Friday, March 28, 2008

Attack on Iceland continues

Iceland may face rating cut, warns S&P

Iceland may see its credit rating cut if the country's banks are further battered by the global credit crisis, Standard & Poor's warned yesterday.

Posted by sold 2 rent 1 @ 09:21 AM (1096 views)
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9 thoughts on “Attack on Iceland continues

  • European-bear says:

    That will teach them for diversifying from their core business of cod fishing

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  • sold 2 rent 1 says:

    Why this now from S&P? They never let high default risks affect their AAA ratings on CDOs from sub-prime mortgages (until too late)
    Looks like there are some people determined to crash Iceland and other similar currencies.

    Why?

    To force that money back into the USD, GBP, EUR, YEN and support banks in those countries. This currency crisis would support the USD and allow more US rate cuts that will be needed because of the housing slump.

    Watch JP Morgan pick up some bargain deals after this crisis has brought down a few more banks

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  • S2R – I don’t know why you are so defensive about Iceland – perhaps you have an Icesave account – but the reality is that this sparsely populated lump of hot terrain has been letting it’s banks play all sorts of clever games with virtually no regulation.

    It’s a northern rock in more ways than one, indeed it’s an NR on steroids

    I really think it’s incredibly unwise to have savings in their banks, and putting faith in deposit protection schemes is equally foolhardy.

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  • The CDO crisis exposed the ratings agencies as little more than unregulated political tools for the large investment banks.

    It should be remembered that there is a lot at stake for the large investment banks, so lots of reasons to undermine foreign currency investments.

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  • “Richard Portes, president of the Centre for Economic Policy Research, and the author of a respected report on Iceland’s economy last year, has urged investors to pay more attention to the data. He says overheating is being tackled, with economic growth slowing, hitting 2.9 per cent in 2007 and zero this year.

    He adds that Iceland’s current account deficit – the source of many of the concerns about the economy – has narrowed from 26 per cent of GDP in 2006 to 16 per cent in 2007.

    He has also made clear that Iceland’s banks are sound by international standards, with deposit ratios in line with international norms, high capital adequacy ratios by European standards and credible funding profiles.

    Finnur Oddsson, managing director of the Icelandic Chamber of Commerce, said: “The global turmoil is certainly hurting the financial sector, but the danger of things toppling over here is greatly exaggerated.”

    http://www.ft.com/cms/s/0/b0499804-fad6-11dc-aa46-000077b07658.html

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  • it will be cheap to holiday in the Republic of BOE (iceland)

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  • I wonder how many corporate fingers are in the rear end of telegraphs economic reporting puppet show. I bet there are are a few ‘old school’ banking interests operating the mouth.

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  • sold 2 rent 1 says:

    uncle tom,

    “S2R – I don’t know why you are so defensive about Iceland – perhaps you have an Icesave account”

    I emptied my Icesave account 1 year ago.
    Iceland is an accident waiting to happen. The rating agencies have kept the ratings artificially high just like they kept the CDO subprime ratings high.
    These are clear signs that there has been some pumping of financial markets to a maximum, and once the maximum is reached the markets are then crashed.

    These same tactics happened in1907, 1921, and 1929.
    Massive financial coruption.

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  • @ Uncle Tom
    You say it would be foolhardy to put faith in deposit protection schemes.
    I’m in the process of of opening a few deposit accounts to put my ‘house’ money in. I’ve identified the links between banks (ie not having deposits in excess of 35k with eg halifax and BOS as their protection is under the group not individually).
    But can you elaborate on you statement as to why the FSA scheme would not payout in the event of a collapse of a bank covered by it ie Kaupthing or Icesave.
    And if you do know much on the subject can you or anyone else recommend the safest banks with best rates.
    Many Thanks

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