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mdman

He Who Defaults First, Wins

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From JPM Private Banker Michael Cembalest:

The Irish “bailout” plan, with its EUR 54,800 cost per household, is by all accounts a modern-era “Long Day’s Journey Into Night”. Ireland’s future, by the way, looks a lot more bleak than Iceland’s. Iceland took a different path (debt default and a devaluation of 60%). Two years on, Iceland is rebounding: exports and manufacturing are growing by 20%, tourism is back near all-time highs, real wages are rising, unemployment is declining sharply, interest rates fell from 18% to 5.5% and the stock market rebounded 50% from its lows. In Ireland, GDP is contracting at a 9.7% rate; real wages, price levels, the money supply and exports are falling; and unemployment is stuck at 14%.

Please Ireland, grow a pair and default.

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From JPM Private Banker Michael Cembalest:

Please Ireland, grow a pair and default.

It's a scary precedent for the whole Western World that you can so easily gull an entire country into accepting debt slavery for themselves and their kids in order to keep the bankers living high on the hog.

Who needs to bother with the slow erosion of personal freedoms and civil liberties (the strategy of choice so far) when you can simply get a whole nation to jump at once into your prison?

What's worse for Ireland is that this is just the bankers' debt. The personal debt crisis hasn't even hit full speed there yet. I wonder is there any chance of a state 'bailout' for indebted individuals?

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When did Iceland default?

Iceland itself didn't default - their banks did but the state didn't accept full liability for their losses. The banks after all are private businesses and failure should be borne by the cost of bond and shareholders.

Unlike Ireland which took on full state liability for all the greed, fraud and stupidity of their privately run banks.

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Iceland itself didn't default - their banks did but the state didn't accept full liability for their losses. The banks after all are private businesses and failure should be borne by the cost of bond and shareholders.

Unlike Ireland which took on full state liability for all the greed, fraud and stupidity of their privately run banks.

Who lost money when Iceland's banks defaulted?

Edit: As I recollect, Iceland tried to wriggle out of responsibility for its banks, but in the end accepted loans from various sources to cover their liabilities. AFAIK, Iceland is still obliged to repay those loans.

Edited by snowflux

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Who lost money when Iceland's banks defaulted?

Edit: As I recollect, Iceland tried to wriggle out of responsibility for its banks, but in the end accepted loans from various sources to cover their liabilities. AFAIK, Iceland is still obliged to repay those loans.

I'm not sure of the full story but UK banks paid for some of the losses via the deposit insurance scheme. When British savers stood to lose money when Icesave and Landesbanki went bust the deposit insurance scheme kicked in. Also the UK government guaranteed people's savings beyond the insurance scheme (a mistake in my opinion). Many local councils lost money too, as bizarrely some had put millions in Icesave accounts - I don't think Alister Darling promised to guarantee. However, some people not covered by this lost out. There was some couple on the news with a 6 figures cash sum in Icesave who invested via the Isle of Man to save on tax. They lost everything, at least according to the article on the news. - All those examples are just from the UK. So I'd say globally many people must have taken losses in Iceland's banks. I'm going there on holiday soon - can't wait. 60 euros a night for an ok hotel room. Beer is 4 euros a half litre. Wohoo!

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60 euros a night for an ok hotel room. Beer is 4 euros a half litre. Wohoo!

So the price of their default was secret adoption of the euro? ;)

Edited by snowflux

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1) Iceland had it's own currency

2) Iceland has a population of 300,000

Ireland isn't bankrupt. It could afford to pay it's debts. It just doesn't WANT to. They enjoyed the meal and now they don't want to pay the bill.

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1) Iceland had it's own currency

2) Iceland has a population of 300,000

Ireland isn't bankrupt. It could afford to pay it's debts. It just doesn't WANT to. They enjoyed the meal and now they don't want to pay the bill.

Why should citizens of any country pay to bail out private businesses? I dont understand the logic behind your thinking.

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From JPM Private Banker Michael Cembalest:

Please Ireland, grow a pair and default.

What a Moron.

Iceland does have a working currency. Its exchange rate is fixed by the government owned banks, to get Euro's you have to convert at the official rate or risk a jail sentence. The free market price of the ISK is half the 'official' rate.

