Iceland Bucking The Trend

[MrWallace]

It looks like Iceland did exactly the right thing http://blogs.telegraph.co.uk/finance/ambroseevans-pritchard/100013462/iceland-wins-in-the-end/

Now if only some action could be taken against Gordon Brown for using anti-terrorism laws on them.

[LuckyOne]

When Iceland's banking system collapsed, they chose not to socialise losses which should be private or create monsters like the EFSF and open ended QE.

Their growth rate is now 2.4% and their unemployment rate is 6.1%. They seem to have recovered quite quickly by allowing losses to be realised immediately rather than postponed through either inflation or deferred default.

There is a lesson in here but I suspect that it will be ignored.

http://blogs.telegraph.co.uk/finance/ambroseevans-pritchard/100013462/iceland-wins-in-the-end/

The OECD has come very close to predicting a depression for Europe unless EU leaders conjure up a lender-of-last resort very quickly, and somehow manage to make the world believe that the EFSF bail-out fund really exists.

Even if disaster is avoided, the eurozone growth forecast is dreadful. Italy, Portugal, Greece will all contract through 2012, while Spain, France, Netherlands, and Germany will bounce along the bottom.

Unemployment will reach 18.5pc in Greece, 22.9pc in Spain, 14.1pc in Ireland, 13.8pc in Portugal.

Yet Iceland stands out, with 2.4pc growth and unemployment tumbling to 6.1. Well, well.

Iceland's policy of drastic devaluation with capital controls has not proved to be the disaster that so many foretold. Its refusal to accept the full burden of private bank losses has not turned the country into leper-land.

The nation has held its social fabric together. Had Iceland been in the eurozone, it would have been forced to pursue the same reactionary polices of "internal devaluation" and debt deflation being inflicted today on the mass ranks of unemployed across the arc of depression.

Sorry I could not resist posting this. Shame on me.

[Save me from the madness!]

Yep, we should have done the same. Let RBS go insolvent and then the Government buys it for a few pennies in the pound to stop the banking system imploding and break it up. That would have nicely cancelled Sir Fred's pension fund hopefully, and drastically reduced the share bonus's of the stock brokers. Why should a company become Too Big To Fail? There's that old saying of the graveyard is full of people who thought they were indispensable, same with companies. If they get too big, over stretch and fail, well that is capitalism in action and out of that comes opportunities for smaller banks to take the market share of the bigger failed bank and hopefully learn the lesson of the previous bank.

[DabHand]

IMF is still pulling the strings in Iceland. Turns out all that defaulting they did... they still owe it.

[Milton]

IMF is still pulling the strings in Iceland. Turns out all that defaulting they did... they still owe it.

When Iceland's three largest banks -- Kaupthing, Landsbanki and Glitnir -- collapsed in late 2008, their former executives fled the country, and owners have largely been living untroubled lives abroad.

An Icelandic parliamentary inquiry into the island nation's profound financial and economic crisis laid much of the blame for the downfall on the former bank heads who had taken "inappropriate loans from the banks" they worked for.

Four former Kaupthing executives, who all live in Luxembourg, were arrested in Iceland and Interpol has issued an international arrest warrant for Kaupthings ex-chairman, Sigurdur Einarsson.

The 49-year-old Einarsson, who lives in London, said he would not be returning to Iceland to be arrested.

"I'll put the human rights I enjoy here in Britain to the test and will not therefore come home (to Iceland) to these conditions without being forced," he added.

Meanwhile in the UK, no legal action whatsoever has been taken against any Bankers responsible.

Many have been knighted for services to Banking, and have been rewarded, and are protected by Her Majestys Government.

Edited November 29, 2011 by Milton

[Peter Hun]

IMF is still pulling the strings in Iceland. Turns out all that defaulting they did... they still owe it.

Yeah, the media like to use Iceland as an example to justify their personal prejudices. They have no idea how ******ed Iceland is, the sheen of normality is funded by huge set of loans. The UK would look great if we had £1.2trillion to spend over a few years.

There will be another bank crash in a year or so, the capital controls are also robbing Iceland. Its a soviet style command economy which will destroy itself.

Meanwhile in the UK, no legal action whatsoever has been taken against the Bankers responsible.

Meanwhile in Iceland, the bankers responsible will never face jail or sanction. The process in Iceland is simple, go through the motions create laws,only apply them to non-family members. Iceland's entire political and business elite are a mafia who control everything. The banking report made it quite clear that the corruption runs through the entire political class, judiciary, media, and universities coordinated by the banks. All of them were funded with money stolen from international investors under the name of banking.

