Comments on: Icelandic banks deliberately weakened krona before collapse

By: Niels

Niels — Wed, 17 Mar 2010 10:36:41 +0000

@Bjarni,
What you are saying does make sense but it does not answer one thing: ” As an example, Kristjansson says that 42 percent of Kaupthing currency trade in a three-month period came in the final five days, a proportion which should have been just eight percent.”

Five times more trade than usual.

Why all this trading in one very short period? Looks like inside trading.

By: Bromley86

Bromley86 — Wed, 17 Mar 2010 09:22:39 +0000

Time to ask the annual question. So why stay there Gus? Let’s see:

1. You hate the people
2. You think they hate you
3. It’s cold
4. You think the country is going down (and will stay down) the crapper
5. You’re apparently at University and there won’t be any jobs, especially not for foreigners
6. You think the Icelandic education system is poor

I’m not seeing any positives. Sure, you can lord it over the locals with your euros, but even with the kreppa I believe it’s still a relatively expensive place to live compared to Spain.

Why not move to Zimbabwe? It’s warmer and your euros will go further.

By: Giova Bocca

Giova Bocca — Wed, 17 Mar 2010 05:17:16 +0000

For the most part little should be read into banks trading in currencies, especially shorting their native where most purchasing is in other currencies. Currencies are the commodity banks buy and sell, in addition to credit, and they must balance the values of the currencies they deal in. If they do not, especially in times of fluctuations, they become victims of currency speculators, ending up paying out the moneys the speculators “win” (In every situation where one makes a “coup” in a market someone else pays that “coup”). In currency speculation situations the payers are usually the native banks, including central banks, who are not able to dodge out of their native currency, which they are obliged to support.
That said, the high percentage of shorting by Kaupthing in a very short period could be significant. The time during which the extreme trading occurred is not stated, but if it occurred beginning days before Glitnir’s collapse it would be interesting. It would also be if it began immediately after, peaking immediately before Kaupthing was collapsed by Gordon Brown’s invocation. The collapse of Glitnir appears to have been probably avoidable, but allowed deliberately to occur, becoming less and less avoidable as the central bank held silence and did nothing. It was very peculiar, as if someone thought killing one Icelandic bank could be done without the act destroying world confidence in the whole system, sealing the fates of all banks of the system.That act by the Icelandic central bank is why the radical action of Brown was and is and will be defencible. Kaupthing was supposed to survive, obviously, as proofed by it being the Icelandic bank given a transfusion by the central bank. That transfusing of course only made the central bank’s previous inaction appear more deliberate, making Iceland more definitely a place to de-invest from. Of course, from the moment it was apparent Iceland’s central bank was deliberately letting a bank crash, everyone with any foresight and any krona was getting out krona, and shorting them as much as they could.
All in all, it still appears that the primary destroyer of Iceland’s banks and financial sector was the Icelandic central bank.

By: SIR EURO

SIR EURO — Wed, 17 Mar 2010 00:56:54 +0000

THIS ONLY CONFIRMS MY THEORY THAT ICELAND IS A REAL BAY OF PIRATES, THERE IS NO LAW, EVERYONE JUST THINKS ABOUT SAVING HIS OWN -SS AND F–K THE REST!!!

WELCOME TO THE 3RD WORLD AND POVERTY ICELANDERS… THE WORST OF ALL IS THAT ICELANDERS KNOW THIS BUT THEY WOULD DO NOTHING!! THEY JUST COMPLAIN AND THEN NOTHING ELSE… IT IS A REAL DEMENTIAL SCENERY …

By: Bjarni

Bjarni — Tue, 16 Mar 2010 23:44:02 +0000

To Peter – London/Krakow:

As you should already know, we use patronymic naming system here in Iceland so discussing the number of Icelandic “surnames” does not make much sense. This automatically means that ALL Icelandic first names for males double also as the last name for their children with the postfix of “son” or “dóttir”.

Both “Bjarni” and “Kristján” are actually fairly common names in Iceland (there are about 1600 Bjarni’s and 2300 Kristján’s), with around 50 having the full name Bjarni Kristjánsson.

By: demy f.r.

demy f.r. — Tue, 16 Mar 2010 19:31:17 +0000

IF BJARNI KRISTJANSSON – An economist is talking from an inside information, POSSIBLY about FACTS because at the time nobody did anything or voice out any deffiance of what was going on, a possible COLLUSION of those POLITICIANS, ALLEDGED INVESTORS AND BUSINESSMEN WHO WERE INTRUSTED TO PROTECT THE INTEREST OF THE PEOPLE BUT WHO FOR GREED ENGAGED IN DUBIOUS TRANSACTIONS UNDER PRETENCE AND CLOAK OF SECRECY AT THE EXPENSE OF ALL THE HARDING WORKING CITIZENS OF ICELAND. The vultures of capitalism. Is this fair ? After the collapsed of the banks, the same people who have been victimized are now forced to pay the ICESAVE including the future generations ? IS THIS REALLY TRUE ?
- Now is the need for solidarity to find out the truth, if ever .

By: Chris

Chris — Tue, 16 Mar 2010 16:47:40 +0000

Google irs 1201 it explains it .

By: Peter - London/Krakow

Peter - London/Krakow — Tue, 16 Mar 2010 15:40:35 +0000

“might not be our Bjarni after all – I think he’s in IT.”

My understanding is that there are very few Icelandic surnames (12?) so the chances of there being two people with the same name is very high.

By: Bjarni

Bjarni — Tue, 16 Mar 2010 14:44:31 +0000

To Bromley86:

Sorry, I am not the economist Bjarni Kristjansson… ;-)

Although he has some interesting things to say, I am not so sure he has a valid point that the currency shorts were done specifically to weaken the Icelandic krona.

First of all it was fairly well known in 2007-2008 that the Icelandic krona was trading way too high and would have to come down. At the time there were no foreign exchange restrictions in Iceland, so it was only natural for the Icelandic banks to purchase foreign currencies. Furthermore, that they were doing this, was reported in their financial statements, and therefore well known at the time.

Secondly, with most of their operations in foreign countries, and with the Icelandic Central Bank refusing to allow the banks to switch their accounting in foreign currency, purchasing foreign currency was simply a necessary step to hedge against the certain devaluation of the krona.

I have not seen any evidence that the Icelandic central bank or the government did anything to stop this. If they had wanted to, the only real solution, would NOT have been to restrict purchases of foreign currency by the banks, which would have made them extremely vulnerable. Rather, they should have forced the banks to move their foreign operations abroad, to protect the underlying Icelandic economy. But at the time the government simply didn’t realize the full scale of the danger it was in.

By: What is IRS reference code 1201? | eFinanced

What is IRS reference code 1201? | eFinanced — Tue, 16 Mar 2010 13:47:37 +0000

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