Iceland have simply kicked the can down the road. When they allow their currency to float, it will collapse at least 50% as the locked in foreign bondholder repatriate. In the mean time, nobody will invest in Iceland. 40% of businesses are bankrupt, kept afloat by the Party instructing the banks not to close them down. Iceland has refused to deal with its debts; the country is simple frozen - something that is possible when you are a small town in the control of a Mafia.

Why should citizens of any country pay to bail out private businesses? I dont understand the logic behind your thinking.

Banks are NOT private companies. They are fundamentally government bodies and Guaranteed by them.

Iceland went even further, the Government, Media and education system was employed by the banks. The Finance Minister said "the Icelandic government guarantee's the saving in Icesave". He asked British people to deposit in Icesave because it was safe. The Icelandic President was (like the rest of Iceland parliament) paid Millions of Euro's by the banks - he was their international spokesman (Also an Ex-Party member).

Edited by Peter Hun

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A contract was entered into by two private parties, Irish banks and their creditor international banks. Irish citizens and taxpayers were not a part of this

All such borrowing contracts have clauses outlining what enforcement actions are to be taken in the event of default. The banks should sort this mess out between themselves. If taxpayers are forced to eat bank losses, they have the moral duty and obligation to come back at the bankers by clawing back their wealth off these deals, jailing them for fraud and executing some if found guilty of treason or financial terrorism

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A contract was entered into by two private parties, Irish banks and their creditor international banks. Irish citizens and taxpayers were not a part of this

Banks are NOT private companies. As you can see by the actions of Governments when a bank fail. They are licensed by the central bank who acts as the 'lender of last resort'. If they fail the government picks up the tab, if you don't understand that then look around and see whats happening.

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Banks are NOT private companies. They are fundamentally government bodies and Guaranteed by them.

If you can buy shares in them then as far as I'm concerned they are private companies. They should not be allowed to take on gambling liabilities greater than the value of the sum of their shares.

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Banks are NOT private companies. As you can see by the actions of Governments when a bank fail. They are licensed by the central bank who acts as the 'lender of last resort'. If they fail the government picks up the tab, if you don't understand that then look around and see whats happening.

The way it works is this- when the profits are to be shared out amongst staff and shareholders banks are to be defined as private companies- but if large losses are incurred this is changed to ensure that taxpayers pick up the losses.

The technical term for this arrangement is called buttf*cking,

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You just keep coming out with this sh*t don't you...

What's all this "they"?

Some Irish people have defaulted on their debts. Virtually all of the Irish banks are bust.

Those people/banks should default/be made to pay their debts.

Provide one single moral argument that holds water for why all of the Irish people should pay for the debts of some of them? Following your "logic", I take it you will be happy to pay for the debts of that bloke down the road who you don't know and who borrowed too much. I take it you will also be happy to bail out the f*ckwit banks who shoved all of this debt down his throat. Or, indeed, that you are happy to bail out your government who paid off all of those debts to the banks on your behalf with your future tax payments and by debasing the value of your savings without your permission.

Actually, it's worse than that....

I take it you will be happy for your kids and grandkids yet to be born to pay for those debts will you?

No?

Why's that then?

Or is it just that you apply your "free-market principles" only when it suits?

Cretin

:lol:

And that goes double for Peter Hun

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Banks are NOT private companies. As you can see by the actions of Governments when a bank fail. They are licensed by the central bank who acts as the 'lender of last resort'. If they fail the government picks up the tab, if you don't understand that then look around and see whats happening.

That's what's happened and is continuing to happen, yes.

But whether it should have happened or be happening is another matter entirely.

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What a Moron.

Iceland does have a working currency. Its exchange rate is fixed by the government owned banks, to get Euro's you have to convert at the official rate or risk a jail sentence. The free market price of the ISK is half the 'official' rate.

Iceland have simply kicked the can down the road. When they allow their currency to float, it will collapse at least 50% as the locked in foreign bondholder repatriate. In the mean time, nobody will invest in Iceland. 40% of businesses are bankrupt, kept afloat by the Party instructing the banks not to close them down. Iceland has refused to deal with its debts; the country is simple frozen - something that is possible when you are a small town in the control of a Mafia.

