is weird, i get
“Results 1 – 30 of about 11,900 for “70 milliarden” EZB””
Firstly, you said “in the news”, and so I used Google NEWS search and explicitly said so.
Secondly, you obviously use Google.com, not Google.de (15600 hits). Why??? Are you aware that Google.com produces less results when doing a search for German keywords?
Thirdly, with the sources you cite, you mixed up two different issues. In September, the ECB, or EZB, in German, helped struggling banks with 70 billions of short term credits. Pls note that the ECB as a whole did that, so those are the European numbers, and nowhere it is said that only German banks received those credits. Later, in Oktober, German government announced its rescue plan, and by coincidence it includes 70 billion in short term credits, but this money comes from the German taxpayer, not the ECB. Those issues are not related!
So, like I said, a misunderstanding on your side. Ich bin allerdings doch etwas überrascht, das Ihnen dies nicht schon bei der Sichtung der Quellen sofort aufgefallen ist. Excuse me pls, but is German your native language???
Oh, one more point, the reason why I was suspicious of those “news”. The ECB, or EZB, is an independent institution. German government can’t order them to do anything. So, Germany can’t “take out” anything out of the ECB, and any interbank credits that are part of the official national rescue plan can’t come from that institution, either. So, those “news” don’t make any sense!
Btw, in other sources it is explained that the 70 billions of interbank credits will come from the German department of finances…
Gentlemen,
can somebody tell me :
Total cosonlidated balance sheet of Landesbanki and Glitnir for 31.12.2006 and 2007, as well as
the S&P or Moodys Rating for those Banks at those dates.
Amy…. “In Iceland, pubs are closed much earlier compared to many other countries”
Clearly you’ve never been up here luv – or if your Icelandic, you’ve probably never been abroad.
Pubs and bars are open longer here than anywhere else in Europe – ever taken a walk down Laugavegur at 7 o’clock of a saturday morning???
As for Pablo….. how do I get one of these orange picking jobs you speak of???
I get always surprised and shocked to read comments of superiority and “how good we are”…
This forum is mainly to comment the Icelandic articles, and still you will come with your irrelevant superiority to this site, which shows how egocentric and ignorant you are “Nordic countries”. Sorry for the others, this is a personal attack to “PB” comment.
I read from this Norwegian: “our way of running our countries is far superior to that of the southern Europe”.
How dare you Mister?
This reflection and others, in the Big Europe we are living today and the Big Problems we are facing, does reflect how far you are from the humanity.
It’s very easy to talk comfortably in your houses and just breading wealth. You might even choke in all your wealth and pride, forgetting where you are and where you going!
It’s very easy to compare your self, with countries which they are more than the double of you. I mean Scandinavia all together is not more than the Spanish population.
It’s very easy to be Nº1 in Global peace, Nº1 press freedom, Nº1 Human Development, Nº2 GDP…, and having only 4 millions of citizen with the main resource: Oil.
Still, you don’t find happiness. To forget your emotional misery, you buy (Nordic countries are deeply hooked in materialism); you get massively drunk in weekends; you are the most addicted to gambling; you live for the work and when you have time, you flight to holidays to Southern Countries; and when you had enough of your lives, you suicide (Norway and Iceland are Nº1 in suicides rates).
HOW DARE YOU, comparing your nice Nordic life with countries who suffer with wars, social cleavages and dictators.
HOW DARE YOU, living in your hypocrite wealthy life and let the third world getting poorest. Recently Norway lost more than 20B of euro in sovereign wealth fund, enough to care and treat all AIDS in Africa.
“You Nordics” (at least those who proclaimed them self) the “Superior Race”, still misses what southern counties have: the stamina and the simple pleasures of life.
Any way if you are so good and so better, why is not even a single Scandinavian country attending the 15th in the G20 meeting…
RESUMING: I UNDERSTAND YOUR FRUSTRATIONS. IT MUST BE HARD TO BE THE BEST BUT NOBODY CARRYING YOU ;-)
I wish people would refrain from insulting each other in broken English.
It sounds even worse than when done with elloquence and only makes matters more poisonous than they already are.
