BS: So it has come to this - Iceland

Subject: BS: So it has come to this - Iceland
From: skarpi
Date: 02 Oct 08 - 08:13 PM

So all my friends , its the second of October 2008 and i should be in US at the Getaway , but instead I am here at home, few hours ago our PM
was in TV and we thought that he was goin to tell us what he was goin to do to help the people of the Icelandic nation , becouse , the problem in Iceland is not just the world money problem only its also home made problem that we need to fix ASAP , and he did not tell us anything .

US dollars , euro, or any othe money is not possible to have in the banks
here m and we have gasoline for 30 days in the country ??
So the Iceland is nearly goin to stop the wheels.

the index is so high that the payment of the houses is goin higher
every week . We have inflation here very high, and we also have
something called indexation , that means when the inflations
goes up our loan goes along with it , and although the inflation goes down again the indexation wont go down so like in my examble , my loan of the house has gone up about 4 million ISL KR , thats about 36000
dollars and about 20 thousend pounds , and it wont go down .

Iceland is in so much trouble , we have the smallest econamy system in the world and its not possible for us to control the problem .

I know there are also other nations fighting for their lives
but watch out.

it seems to me that if our coverment wont fix some of its problem soon
we are bankrupt . unless some BIG bank can help us out.

so my friends , if you have alot of money and wanna visit Iceland
now is the time, it should cost very little .

All the best from Skarpi Iceland , in a cold house , and in a white country , yes its snowin outside , should be christmas now .

so Best of luck everyone .......... with the future

Subject: RE: BS: So it has come to this - Iceland
From: Sandra in Sydney
Date: 02 Oct 08 - 08:21 PM

& best of luck to you, Skarpi, is anyone offering solutions, do you have an opposition party that thinks they know better or are they paralysed, too?

sandra

Subject: RE: BS: So it has come to this - Iceland
From: Rapparee
Date: 02 Oct 08 - 08:28 PM

Skarpi, if I had the money I'd send it.

Subject: RE: BS: So it has come to this - Iceland
From: Charley Noble
Date: 02 Oct 08 - 08:52 PM

I'm not sure the money we have left is worth much.

Best of luck, Skarpi, weathering this storm.

Charley Noble, who will raise a glass (non-alcoholic of course) in your honor at Getaway!

Subject: RE: BS: So it has come to this - Iceland
From: maeve
Date: 02 Oct 08 - 09:04 PM

Skarpi I've sent a PM. Thank you for explaining what's happening there.

maeve

Subject: RE: BS: So it has come to this - Iceland
From: Bee
Date: 02 Oct 08 - 09:44 PM

So sorry, Skarpi - all of us 'have' countries are looking trouble in the eye.

Subject: RE: BS: So it has come to this - Iceland
From: Ebbie
Date: 02 Oct 08 - 10:53 PM

{{{Skarpi}}}} Hang in there, friend. Perhaps you are simply the first in a long line to come. Wish we were all together- on the other hand, we are all in this together.

Subject: RE: BS: So it has come to this - Iceland
From: Donuel
Date: 02 Oct 08 - 11:44 PM

Warren Buffet should be notified ASAP and I am not kidding!

Subject: RE: BS: So it has come to this - Iceland
From: skarpi
Date: 03 Oct 08 - 03:28 AM

yes this affect us all and we are all into this together thats true .
and I will hang in there , as they say there is always light in the dark,
all the best Skarpi

Subject: RE: BS: So it has come to this - Iceland
From: gnu
Date: 03 Oct 08 - 06:41 AM

Yo, S. Hope things work out, buddy.

Subject: RE: BS: So it has come to this - Iceland
From: Emma B
Date: 03 Oct 08 - 07:10 AM

With a population of 300,000, Icelanders have been described as having 'one of the highest standards of living in the world.'

In March 2006, strategists at Denmark's Danske Bank published a report that warned, in addition to its very overheated economy, Iceland has seen "a stunning expansion of debt, leverage and risk-taking that is almost without precedents anywhere in the world,"


' Iceland's top three banks, Kaupthing, Landsbanki and Glitnir went on a helter-skelter international expansion over the past decade and their total assets have ballooned to 10 times the size of Iceland's economy.'
Canadian Globe&Mail October 2

'For at least a year, alarm bells have been ringing over Iceland's economy and banking system, which has been likened to one big Viking hedge fund.

In April, Andreas Hakansson, an analyst at UBS, pointed out that the liabilities of Iceland's banks dwarfed the rest of the economy, equating to 800pc of GDP – way beyond the European average of 300pc.'
Alarm bells ring as Iceland's economy shakes

On Monday Iceland's government Monday a 75% stake in Glitnir Bank for 600 million euros, or 6% of gross domestic product. The nationalization was prompted by mounting liquidity difficulties at Glitnir, which is one of the country's three largest banks.

Subject: RE: BS: So it has come to this - Iceland
From: robomatic
Date: 03 Oct 08 - 07:14 AM

Skarpi- The President of Iceland was on Alaska radio for an hour today talking about issues of Northern countries. I was very impressed by his humor and command of English. I already badly want to visit Iceland and this made me more interested than ever.