Banks are NOT private companies. They are fundamentally government bodies and Guaranteed by them.

Iceland went even further, the Government, Media and education system was employed by the banks. The Finance Minister said "the Icelandic government guarantee's the saving in Icesave". He asked British people to deposit in Icesave because it was safe. The Icelandic President was (like the rest of Iceland parliament) paid Millions of Euro's by the banks - he was their international spokesman (Also an Ex-Party member).

Large, sophisticated swiss/american/british/german bank - a bank that may have revenues bigger than the total GDP of iceland - lends 100s of millions of pounds/dollars/euros to Icelandic bank. That Icelandic bank then lends the money on to an overambitious Icelandic businessman with connections to the board of said Icelandic bank. This businessman uses the money to buy West Ham football club, Hamleys, Top Shop or whatever - he then finds that he cannot pay the interest on the loan from the revenues of the businesses that he purchased and goes bust. Now you tell me - in what way is it logical (or even morally consistent) for some old cod fisherman in Rejkjavik to have to pay towards the losses made by these parties through his taxes? I'd love to know.

Edit: further, is it reasonable for a nation with a population the size of Coventry to have the intellectual, political and financial resources to effectively manage and regulate banks operating in the world of international high finance?

Edited by gimble

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Banks are NOT private companies. As you can see by the actions of Governments when a bank fail. They are licensed by the central bank who acts as the 'lender of last resort'. If they fail the government picks up the tab, if you don't understand that then look around and see whats happening.

Load of rubbish, if banks are part of the government apparatus then why exactly do they pay dividends, and more importantly being a uk citizen and voter when will i be getting mine from HSBC, lloyds, barclays, nationwide, etc?

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Large, sophisticated swiss/american/british/german bank - a bank that may have revenues bigger than the total GDP of iceland - lends 100s of millions of pounds/dollars/euros to Icelandic bank. That Icelandic bank then lends the money on to an overambitious Icelandic businessman with connections to the board of said Icelandic bank. This businessman uses the money to buy West Ham football club, Hamleys, Top Shop or whatever - he then finds that he cannot pay the interest on the loan from the revenues of the businesses that he purchased and goes bust. Now you tell me - in what way is it logical (or even morally consistent) for some old cod fisherman in Rejkjavik to have to pay towards the losses made by these parties through his taxes? I'd love to know.

Edit: further, is it reasonable for a nation with a population the size of Coventry to have the intellectual, political and financial resources to effectively manage and regulate banks operating in the world of international high finance?

I would say that man has no place in Heaven when he dies.

criminals the lot of them.

And being of criminal intent normally nullifies the cloak of Limited Liability...

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Load of rubbish, if banks are part of the government apparatus then why exactly do they pay dividends, and more importantly being a uk citizen and voter when will i be getting mine from HSBC, lloyds, barclays, nationwide, etc?

So why do Governments around the world stand behind the banks when they go bust? Even Iceland nationalised all its banka and put a billion euro's of public money into it.

No fair blah blah blah.

Cant't you see the evidence in front of your face. Show me a government that doesn't back its banks? Prove your point, everything that has happen over the past few years shows that the yax payer bails out the banks.

And being of criminal intent normally nullifies the cloak of Limited Liability...

Banks are NOT limited liability companies. They are guaranteed by the central bank.

Edited by Peter Hun

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A contract was entered into by two private parties, Irish banks and their creditor international banks. Irish citizens and taxpayers were not a part of this

All such borrowing contracts have clauses outlining what enforcement actions are to be taken in the event of default. The banks should sort this mess out between themselves. If taxpayers are forced to eat bank losses, they have the moral duty and obligation to come back at the bankers by clawing back their wealth off these deals, jailing them for fraud and executing some if found guilty of treason or financial terrorism

You don't see any/much of this in the UK's elite owned/run media (just in case the population gets ideas and demands reparations)

Bankers jailed, sued as Iceland seeks culprits for crisis By Haukur Holm (AFP) – May 12, 2010

REYKJAVIK — More than a year and a half after Iceland's major banks failed, all but sinking the country's economy, police have begun rounding up a number of top bankers while other former executives and owners face a two-billion-dollar lawsuit.