Thank God some people have finally dragged the USA into this. It’s about time, right? I am an American and I was starting to feel left out! Well, actually I am an American of German ancestry, which isn’t unusual, because 70 percent of all White Americans can claim some sort of German ancestry. Which is why the USA turned over Poland to the Soviet Union: We needed to finish Hitler’s business. The US flew day bombing raids out England, so that at night we could bomb England while they weren’t paying attention. We used German scientists to help us make an atomic bomb to that we could cook Japan. And, with the Germans, we went to the moon to set up anti-Spanish bases there.
COME ON PEOPLE!!! THIS IS ABOUT ICELAND AND HER PROBLEMS. CUT THE CRAP AND GET FOCUSED!!!
Gray and several others are making very cogent points and seem to represent good reasoned thinking.
Iceland is in dire straights. And, with as many good Icelandic friends as I have, and want to keep, I must say this, a new American saying: IT’S TIME TO MAN-UP AND FACE THE MUSIC. You are the primary ones who need to see that you made your problems, and now you need to make your solutions. Until the world see’s you taking on a little more leadership with all of this…the world will keep it’s distance.
This makes me sick. I have no answers. And I am really afraid that the troubles for the average Icelander have just begun. Whatever you guys do, it seems that you need to do something different. I would hate to see your children starve while your PM twirls in the wind…and your central bank sinks into the Atlantic. If you need to replace your government…do it. Just stop telling saga’s and do something… I am hoping the world will follow you if you do.
At least I stand ready to send food to my friends if they need it. I sure hope they don’t.Z
orchafine:
“Das war eine grausame Salbe”, as they say in German.
I’m sure that nothing I’d ever write as a Norwegian/Nordic would calm your anger, so I just have a question for you: When you managed to get so many facts about “Norway ratings” right ( Nº1 in Global peace, Nº1 press freedom, Nº1 Human Development, Nº2 GDP… etc.), why didn’t you check the statistics, too, before relying on myths about our suicide rates? I’ll help you out:
http://www.nationmaster.com/graph/hea_sui_rat_mal-health-suicide-rate-males
http://www.nationmaster.com/graph/hea_sui_rat_fem-health-suicide-rate-females
As you can see, Norway (and Iceland) is VERY far from being “Nº1 in suicides rates”.
Maybe because our “emotional misery” is also a myth? The fact is, most attempts to evaluate people’s general sense of happiness in the world usually rate – again – the Scandinavian countries on top. Here’s one list to prove it:
http://www1.eur.nl/fsw/happiness/hap_nat/nat_fp.php
Goodness gracious – all the Nordics are rated well ahead of Spain!!!
Most Norwegians and Scandinavians love Spain – we travel there in droves; buy homes there. We admire your lifestyle, love the climate. But as far as the organization of our societies is concerned, there are simply too many facts and figures to substantiate that we have, at this point in history, every reason to be happy about what we have achieved. And really – size has got very little to do with it!
“I wish people would refrain from insulting each other in broken English.”
You are referring to Orchafine only, in the beginning he kept calling everybody racists especially icelanders. Until some wise guy, asked him what he was when he kept labelling an entire nation as rascists without any proof.
Orchafine: get real please!!
“It’s very easy to be Nº1 in Global peace, Nº1 press freedom, Nº1 Human Development, Nº2 GDP…, and having only 4 millions of citizen with the main resource: Oil.”
This also applies to several Arab countries many of these doesn’t have democracy, many of them have no freedom of press, torture is very common. So please quit you worthless comparisons!
Alfisti, good point.
By the way “Eloquence” is spelled with one “l” :-)
Just my final words on this, before i move on.
Yes, the 70 Billion obviously come from German taxpayers (which i stated so), that is right. The problem is: The german Taxpayer does not have that amount which is obvious by the fact that the annual financial plan was arleady only doable with a loan. Heck, it is a huge part of GDP, so of course we couldn’t possibly have that wad of cash lying around.
So what does the department of finance do? They get a loan from the EZB, which they don’t own, that is right – it is de facto even a private bank – which we will have to pay back with a huge amount of interest.
Now, you can look at details of the EZB – they don’t have the amount of cash they hand out either. That isn’t a surprise, that is the design of the financial system and that is what every bank can do. For 1€ they have, they can loan out 10€. They can even do that with gold, which is why gold right now is only an stable investment if you actually get the real gold, not the gold that only exists on paper.
The point is: no one has the amount of money that was given away – it is a huge amount of newly created money which means big time inflation.