Subject: RE: BS: So it has come to this - Iceland
From: freda underhill
Date: 03 Oct 08 - 07:20 AM

what a shock, my thoughts are with you Skarpi, this is very bad news for Iceland. just as our economies are connected we are all connected and I send you my best wishes and hopes for sn economic solution for your country.

freda

Subject: RE: BS: So it has come to this - Iceland
From: GUEST,from work
Date: 03 Oct 08 - 02:38 PM

true emma this is so true , when this was :In March 2006, strategists at Denmark's Danske Bank published a report that warned, in addition to its very overheated economy, Iceland has seen "a stunning expansion of debt, leverage and risk-taking that is almost without precedents anywhere in the world," I hoped that the coverment would go the Irish way in saving , but they did not and everthing got even hotter ,

so here we are , some man specialist said today , and he´s
from europe that Iceland has been hit on the hardest way .

So be it , I just stand up on my feet again .

all the best Skarpi

Subject: RE: BS: So it has come to this - Iceland
From: freda underhill
Date: 04 Oct 08 - 07:03 AM

from the Guardian today -

Fears were growing last night for Iceland's financial system, following a tumultuous week in which the government seized control of Glitnir, the country's third biggest bank. The krona has slumped another 14% since the government agreed to pump €600m (£467m) into Glitnir on Monday, as confidence in Iceland has evaporated.

Gylfi Magnússon, an economist at the University of Iceland, said the government would need to take further "drastic action" to prevent the banking system from collapsing. He said it was "inevitable" more firms would run into trouble. "This past week has been about as bad as it could get," he said. "People are very worried and have no real idea what the future might look like".

The combined assets of Iceland's big three banks are nine times the country's GDP. The government and central bank "don't have the money to keep the banks afloat", Magnússon said. The cost of insuring Iceland's government and bank debt has soared to record levels, suggesting the credit markets believe a default is imminent. Iceland has been likened to the canary in the coal mine, a small economy, but if it topples it is an ominous sign for the rest of the world.

The head of the Icelandic central bank, Davíd Oddsson said officials were examining various options to calm the crisis, including a large loan from overseas. Sources said the two largest banks, Kaupthing and Landsbanki, were in constant touch with government officials.

Kaupthing was fighting rumours about its health after reports it had been cutting its exposure to the markets. In a statement, Armann Thorvaldsson, who runs the London office said; "In these extreme market conditions, everyone across the market is looking to deleverage - it's the sensible thing to do." The bank said it has ample funding for the next 12 months. Kaupthing and Landsbanki have built their deposit bases, partly with UK savers' cash (protected by the British government guarantee).

Iceland, which has been likened to a "toxic hedge fund", has been one of the fastest growing economies in Europe but the wealth has been built largely on borrowing, the big three banks rely heavily on the wholesale markets to fund their expansion. As the credit markets have frozen, the banks are finding it difficult to find short-term financing.

One of Iceland's best known firms, Baugur, owns many British high street stores, including House of Fraser, Karen Millen, Oasis and All Saints. It issued a statement yesterday distancing itself from the situation in Iceland, noting that most of the funding for its retail business was through international banks.

Subject: RE: BS: So it has come to this - Iceland
From: Emma B
Date: 04 Oct 08 - 07:28 AM

Baugur is indeed heavily involved in UK 'High Street' retail

'What has long been thought of in the international business community as a potential house of cards — the huge growth enjoyed by Icelandic banks and companies linked to them — could be about to come crashing down.

As they fret in Iceland, we should also worry. On the UK High Street, 40-year-old Jon Asgeir Johannesson is one of the kings. His realm takes in Hamleys, Karen Millen, Mappin and Webb, House of Fraser and much more.

The consequences of problems at ­Baugur can hardly be overestimated, especially in London. Companies in which Baugur has a stake employ 55,000 people in Britain. Household names such as ­Iceland, Debenhams and Whittard of Chelsea all feature in Jon Asgeir's £1.5 billion portfolio and are woven into Baugur's complex web of interests.

That, some observers say, is part of the problem. Baugur is a private company and is not known for its enthusiasm for transparency. Five years ago a Baugur associate in the United States, Jon ­Sullenberger, claimed he had filed fake invoices to disguise the purchase of a 62‑ft motor yacht, Thee Viking, for Jon Asgeir and his father, Johannes'

Icy storm blows through the High Street
Evening Standard 03.10.08

Baugur is a product of Iceland's so called ­business 'miracle'

A new generation of politicians in the 1990s scrapped currency controls, de-regulated the market and encouraged business pioneers, a number of whom had made a lot of money in Russia in the crazy years that followed the fall of the Soviet system.

In 2000 the 'Living Abroad' website quoted 'The standard of living is among the highest in the world"


a propos nothing really did you know that the English word berserk comes from Icelandic?

Subject: RE: BS: So it has come to this - Iceland
From: Rapparee
Date: 04 Oct 08 - 08:14 AM

Beware, Skarpi, of what happened in Germany following World War I.