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

But the publication last month of a parliamentary inquiry into the island nation's profound financial and economic crisis signaled a turning of the tide, laying much of the blame for the downfall on the former bank heads who had taken "inappropriate loans from the banks" they worked for.

On Wednesday, the administrators of Glitnir's liquidation announced they had filed a two-billion-dollar (1.6-billion-euro) lawsuit in a New York court against former large shareholders and executives for alleged fraud.

"I think this lawsuit is without precedence in Iceland," Steinunn Gudbjartsdottir, who chairs Glitnir's so-called winding-up board, told reporters in Reykjavik.

"It is about higher figures than we have ever seen," she said, adding that she expected Glitnir to file more lawsuits going forward, but that "it is unlikely any will be this big."

Glitnir said it was suing "Jon Asgeir Johannesson, formerly its principal shareholder, Larus Welding, previously Glitnir's chief executive, Thorstein Jonsson, its former chairman and other former directors, shareholders and third parties associates with Johannesson for fraudulently and unlawfully draining more than two billion dollars out of the bank."

The bank also said it was "taking action against its former auditors PricewaterhouseCoopers (PwC) for facilitating and helping to conceal the fraudulent transactions engineered by Johannesson and his associates, which ultimately led to the bank's collapse in October 2008."

Glitnir's suit, filed in the New York state Supreme Court on Tuesday, blamed most of the bank's woes on "Johannesson and his co-conspirators," who had "conspired to systematically loot Glitnir Bank in order to prop up their own failing companies."

Johannesson, the former owner of the now-defunct Baugur investment group with stakes in a number of British high street stores including Hamleys, Debenhams and House of Fraser, said he was shocked by the lawsuit.

"The distortions and the nonsense in the lawsuit are incredible," he told the Pressan news website.

Glitnir's administrators "can get a 10-year-prison sentence for misusing US courts in this manner," he insisted.

The bank's chief administrator Gudbjartsdottir took his comments in stride.

"I didn't expect him to be happy with the lawsuit," she said.

In addition to its New York suit, Glitnir said it had "secured a freezing order from the High Court in London against Jon Asgeir Johannesson's worldwide assets, including two apartments in Manhattan's exclusive Gramercy Park neighbourhood for which he paid approximately 25 million dollars."

Gudbjartsdottir said Johannesson had just 48 hours to come up with a satisfactory list of his assets.

"If he does not give the right information he faces a jail sentence," she said.

Four former Kaupthing executives, who all live in Luxembourg, have meanwhile been arrested in Iceland in the past week and Interpol has issued an international arrest warrant for that bank's ex-chairman, Sigurdur Einarsson.

Former head of the bank's domestic operations, Ingolfur Helgason, and former chief risk officer Steingrimur Karason were arrested late Monday on arrival from Luxembourg, just days after former Kaupthing boss Hreidar Mar Sigurdsson, along with Magnus Gudmunsson, who headed the bank's unit in Luxembourg, were taken into custody.

The 49-year-old Einarsson, who lives in London, said late Tuesday he had no plans to travel to Iceland to be arrested.

"I'm absolutely flabbergasted about the latest news," he told the Frettabladid daily.

"There is in my opinion no need for the arrests or custody rulings, and I will not of my own free will take part in the play that it appears is being staged to soothe the Icelandic people," he said.

"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.

As they spell it out for you - Billions of Euros were 'disappeared' by the largest shareholders(supa rich) and their spiv executives!

Edited by erranta

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So why do Governments around the world stand behind the banks when they go bust? Even Iceland nationalised all its banka and put a billion euro's of public money into it.

No fair blah blah blah.

Cant't you see the evidence in front of your face. Show me a government that doesn't back its banks? Prove your point, everything that has happen over the past few years shows that the yax payer bails out the banks.

Banks are NOT limited liability companies. They are guaranteed by the central bank.

I beg to disagree

Nearly banks ARE limited liability companies in law (that is why they have PLC at the end of their names) and to my knowledge there is no legal guarantee on the state or Central banks to underwrite their business apart from that provided to protect savers upto a certain level of deposits.