But the credits didn’t help (quite obviously and not surprising at all – they merely filled some holes that where already there). So we come to the rescue by insuring inter bank loans with even more tax money to restart cash flow.
So the next thing that happens is the banks get rid of their bad “financial products” which they basically know are worthless, default on them and let the taxpayer come to rescue again.
The only one that loses in every case is the tax payer. We get stolen from in the form of EZB interest and then we get stolen from again in the form of inflation.
Now the Banksters say: “Oh come on, look, it is not a loan, it is only insurance, no cash is handed out to anyone.” (and i refer to the inter bank insurances here, not the 70 billion loan, that was actually handed out.)
That essentially would be true if all the bad “financial products” which we know for fact are bad, suddenly become good “financial products” – so all we need is a wonder, then everything will be fine.
I know, I’m now the tinfoil hat for implying that the banks are actually capitalist entities that might have other priorities than the common good and i don’t actually care anymore if anyone believes me or not, but we haven’t seen anything yet – things will get a lot worse.
@Pablo who were hoping Iceland would go bankrupt? Have you ever paused to wonder what will happen to Spain if Germany(EU) stopped paying your bills?
Good point Mister Kristofer Torkildsen.
I can see by you German knowledge you are an adept of philosophy and Paul Feyerabend :-)
I met Nº1 suicides in Scandinavia. Which looking at official stat I am obviously wrong. Finland comes first, and if we take in consideration the Baltic into the Nordic countries, they are unfortunately ahead.
About the Nº1 in OCDE, I joint you in your comments. Japan and France are in the non-prestigious top.
About the Arab countries from “theblob”… I let Arabs talk by them self…
My last pointless words… all those insults and miscarrying words are just a reaction of an action from comments before. We can’t expect to respect each other cultures commenting with superiority above others. Unfortunately or fortunately they will be always some one trying to put you back down.
I’ve been following Iceland’s tragic story for months. My heart truly goes out to the people of Iceland. I’m dismayed by a lot of these posts that demonize Iceland. They are totally unwarranted and mean spirited. Hedge fund firms and investment banks, like the defunct Bear Sterns reportedly conspired to derail Iceland’s economy by destroying the Krona. It seemed that their plan succeeded beyond imagination. (Bloomberg and NYT has written articles about that in case you wonder where I’m getting my info from). While the Icelandic bankers may have made some very imprudent decisions, they are no worse then what the banks around the world have been doing. US banks have made really stupid decisions with their casino mentality; and the US taxpayer is forced to bail them out while these banks can bake their books. The US and other G7 banks have taken criminality to an art form. Iceland, like Brazil, Hungary, Turkey and Mexico are paying for the ineptitude of the G7 countries and their financial institutions. High growth and emerging market currencies like the Hungarian Forint and the Brazilian Real have been trashed. I think the Iceland’s President is spot on about inviting Russia to Keflavik. That would teach Iceland’s fair weathered allies a lesson that they will never forget. It’s like the old Phil Collins song back in the eighties where the lyrics talked about somebody drowning and a person who stood there not lending a helping hand. So to the people of the G7: before you go judging Iceland, you need to look in the mirror. With love to the people of Iceland. Keep your heads up, this too shall pass!
@Sean, US
I think more at issue here was the behaviour of the Icelandic government during and after the banks had gone belly up. Nobody here denies that other banks from other nations have also been on the ride. The point though is that nobody from any of those depositor banks lost anything because governments were willing to back them up and adhere to international agreements paying depositors. The same cannot be said of Iceland. They illegally gave preferential treatment to their own depositors effectively channeling foreign funds to Iceland. As for your drowning analogy, i think it’s probably more akin to watching the burgular that just stole everything in your house drown. I for one would be more than willing to watch a while before walking away.
,Kam said: “The same cannot be said of Iceland. They illegally gave preferential treatment to their own depositors effectively channeling foreign funds to Iceland.”
You of course have access to some direct factual reference for this statement
or do you just make all this stuff up as you go along your daily troll.
Knowless:”You of course have access to some direct factual reference for this statement or do you just make all this stuff up as you go along your daily troll.”
Simple, Icelandic bank customers can access their bank accounts, 500,000 EU account holders have their accounts and funds frozen.
How more clear could it be?
Sean, US (the south) said
“I think the Iceland’s President is spot on about inviting Russia to Keflavik. That would teach Iceland’s fair weathered allies a lesson that they will never forget.”