But stand proud, you and your neighbors. Your ancestors weathered worse than this and you can do what your ancestors did.

Subject: RE: BS: So it has come to this - Iceland
From: John MacKenzie
Date: 04 Oct 08 - 09:06 AM

Well Skarpi, the one thing you don't seem to lack here on Mudcat, is 'Experts' and those who can use Google, to tell you something you already know.
It's not as if the UK isn't in the same pig shit, after the snouts have been in the same trough.

XG

Subject: RE: BS: So it has come to this - Iceland
From: freda underhill
Date: 04 Oct 08 - 09:56 AM

not an expert, Giok, but trying to support skarpi's thread. and yes, we're pretty nervous here in Oz, our dollar is falling.

freda

Subject: RE: BS: So it has come to this - Iceland
From: Rapparee
Date: 04 Oct 08 - 10:07 AM

We're ALL nervous....

Subject: RE: BS: So it has come to this - Iceland
From: John MacKenzie
Date: 04 Oct 08 - 10:21 AM

You're OK Freda, my friend.

XG

Subject: RE: BS: So it has come to this - Iceland
From: Ed T
Date: 04 Oct 08 - 10:24 AM

It is amazing that many world banks, that not that long ago grew internally fat (making massive profits), now have as much or more control of countries than the countries political systems. Must make the big lender countries nervious, that they may own countries that they can't sell in a fire sale.

Could this lead to more nationalization and an end to a "fat capitalistic investment system" (interconnected with $ lobby-political system) is not working..answering to no one ?

Seems like the world financial system is undergoing a financial (and possibly political) "trophic cascade".

Subject: RE: BS: So it has come to this - Iceland
From: katlaughing
Date: 04 Oct 08 - 04:01 PM

Skarpi, my Rog and I have been thinking about ever since you first posted about this. It is too bad your country seems to have fallen into the same "trough" as ours. It is a darn shame. I send you lots of love, support, and good energy/thoughts to carry you through whatever the challenges may be, as we are all facing over here, too. May all be well with you and yours.

luvyakat

Subject: RE: BS: So it has come to this - Iceland
From: GUEST,Lauro
Date: 04 Oct 08 - 04:28 PM

Listen, there is no need to get upset. I think most of us would be quite happy with these prices.

www.iceland.co.uk

Subject: RE: BS: So it has come to this - Iceland
From: olddude
Date: 05 Oct 08 - 01:18 PM

God Bless you and all of your wonderful people. Sometimes we all get caught up in our own problems and don't think about our other neighbors. Thank you for making us stop and think once in a while

Subject: RE: BS: So it has come to this - Iceland
From: Mrs.Duck
Date: 05 Oct 08 - 01:42 PM

We all live in precarious times. Good luck to you and yours, Skarpi and let's hope we all get through this crisis.

Subject: RE: BS: So it has come to this - Iceland
From: Ebbie
Date: 06 Oct 08 - 01:14 AM

Skarpi, do you have an update? Is there light out there?

Subject: RE: BS: So it has come to this - Iceland
From: skarpi
Date: 06 Oct 08 - 03:31 AM

well . the light is that the coverment is tryin to get help from
all around , and it should be able to tell us today what they are gonna do , if not the homes of many thousands of Icelanders will go down

Now I know this is goin on everywhere in the world , but some how
like one speciallist on the tv bloomberg said this hitting Iceland
in a harder way thatn it should be doin , so we´ll see now its even
talked about that the coverment will go away and let others take over
becouse they cant handle the problem , most of this problem
is homemade , but also that we do not have foreign currency to get stuff
from abroad , food , Gasoline and things like that .

so I must be :>)) about this all , other wise I cant go on like this .

all the best skarpi Iceland

Subject: RE: BS: So it has come to this - Iceland
From: Mr Red
Date: 06 Oct 08 - 12:55 PM

Hey Skarpi - you get more sunlight in the summer and more nightowl time in the winter. All we get is...................

Subject: RE: BS: So it has come to this - Iceland
From: Partridge
Date: 06 Oct 08 - 03:08 PM

Thinking of you Skarpi, I'm not sure what the answer will be, but I believe there will be one soon.

Vague I know, but I'm sure

much love

Pat xxxxx

Subject: RE: BS: So it has come to this - Iceland
From: Wyrd Sister
Date: 07 Oct 08 - 05:39 AM

If you ain't got nothing you got nothing to lose...

But times like these show us that even those of us who don't feel particularly well off have so much.

Good luck Skarpi, and everyone!

Subject: RE: BS: So it has come to this - Iceland
From: Emma B
Date: 07 Oct 08 - 05:54 AM

Indeed Wyrd Sister - at this time our thoughts should be with those caught up in this international crisis with no employment, health care provision etc.

Subject: RE: BS: So it has come to this - Iceland
From: Paul Burke
Date: 07 Oct 08 - 06:19 AM

I can't see a lot of people losing their homes in Iceland. It's not as though there's anyone else to buy them. You have lots of geothermal energy, and they can't take that off you either, unlike oil or gas. Iceland isn't huge, so you should be able to get most places by bike. You're surrounded by sea, so you should be able to catch enough fish for yourself. Supplemented by agriculture, even in the case of international financial catastrophe, I think you should be able to land on your feet. And of course you can while away the long winter nights playing and singing.