If you can point me to a link that shows the case law or statutory basis for Central Bank guarantees I would be happy to read it.

Governments do not always protect the existence of individual banks within their borders. The US government authorities wind them up all the time (why else do posters on US sites always go on about FDIC Fridays). The UK government have essentially done the same over the years with entities such as BCCI, Bradford and Bingley and Northern Rock.

What Governments and Central Banks are concerned about is maintaining a viable, orderly banking sytem overall (i.e the mechanism for taking deposits and giving out loans). That does not necessarily means maintaining the existing players in the market. In fact many of the wiser commentators in this crises have suggested that rather than throwing money at the large institutions that got us in this mess the governments of the world should have simply used the capital to found new smaller banks . The existing failing banks could then have simply been wound up with any protected assets such as deposits being redistributed to the new banks. Bondholders in the failed banks would have been given equity stakes in the new banks (ie their bond would be swapped for shares). The shareholders in the failed banks would lose everything which is what is supposed to happen in a limited liability company when it goes bust (ie their liability is their share capital).

The problem is that instead of following the capitalist model we have adopted some form of Bourbon crony corporatism where huge institutions use their very size to extract taxpayers money from frightened, pliant or corrupt politcians. It is a model that is doomed to fail.

Edited by realcrookswearsuits

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You don't see any/much of this in the UK's elite owned/run media (just in case the population gets ideas and demands reparations)

Icelands banks are a whole different league. One guy who owned half the a bank simply stole the 500million euro's the Icelandic central bank gave to bail out the bank. Transfered the lot to the Cayman islands . They were bribing virtually the entire parliament and media, the country was a crime syndicate. And no matter what that articles says, none of them are in jail, in Iceland they don't apply the law if you are connected, and everybody is connected with the Party.

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I beg to disagree

Nearly banks ARE limited liability companies in law (that is why they have PLC at the end of their names) and to my knowledge there is no legal guarantee on the state or Central banks to underwrite their business apart from that provided to protect savers upto a certain level of deposits.

If you can point me to a link that shows the case law or statutory basis for Central Bank guarantees I would be happy to read it.

Governments do not always protect the existence of individual banks within their borders. The US government authorities wind them up all the time (why else do posters on US sites always go on about FDIC Fridays). The UK government have essentially done the same over the years with entities such as BCCI, Bradford and Bingley and Northern Rock.

What Governments and Central Banks are concerned about is maintaining a viable, orderly banking sytem overall (i.e the mechanism for taking deposits and giving out loans). That does not necessarily means maintaining the existing players in the market. In fact many of the wiser commentators in this crises have suggested that rather than throwing money at the large institutions that got us in this mess the governments of the world should have simply used the capital to found new smaller banks . The existing failing banks could then have simply been wound up with any protected assets such as deposits being redistributed to the new banks. Bondholders in the failed banks would have been given equity stakes in the new banks (ie their bond would be swapped for shares). The shareholders in the failed banks would lose everything which is what is supposed to happen in a limited liability company when it goes bust (ie their liability is their share capital).

The problem is that instead of following the capitalist model we have adopted some form of Bourbon crony corporatism where huge institutions use their very size to extract taxpayers money from frightened, pliant or corrupt politcians. It is a model that is doomed to fail.

Plus they have 'rigged' everything to ensure 'they' take ever increasing wealth out of the country as a whole. False accounting, one-way rigged casino betting.

Result - rigged food/cereal markets forcing over 30 million to starve to death etc even though there was no shortages - it was pure City speculation whilst playing increasing spiral, pass the parcel - SCUM!

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Icelands banks are a whole different league. One guy who owned half the a bank simply stole the 500million euro's the Icelandic central bank gave to bail out the bank. Transfered the lot to the Cayman islands . They were bribing virtually the entire parliament and media, the country was a crime syndicate. And no matter what that articles says, none of them are in jail, in Iceland they don't apply the law if you are connected, and everybody is connected with the Party.

And you think there is no collusion in The City + House builders + Banks + EA's owned by the banks + stooge Parliamentarians (all recently caught out flipping & on the take?)

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  • 311 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
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      • up 5%



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