Maybe on the surface it looks like a good wind up for the NATO allies but essentially the President has lost the plot (actually he never had the plot). He played this card when most sensible people had dismissed it as a black joke ages ago. The card has no value because the Russians can not come, even if they wanted to and even if Icelanders rolled out the red carpet. It would be regarded by NATO as an act of serious aggression and Russia is not ready to confront an “ultimatum” to stand down.
The stupidity of the President became more glaring when he played this worthless card after berating his Scandanavian hosts. It was all very embarrassing pantomime for Iceland´s diplomacy.
“It’s like the old Phil Collins song back in the eighties where the lyrics talked about somebody drowning and a person who stood there not lending a helping hand. So to the people of the G7: before you go judging Iceland, you need to look in the mirror. With love to the people of Iceland. Keep your heads up, this too shall pass!”
People applying some rationality can work out that this is also a Global Economic problem, can understand that there a quite a few “rich” countries who are just a couple of collapsing institution away from an very icy chill themselves. There are some idiots who come on here with nothing better to do that trolling. As our exPresident has said, nobody has died and Iceland will eventually be able to meet its debts. It would be nice if we were left in the position to be able to do so.
“So what does the department of finance do? They get a loan from the EZB”
For heaven’s sake, NO, they don’t! This is NOT what was reported, and it doesn’t make any sense at all. Really, where do you get all those strange ideas? This is really embarrasing.
Sry for getting a bit enraged about this, but details are important, and if they get mixed up suddenly huge conspirace theories emerge, based solely on hot air.
In the heated discussions here most of us tried to argue with hard facts, and despite all the emotions involved, I think it is obvious that this resulted in a better understanding of the other’s view, on both sides. Imho this was the result of staying on topic, and not spreading false facts. So, again, excuse me pls for straying from the issue here, but I got a bit enraged about the distorted view of the ECB that was presented here.
And now back to our regular program!
:-)
Brief point, bottom line…
I find it hard to fault the relative “have-nots” for wanting a chance to better their lives, or simply take advantage of a good offer. When “the haves” offer you a loan and contract that they claim will work out for both parties, THEY are the ones responsible to hold up THEIR end of the bargain when things go wrong with THEIR system of asset management. “The haves” knew this was coming. It is clearly the lenders who did not manage their assets appropriately.
Mark in the USA >> You would be right if you were talking about the USA.
But in a country of 300.000 the haves, the have-nots and the lenders are all friends and family.
On Nov 14, 2008, Peter – London said:
“Simple, Icelandic bank customers can access their bank accounts, 500,000 EU account holders have their accounts and funds frozen.
How more clear could it be?”
I understand that easy enough, Icelandic accounts were not frozen.
I asked for evidence that foreign money in those days was being channelled to Iceland here to keep Iceland’s saving accounts unfrozen.
AFAIU the Iceland saver can access their accounts without any foreign funds being diverted here to support that.
Even foreign currency accounts are paid out in ISkr
Knowless
The New banks have been given 2billion euro’s assets – that actually belongs to the foreign depositors and debtors. None of it should be accessible by anyone until the receiver has distributed it.
Peter. In a perfect world, however the Icelandic government had to do something to stop the local financial system grinding to a halt.
I’m not saying that this was the only thing they could have done, or that they handled it well. I think it’s apparent that they would have had a hard time handling it worse.
But here’s the point. If you’re winding down Oldbankis (I know, they haven’t and that’s part of the problem, but ignore that for the moment), then what difference if they have an extra (say) 2b euros in net assets or if they have a government guarantee (again I know, I know :) ) for Newbankis to pay Oldbankis that 2b euros?
BTW, and please don’t take offense if you read this Alex, I’ve been wondering. Is there a cultural reason why the boy in the Executive pic at the top is brown? Skraelings and all that.
I know the first lady is Jewish, so that’s probably not an issue.
Bromley86:
Thanks for your question. The colour of the boy is of course not an issue: it is just a fun picture.
He’s a boy looking somewhat confused and wearing a suit – How the viewer interprets that information is purely a personal thing.
I interpreted it personally as an illustration of how some economists and politicians in the world might be feeling confused and inexperienced in today’s unprecedented global economy.
Thanks for reading IceNews!