Subject: RE: BS: So it has come to this - Iceland
From: freda underhill
Date: 07 Oct 08 - 06:23 AM

Iceland has hit the news in Australia, Skarpi, and the view from down here confirms at your country is in a particularly difficult position. The Sydney Morning Herald said today that Russia will grant Iceland's central bank a loan of four billion euros (5.4 billion US dollars), and that the Icelandic Financial Supervisory Authority will take control of the country's second largest bank, Landsbanki. being a small country you are especially vulnerable,

freda

Subject: RE: BS: So it has come to this - Iceland
From: John MacKenzie
Date: 07 Oct 08 - 06:41 AM

Cycling over mountains is hard work Paul, as is growing crops when you only have a short summer.
Then of course, there's cycling in the long cold dark winter too!!
Skarpi was saying a couple of days age, they had snow already this year.
The fish thing might work, but the trade unions have said that as a quid pro quo for repatriating their pension funds invested abroad, back to Icelandic banks, they would like Iceland to join the EEC.
So the fish won't last much longer either.

XG

Subject: RE: BS: So it has come to this - Iceland
From: Emma B
Date: 07 Oct 08 - 07:24 AM

Iceland IS a member of the European Fee Trade Association (EFTA) and the European Economic Area (EEC).

The current prime minister, Geir H. Haarde, has long been skeptical of EU membership for Iceland.

When Iceland, back in the early 1990s, opted for the EEA as a long term basis for its relations with the Union, it was because EU membership presented serious problems. The single most important argument made against joining related to the Common Fisheries Policy.

The basic rule of the Common Fisheries Policy is that major fisheries management decisions are made not by member countries but by EU institutions a policy unacceptable to recent Icelandic governments as unacceptable to Iceland as the EU would most likely make demands for access to Icelandic waters for fishing vessels from Member States - Iceland's fishing zone covers as large an area as France and West Germany combined

Centre left parties maintained that the interest rates (higher in Iceland than in most of the EU) would go down with membership of the EU and the Euro but the government maintained that Iceland had also experienced stronger economic growth than most EU countries, with very little unemployment.

However only just 12 months ago the Iceland Review stated

'Joining the European Union is not at the center of the political debate in Iceland. Not many candidates addressed the issue during the run-up to last spring's elections, and of the country's five political parties, only the Social Democratic Alliance is in favor of becoming a member.

However, suddenly a related issue has cropped up: should Iceland be thinking of joining the European Monetary Union—the "euro club"?

This new debate is not led by politicians, but rather business leaders. In early September, Sigurdur Einarsson, chairman of Iceland's largest company Kaupthing bank, stunned the nation by claiming that the Icelandic currency, the krona, is no longer useful for the bank—nor for the Icelandic economy

Arguments aside, at the moment Iceland does not fulfill the criteria for joining the EMU. Inflation has been too high and interest rates are far too high. Until inflation is brought under control, Iceland will have to stay out.'

Subject: RE: BS: So it has come to this - Iceland
From: CarolC
Date: 07 Oct 08 - 08:02 AM

Iceland is in an excellent position to become energy independent, because there is now technology that makes it possible to generate an electrical current using heat, which Iceland has plenty of in the form of geothermal energy. And if Iceland becomes energy independent, it can also grow a lot of its own food in the winter in hot houses and hydroponically.   And it can fuel its fleet of vehicles using electricity generated in this way as well. The problem would be getting by until everything was set up to do this.

Subject: RE: BS: So it has come to this - Iceland
From: Emma B
Date: 07 Oct 08 - 08:18 AM

'Utilization of geothermal energy increased rapidly during the war and reached 25% of energy consumption in 1945.

The use of the major indigenous energy sources, hydropower and geothermal energy, has increased continuously at the expense of imported energy (oil) and in 2000 accounted for 70.6% of total national energy consumption.

No other country covers such a large proportion of its energy demand with geothermal energy ( 53.9% in 2000), while hydropower contributed 16.7%. Imported fossil fuels (oil and coal) amoounted to 29.4%. Total energy consumption in Iceland in 2000 was 137 PJ -petajoules.'

Adapted extract from "Iceland - The Republic", Handbook published by the Central Bank of Iceland.

link

Subject: RE: BS: So it has come to this - Iceland
From: Bee
Date: 07 Oct 08 - 08:24 AM

I think, Skarpi, that if the problem is so bad, you will find there won't be any foreclosing on homes - arrangements will be worked out somehow, because with so small a population, empty homes that no one can afford to buy will be a worse problem for mortgage holders than occupied homes whose owners can't pay all that the mortgage holders say they should.

It may look bleak, but hang on. Worst come to worst, it is only a two hour flight from Iceland to Nova Scotia; we are Northern neighbours and there must be something we can do, when we know what that might be.