Iceland isn't just a hedge fund, its a Madoff style criminal enterprise.

Edited November 29, 2011 by Peter Hun

[Traktion]

IMF is still pulling the strings in Iceland. Turns out all that defaulting they did... they still owe it.

Who cares? It doesn't mean they will pay it back.

I didn't sign a contract with the government and I sure as hell didn't agree to them borrowing money on my behalf. I gave no consent and there was certainly no meeting of minds. I suspect countless people around the world are realising this - the contract between the citizen and state is fraudulent. This isn't just for Iceland, but the UK, Ireland and anywhere else where the state has behaved disgracefully.

Either the governments write off the debt or citizens will write off the governments. It isn't their debt to repay, especially those who weren't even born or weren't old enough to vote, at the time.

edit: typo

Edited November 29, 2011 by Traktion

[Injin]

Yeah, the media like to use Iceland as an example to justify their personal prejudices. They have no idea how ******ed Iceland is, the sheen of normality is funded by huge set of loans. The UK would look great if we had £1.2trillion to spend over a few years.

There will be another bank crash in a year or so, the capital controls are also robbing Iceland. Its a soviet style command economy which will destroy itself.

Cheer up though, Iceland isn't going to pay those back either.

the IMF gave the money because they can't have anyone escaping the web of debt.

Meanwhile in Iceland, the bankers responsible will never face jail or sanction. The process in Iceland is simple, go through the motions create laws,only apply them to non-family members. Iceland's entire political and business elite are a mafia who control everything. The banking report made it quite clear that the corruption runs through the entire political class, judiciary, media, and universities coordinated by the banks. All of them were funded with money stolen from international investors under the name of banking.

Iceland isn't just a hedge fund, its a Madoff style criminal enterprise.

So is every political regime.

The difference is that in Iceland the general citizenry arrive on said political elites lawn en masse at 3 am with torches if said elite try to make the citizens pay for shit they don't want to. So it's not getting paid.

In the UK for contrast, we historically get grumbling and a few strikes. And so the debt keeps piling up.

[Sour Mash]

Yeah, the media like to use Iceland as an example to justify their personal prejudices. They have no idea how ******ed Iceland is, the sheen of normality is funded by huge set of loans. The UK would look great if we had £1.2trillion to spend over a few years.

There will be another bank crash in a year or so, the capital controls are also robbing Iceland. Its a soviet style command economy which will destroy itself.

Meanwhile in Iceland, the bankers responsible will never face jail or sanction. The process in Iceland is simple, go through the motions create laws,only apply them to non-family members. Iceland's entire political and business elite are a mafia who control everything. The banking report made it quite clear that the corruption runs through the entire political class, judiciary, media, and universities coordinated by the banks. All of them were funded with money stolen from international investors under the name of banking.

Iceland isn't just a hedge fund, its a Madoff style criminal enterprise.

Ha ha ha - any time there's a thread about Iceland, 'The Hun' can be relied upon to come out wild eyed and spitting bullets.

He must have lost a bundle in one of the offshore Icelandic bank accounts. Be more careful about where you park your money next time, Peter

[zebbedee]

There is a lesson in here but I suspect that it will be ignored.

Austrian school proves its the way to go again.

[Executive Sadman]

Is there anywhere i can get a big full UNBIASED summary, pdf or video ANYTHING that isnt BS. Every time Telegraph mentions Iceland its merely to say the euro is crap.

You know, something that mentions inflation before and after default, currency strength before/after, incomes before after, house prices before after, exports/imports before after.

Everything i read is either doom gloom or else paints Iceland as some kind of heaven.

There must be something in the middle that is nearer the truth.

Edited November 29, 2011 by Executive Sadman

[South Lorne]

Meanwhile in the UK, no legal action whatsoever has been taken against any Bankers responsible.

Many have been knighted for services to Banking, and have been rewarded, and are protected by Her Majestys Government.

....Knighted before the collapse by Nulabour 'friends together'....the report on the fall of RBS is due for public release soon ....there is still time for the Coalition to take action against any guilty parties and anyone else committing financial treachery in the lead up to the 2007/8 collapses....would like to see some of the politicians investigated especially those linked to the Treasury directly / indirectly....surely you can't write a note stating 'the money has all gone' without repercussions ...more so when you had misled the unions and many sheeple into thinking the country was rich.....not a pleasant way to act against the financially illiterate....this is deception at the highest level against the weakest.......