But in a country of 300.000 the haves, the have-nots and the lenders are all friends and family.
—————-
I know Iceland is small, but you make it sound like Ramsey Street. I’ve admittedly only lived here for three years, but I know precisely one person (my boss’ mother-in-law) who works in a bank.
According to your version of Icelandic life, she must regularly stroll into our workplace and casually offer us all massive loans, which we greedily snap up and contemplate the new summer house that we’ll never be able to realistically afford.
Indeed the British have their own problem, but what others did is a moot point.
———————–
It’s not a moot point when these ‘others’ (Britain in this case) are hurling slings and arrows at Iceland when it’s populace is ‘guilty’ of the same, en-masse malpractice. If I was an alcoholic, I wouldn’t tolerate a lecture from a drug addict about lack of self-control.
And as, Knowless said (12 Nov), Icelanders have often had to borrow merely to have an adequate life. You seem oblivious to the cost of living over here – the high personal debt was partly due to indulgence, I’m happy to accept that, but the necessity of borrowing is certainly not the ‘utter nonsense’ you claimed it to be.
I walked into that one :) . Thanks Alex.
I’ve just seen the glaringly obvious flaw in my point about the net assets being taken into Newbankis and owed to Oldbankis.
Those net assets are composed of assets and liabilities in Iceland.
Assuming everything is valued correctly, then the balance sheet position of the Oldbankis appears to remain unchanged.
But:
Usually in bankruptcy not all creditors are paid 100%. However, if the Newbankis issue a bond for the straight net assets, that’s just what will happen for those Icelandic creditors. If the appraiser takes into account that not all creditors can expect to recover 100%, how will he decide in advance at what level that recovery rate should be?
“Assuming everything is valued correctly, then the balance sheet position of the Oldbankis appears to remain unchanged.”
Well, not exactly. If the assets in the old banks only cover, say, 60% of the liabilities, than any 1:1 transfer to the new banks will change the balance of the old ones to the worse.
To Bromley86:
>>>>Usually in bankruptcy not all creditors are paid 100%. However, if the Newbankis issue a bond for the straight net assets, that’s just what will happen for those Icelandic creditors. If the appraiser takes into account that not all creditors can expect to recover 100%, how will he decide in advance at what level that recovery rate should be?
The FME (Icelandic FSA) decision, states that the appraisers will “evaluate the true worth of assets and liabilities allocated”.
Unfortunately, we do not know in advance exactly which method they will be using, but you can rest assured, the creditors will be watching this very closely, and they will not accept any outcome that is unfair to their interests.
Please for the ones who have prooves:
http://newsfrettir.com/?p=456
“Bryndis Kristjansdottir IRS investigations chief agrees with Helgi and said the department wants to get as many tips about possible punishable acts. She says the department has already had several tips about the crash of the banks and they are being reviewed.
Bryndis raises to attention that many institutions in Iceland are looking and various sides of the bank crash and their jobs can be overlapped. With a tip line or a special e-mail address it could be possible to review the information and point them to the right directions. Bryndis thinks that there is a significant amount of information with the civilians”
To orchafine:
>>>Please for the ones who have prooves:
http://newsfrettir.com/?p=456
>>>>”Bryndis Kristjansdottir IRS investigations chief agrees with Helgi and said the department wants to get as many tips about possible punishable acts. She says the department has already had several tips about the crash of the banks and they are being reviewed.”
I understand the anger by the Icelandic population, and if someone broke any specific laws and/or witheld their taxes, I have no problems with them being hunted down by the Icelandic prosecutors and/or the Icelandic IRS.
But, it is quite unlikely whether it was due to any laws broken by specific individuals, that caused the Icelandic bank crash. In fact the underlying core causes for the crash are already mostly known.
It was simply that the Icelandic banks had grown too large compared to the size of the Icelandic economy. The Icelandic central bank simply was not big enough to stand behind the banks as the lender of last resort and did not have enough foreign currency reserves.
This caused the European banks to loose faith in the viability of the Icelandic banking system as a whole and they subsequently withdrew their credit lines. Whether the Icelandic banks were individually good and sustainable businesses, simply became irrelevant.
Although it is impossible know for sure at this point, there is a good chance if the Icelandic banks had been based in UK or somewhere else, that they would have been still in business.
Being too big, is in and by itself not illegal.