Subject: RE: BS: So it has come to this - Iceland
From: Emma B
Date: 07 Oct 08 - 08:40 AM

The Icelandic internet bank Icesave has stopped UK customers withdrawing or depositing money since nationalisation

The notification from the bank, which is part of the newly-nationalised Landsbanki, did not offer any explanation for the move.

It is believed that 300,000 British UK savers have around £4bn invested in Icesave.

Landsbanki, which runs Icesave, is one of a handful of European banks operating in Britain which has the so-called passport exemption - meaning that when the bank fails, the first €20,000 (around £16,000) needs to be reclaimed from the Icelandic compensation system, not the UK system.

This morning the Icelandic central bank announced that it hoped to arrange a €4 billion loan from Russia Officials will travel to Moscow tomorrow for talks.

'The fate of Iceland, which has extensive interests in the UK, is seen as a warning for the rest of the world, after a long boom fuelled by debt

In an address broadcast on Icelandic television last night, prime minister Geir Haarde announced plans to rush through the emergency bill, supported by opposition parties, allowing the government to push through mergers between the battered banks or force them into bankruptcy

The emergency bill would also allow the government to take over housing loans held by the banks.'
- from today's Guardian

Subject: RE: BS: So it has come to this - Iceland
From: Jean(eanjay)
Date: 07 Oct 08 - 09:00 AM

Shares have plummeted again as a result of the situation with Icesave. It may be safer for us all to go back to keeping our "money under the bed" and just risk the burglars getting it all!

Anyone who has any money, that is.

Subject: RE: BS: So it has come to this - Iceland
From: John MacKenzie
Date: 07 Oct 08 - 09:11 AM

The European Economic Area aka the EEA
The EEC, or as it's now known the EU consists of 27 countries, and does not include Iceland.


XG

Subject: RE: BS: So it has come to this - Iceland
From: Big Mick
Date: 07 Oct 08 - 10:27 AM

Skarpi, my dear friend, you and your countrymen are in my thoughts and prayers constantly. One lesson of the Mudcat, where we become family-friends, is that we realize how this big blue marble is really just a series of communities with kinfolk in each one. We cannot live in a bubble. What happens here economically effects what happens everywhere. What is done to the environment in one place effects another. Allowing workers to be abused in one place causes job losses in another...... and on and on. We must care about Iceland, because in doing so, we are insuring the future of our kids.

I hope the voters of my country will get this, and stop this arrogance and return to the status of being a respected ..... and respectful ...... member of the world community. Too many lives in too many places count on it.

Be well, good friend. Remember your proud ancestry and do what you must to survive and take care of your family.

All the best,

Mick

Subject: RE: BS: So it has come to this - Iceland
From: Riginslinger
Date: 07 Oct 08 - 01:23 PM

They're getting a loan from Russia!

Subject: RE: BS: So it has come to this - Iceland
From: John MacKenzie
Date: 07 Oct 08 - 01:33 PM

Rouble in Mind ♫♫

Subject: RE: BS: So it has come to this - Iceland
From: skarpi
Date: 07 Oct 08 - 04:55 PM

well all , lets start :

Iceland isn't huge, so you should be able to get most places by bike.

Like John said , its not possible to go on bike in the winter time over the mountain s
and sometime in summer we get summerstorms witch can be bad .

Emma there are about 400.000 UK savers in ICESAVE .

Yes we are sending people to Moskva Russia to take care of a big
loan , 4 million euros , and also have Norway offer to help us
as always Norway ask if they can help .

Now people ask why Russia ? what is behind it ??
we´ll what I have heard to day is this :

the sailing way through the north pole ice is braking
and they will have their good will with Icelandic coverment .

Iceland has started process to find a oil in a so called Dracon section
in the North of Icelandic sea . ??

Russian company has got a land in North west of Iceland for a oilcleaningcenter .

and do they want to have access of the old Us naval airforcebase
in Keflavik ??

now Iceland has always had a lot of trading with Russia through the years alway back to the after WW 2 til the day today so it may seem harmless that they want to help us throught this .

I am told that Putin has agreed this process so this should be in real in next week ??

so what ever people think , I was watching Tv tonight to bank manager
of the Icelandic central bank witch he explained the things
witch are goin on in Iceland at the moment and after his words
I have faith in the process they are doin now it will take some time
but we will rise again , but its gonna be painful for some
not for others . You can all find out more in your news becouse
there are lot of people from all over the worlds news .


and I thought all earthquakes had come to me this year :>)

Love to you all , all the best Skarpi Iceland

Subject: RE: BS: So it has come to this - Iceland
From: Bee
Date: 07 Oct 08 - 05:31 PM

Here, skarpi - this place is not very far from where I live. Proves how hardy Icelanders are.

http://www.nova-scotia-icelanders.ednet.ns.ca/markland.html

Subject: RE: BS: So it has come to this - Iceland
From: Riginslinger
Date: 07 Oct 08 - 05:51 PM

"Now people ask why Russia ?"


         If you're going to borrrow money, you have to go where the money is!