[Democorruptcy]

....Knighted before the collapse by Nulabour 'friends together'....the report on the fall of RBS is due for public release soon ....there is still time for the Coalition to take action against any guilty parties and anyone else committing financial treachery in the lead up to the 2007/8 collapses....would like to see some of the politicians investigated especially those linked to the Treasury directly / indirectly....surely you can't write a note stating 'the money has all gone' without repercussions ...more so when you had misled the unions and many sheeple into thinking the country was rich.....not a pleasant way to act against the financially illiterate....this is deception at the highest level against the weakest.......

The RBS report was done by the FSA.

The FSA cannot possibly be impartial to what happened at RBS or paint it in a bad light because their regulation allowed it to happen.

What should happen is a full public enquiry into the financial crisis covering not just the banks but the part the FSA played in making it happen. The FSA should be in the dock not sat in the witness box or acting as judge. 125% mortgages in a "regulated" industry

[Bloo Loo]

Default does not mean a debtis not owed.

It simply means it aint being paid off.

Iceland cant write it off, only the creditors can do that.

Of course, it should be recorded as a bad debt and the balance sheet adjusted accordingly....

[South Lorne]

The RBS report was done by the FSA.

The FSA cannot possibly be impartial to what happened at RBS or paint it in a bad light because their regulation allowed it to happen.

What should happen is a full public enquiry into the financial crisis covering not just the banks but the part the FSA played in making it happen. The FSA should be in the dock not sat in the witness box or acting as judge. 125% mortgages in a "regulated" industry

....lets not pre judge and hope they don't exonerate any possible RBS deficiency by taking the blame...maybe two sets of culprits...?....

FSA's failings to be revealed in RBS report

The report into the collapse of Royal Bank of Scotland will reveal in detail the extent of the failings by the UK authorities, according to Britain's top financial regulator.

Financial Services Authority (FSA) staff will come in for criticism in the report, according to Lord Turner, the regulator's chairman, who said it would show the organisation's approach to supervision had been "inadequate" and "severely deficient.

Speaking at the FSA's annual public meeting, Lord Turner gave the strongest guidance yet on the form the much delayed report will take.

"The report will illustrate why these failures in regulation, when combined with management mistakes and market-wide delusions, led to the failure of RBS and other banks, and will make clear how revolutionary are the changes we have already made," said Lord Turner.

The report will focus on three subjects, said Lord Turner: first a description of the factors that led to RBS's failures, second, the issues the FSA investigated and why it concluded there were no grounds for enforcement action against any of the bank's staff, and third, an account of the regulator supervised RBS in the run up to the crisis.

http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/8595239/FSAs-failings-to-be-revealed-in-RBS-report.html

[LuckyOne]

Default does not mean a debt is not owed.

It simply means it aint being paid off.

Iceland cant write it off, only the creditors can do that.

Of course, it should be recorded as a bad debt and the balance sheet adjusted accordingly....

Very true.

I would love to know the market value versus the carrying value of PIIGS bonds on the balance sheets of the banking, insurance, central bank etc balance sheets. I suspect that the entire system is insolvent on a mark to market basis even if it is currently liquid. It is likely that there are quite a few institutions that are actually trading while insolvent in reality albeit solvent on an accrual accounting basis with dubious provisions for bad debt.

[Democorruptcy]

....lets not pre judge and hope they don't exonerate any possible RBS deficiency by taking the blame...maybe two sets of culprits...?....

The FSA are as much use as a chocolate fireguard.

May 2010 Former RBS investment bank chief Johnny Cameron banned from City

Britain's financial regulator took its most senior scalp of the financial crisis, forcing a key figure at Royal Bank of Scotland not to take a top City job again.

http://www.telegraph.co.uk/finance/financialcrisis/7736540/Former-RBS-investment-bank-chief-Johnny-Cameron-banned-from-City.html

Oct 2010 RBS's Johnny Cameron returns to the City at Gleacher Shacklock

Johnny Cameron, the banker who oversaw the dramatic rise and fall of Royal Bank of Scotland's (RBS) investment banking arm, is returning to the City in an advisory role at Gleacher Shacklock.

http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/8086670/RBSs-Johnny-Cameron-returns-to-the-City-at-Gleacher-Shacklock.html