Subject: RE: BS: So it has come to this - Iceland
From: Mo the caller
Date: 08 Oct 08 - 10:20 AM

I can't be very sympathetic to the UK people who have more than £50,000 in any bank. The limits of the compensation scheme were clearly set out (and weren't they lucky this happened Tusday not Monday, or it would have only been £35,00). If the UK government guarntees deposits without limit it would just encourage people to chase the best rates and the banks to take risks - and we've seen where that leads. Mind you, how long will it be before they can get at the £50,000 if they need it?

Subject: RE: BS: So it has come to this - Iceland
From: Jean(eanjay)
Date: 08 Oct 08 - 11:33 AM

Alistair Darling has promised Icesave customers that they will not lose any money. Perhaps he'll do the same with my shares that have just plummeted as a result of it all! I wish.

Subject: RE: BS: So it has come to this - Iceland
From: Jean(eanjay)
Date: 08 Oct 08 - 11:35 AM

I should have said British customers.

Subject: RE: BS: So it has come to this - Iceland
From: GUEST,Shimrod
Date: 08 Oct 08 - 12:00 PM

What is "leverage" and how does one "de-leverage"?

Subject: RE: BS: So it has come to this - Iceland
From: Jean(eanjay)
Date: 08 Oct 08 - 12:06 PM

At least someone is optimistic; see the last paragraph in this report.

Subject: RE: BS: So it has come to this - Iceland
From: Rapparee
Date: 08 Oct 08 - 01:03 PM

For such a little country Iceland sure is powerful!

REYKJAVIK, Iceland (AP) -- Iceland plunged further into financial crisis on Wednesday as it scrapped plans to nationalize a major bank, instead placing it into receivership, and abandoned attempts to put a floor under its falling currency by fixing the exchange rate.

Adding to Iceland's woes, the British government said that it planned to sue over lost deposits held by tens of thousands of Britons with Icelandic bank accounts.

The global credit crisis has exacted a heavy toll on Iceland, where the banking sector dwarfs the rest of the economy thanks to a stock market boom in the mid-1990s.

Those heavily exposed banks are now putting the entire country at risk, with Prime Minister Geir H. Haarde warning of "national bankruptcy."

The struggle of the government to deal with its top-heavy banking system was highlighted by a decision to place Glitnir, the country's third-largest bank, into receivership under the Icelandic Supervisory Authority. The decision came less than two weeks after the government announced it was taking a 75 percent stake in the bank for 600 million euros ($820 million). Central bank governor David Oddsson told TV station RUV late Tuesday that the "difficulties of the bank were much greater" than previously estimated.

The move into receivership gives Glitnir temporary protection from its debt obligations.

A receivership committee appointed by the regulator has replaced Glitnir's board and immediately began restructuring the bank with announcements that it plans to sell its Finnish and Swedish businesses.

Meanwhile, the Icelandic central bank, Sedlabanki, said it was giving up attempts to peg its currency to stop the kronur free-falling.

The bank had temporarily fixed the exchange rate of the krona at a level equal to 131 krona against the euro - on Tuesday morning.

Earlier Wednesday, it made a plea that "market makers in the interbank market support its attempts to strengthen the krona," which went unheeded.

"It is clear that there is insufficient support for this exchange rate; therefore, the Bank will not make any further such efforts for the time being," it said in a statement.

In Britain, Prime Minister Gordon Brown said that the government will take legal action to recover deposits belonging to 300,000 British account holders with the Icesave Internet bank after its parent, Landsbanki, was placed in receivership.

British savers have deposited millions of pounds in accounts through the collapsed Landsbanki's Internet operation, Icesave, which has suspended withdrawals.

British Treasury chief Alistair Darling said the British government would also guarantee all customer deposits at Icesave, even if they were above Britain's standard 50,000 pound ($88,000) protection plan because Iceland was refusing to meet its guarantees.

"The Icelandic government, believe it or not, have told me yesterday they have no intention of honoring their obligations here," Darling told the British Broadcasting Corp.

Darling added that savings bank ING Direct UK had agreed to buy more than 3 billion pounds ($5.3 billion) of deposits held by around 180,000 British savers with two other Icelandic-owned banks, Kaupthing Edge and Heritable Bank, which is owned by Landsbanki.

The speed of Iceland's downfall in the week since it announced it was nationalizing Glitnir bank caught many by surprise, despite warnings the country was the "canary in the coal mine" of the global credit squeeze.

Haarde, who has complained of a lack of support from other European nations, has sought a 4 billion-euro (5.47 billion) loan from Russia as the country scrambles to stop the collapse of its economy. It has also introduced emergency laws that give the government sweeping new powers to take over companies, limit the authority of boards, and call shareholder meetings.

Some support came from Sweden, where the central bank said Wednesday it would grant liquidity assistance to the Swedish arm of Icelandic bank Kaupthing with a loan of up to 5 billion crowns ($702 million) "to safeguard financial stability in Sweden and ensure the smooth functioning of the financial markets."

The intervention of the British and Swedish authorities underscores the effect that a full-blown collapse of Iceland's financial system would have on the rest of Europe, given the heavy investment by Icelandic banks and companies across the continent.

One of Iceland's biggest companies, retailing investment group Baugur, owns or has stakes in dozens of major European retailers - including enough to make it the largest private company in Britain, where it owns a handful of stores such as the famous toy store Hamley's.

Kaupthing has also invested in European retail groups, and racked up debts of more than $5.25 billion in five years to help fund British deals. The Icelandic government on Tuesday extended its own $680 million loan to Kaupthing to tide it over.

Against this tumultuous backdrop, Haarde vowed Tuesday that ordinary Icelanders would not pay the price for this spending spree and that his country will not default on its debt.

"Iceland has never defaulted on sovereign debt and won't," he said.

Subject: RE: BS: So it has come to this - Iceland
From: Thompson
Date: 08 Oct 08 - 03:05 PM

Iceland is the canary in the coalmine.

But we're all down there in that coalmine too.

Hold on to your seats, it's going to be a bumpy flight. As Eccles, head of the Fed in 1934, wrote:

"As mass production has to be accompanied by mass consumption, mass consumption, in turn, implies a distribution of wealth - not of existing wealth, but of wealth as it is currently produced - to provide men with buying power equal to the amount of goods and services offered by the nation's economic machinery.

"Instead of achieving that kind of distribution, a giant suction pump had by 1929-30 drawn into a few hands an increasing portion of currently produced wealth.

"This served them as capital accumulations. But by taking purchasing power out of the hands of mass consumers, the savers denied to themselves the kind of effective demand for their products that would justify a reinvestment of their capital accumulations in new plants.

"In consequence, as in a poker game where the chips were concentrated in fewer and fewer hands, the other fellows could stay in the game only by borrowing. When their credit ran out, the game stopped."

Sound familiar?

Subject: RE: BS: So it has come to this - Iceland
From: skarpi
Date: 08 Oct 08 - 03:38 PM

just came home from work , and I can tell you people in Iceland are angry
very angry . many thousand of people have lost their savings witch
they were gonna use for the old days coming .

I am told about 30 people investors so called are responceble for all this , people demands their arrest and their things that they own around the world will be frozen , I hope they go to jail and stay there for a long time . I still rememberthe france man who nearly put one the bank in france on the head , he went to jail .


I am worry for this coming weekend :

all the best Skarpi

P.s , Icelandic coverment will help to get money to save the people
who have money in ICESAVE , and what ever MrBrown or Mr Darlin have said today , are wrong .

and ofcourse such statements should never go through media .

Subject: RE: BS: So it has come to this - Iceland
From: Rapparee
Date: 08 Oct 08 - 04:52 PM

I hope that Iceland prosecutes those responsible, Skarpi. I can't think of a better way to foment revolution than by stealing people's savings.

I would like to see those responsible for this -- and they are worldwide -- prosecuted and jailed and made to pay back what they have stolen.

But first we have to get out of the problem and THEN we can go after the wrong-doers.

Subject: RE: BS: So it has come to this - Iceland
From: Thompson
Date: 08 Oct 08 - 06:52 PM

The trouble is that there's been a revolution going on, where corporations (or 'corporates', as it's now popular to call them) 'outsource' work to China or India or South America, where there are graduates who can work for a fraction of northern-hemisphere or western-hemisphere wages because of a lower cost structure.

However, it hasn't occurred to these corporations until now that the consumers who buy their goods did so with the wages that they and their brothers-in-arms paid.

Take me: normally I'd buy a few electronic toys each year. Not this year; I may buy a backup hard drive, but I'm thinking long and hard about it. No iPods, no fancy phones, no new scanners or cameras or TVs or DVDs. And I'm typical.

Sure, the Chinese and Indians will buy these goods, but not for the same prices charged to the westerners. The corporations are about to find that by outsourcing their work and wages, they've just downsized their profits too.

Subject: RE: BS: So it has come to this - Iceland
From: Rapparee
Date: 08 Oct 08 - 06:57 PM

I'm buying six PCs for the Library, a couple of new monitors (to replace ones that have failed) and some external hard drives. The PCs won't be the fancy kind I would have bought before, but basic PCs.

No new monitors unless we need them. No new scanners, no new much of anything that's not absolutely necessary.

Money's tight, and a bad winter could ruin my budget. Heck, a bad flu season could play havoc with it. And I don't know what's ahead except a very dark tunnel indeed.

Subject: RE: BS: So it has come to this - Iceland
From: Emma B
Date: 08 Oct 08 - 10:18 PM

Dozens of local councils risk losing hundreds of millions of pounds of taxpayers' money held in Iceland's stricken banks.

Town halls across the country may have to raise council tax and cut services as the repercussions of the collapse of the Icelandic economy broadened into a diplomatic row with Britain.

Alistair Darling, the Chancellor, pledged yesterday to make good all losses suffered by the 300,000 British savers caught by the collapse of Icesave, the online bank that went into receivership on Tuesday.

The move will cost the Treasury about £4.5 billion — and carried an implicit pledge from Mr Darling that he would do the same if other banks collapsed.

The Government also seized control of the British arm of Iceland's Kaupthing bank because it could not honour its obligations to customers.

Mr Darling expressed incredulity that Reykjavik was cold-shouldering British investors.
"The Icelandic Government have told me, believe it or not, they have no intention of honouring their obligations," he said. Britain started legal action yesterday in an effort to recover money belonging to Icesave customers.

The Government used anti-terrorism powers to freeze an estimated £4 billion of British financial assets in Landsbanki, Icesave's parent bank. A spokesman for the Treasury said that the 2001 Anti-Terrorism, Crime and Security Act was invoked as a "precautionary measure".

From The TimesOctober 9, 2008

'A local authority in Scotland risks losing up to £1m invested in a stricken Icelandic bank.

Perth and Kinross Council confirmed yesterday that it had a short-term investment of £1m in Glitnir Bank'

Subject: RE: BS: So it has come to this - Iceland
From: open mike
Date: 09 Oct 08 - 03:08 AM

sending good wishes for the best outcome...
Hope all goes well for you, and your country, Skarpi

Laurel

Subject: RE: BS: So it has come to this - Iceland
From: skarpi
Date: 09 Oct 08 - 03:28 AM

Emma .

Town halls across the country may have to raise council tax and cut services as the repercussions of the collapse of the Icelandic economy broadened into a diplomatic row with Britain.


Thanks to MrBrown and MR Darling , the Last Bank is gone Kaupþing bank
they ordered that he should be closed in London and they would take him over , not that I care not at all.

how in earth if people in Iceland is not goin to have work for next years to come how are they gona pay higher tax ??? those news men should try to write more careful .

All the best Skarpi

Subject: RE: BS: So it has come to this - Iceland
From: skarpi
Date: 09 Oct 08 - 03:32 AM

But first we have to get out of the problem and THEN we can go after the wrong-doers.


yes I agree and the nation now needs to stay close togehter to go through
this . they will be taken and arrested . there is no way those pricks will go away we will hunt them down soon as we can . they have not only got the nation bankrupt they have also got many people in other countrys
a bad thing .

akk B kv Skarpi

Subject: RE: BS: So it has come to this - Iceland
From: GUEST,Shimrod
Date: 09 Oct 08 - 06:40 AM

"Town halls across the country may have to raise council tax and cut services as the repercussions of the collapse of the Icelandic economy broadened into a diplomatic row with Britain."

So when have they ever needed an excuse in order to do those things?

Subject: RE: BS: So it has come to this - Iceland
From: Paul Burke
Date: 09 Oct 08 - 06:58 AM

THEN we can go after the wrong-doers.


They'll be all off down the road with all your (and my) cash stuffed in their pockets. Plenty of safe havens for anyone with half a billion dollars, and no questions asked.

As Richard Fuld told the House committee concerning his $480 million pay packet (OK it WAS over 8 years), "The majority of my compensation, sir, came in stock. The vast majority of the stock I got I still owned at the point of our [bankruptcy] filing."

No one asked him if he'd borrowed using that stock as security, and if he'd paid it back or just handed over the stock.

Subject: RE: BS: So it has come to this - Iceland
From: Emma B
Date: 09 Oct 08 - 07:34 AM

As a pensioner living in a rural area with very high local council tax that observation has considerable resonance Shimrod.

'Local authorities appealed to the government Wednesday to guarantee hundreds of millions of pounds of their savings invested in moribund Icelandic banks.

The calls from local councils -- responsible for cultural provisions, refuse collection and other social services -- came just a day after London threatened to take legal action against Iceland to ensure that individual British depositors had their savings returned.

One local authority, Kent County Council, has 50 million pounds deposited in Landsbanki's British subsidiary Heritable as well as Glitnir Bank.

Transport for London, the agency responsible for the capital's public transport, has a further 40 million pounds invested with Kaupthing Singer and Friedlander.'

Dorset County Council has temporary loans in Icelandic banks totalling £28.1 million.

The crisis does not cause "significant cash flow problems" in the short term, Dorset council said, but there would be budget implications if the cash is not recovered.

The Local Government Association said it had identified more than 20 councils in England and Wales with money deposited in Landsbanki's UK operations, including Heritable while some early reports give the figure as high as 40.


U.K. taxpayers will probably face a bill of at least 2.4 billion pounds ($4.1 billion) to compensate about 300,000 U.K. holders of accounts at Icesave, a unit of Landsbanki, the Financial Times reported.

The Local Government Association has called on Chancellor of the Exchequer Alistair Darling to extend the individual depositor savings guarantee to councils as well running to '10s of millions of pounds'

Subject: RE: BS: So it has come to this - Iceland
From: Mr Red
Date: 09 Oct 08 - 08:07 AM

I think there will be a lot of caution in investing with intstitutions that don't have answer to a government YOU can elect.

It was always part of the risk, and hind-sight is confirming it.

I don't have large amounts to invest, what I do have is in a building society, and not connected with ex-building societies (though they did try pushing such products, they no longer counter my arguements about the market being overheated).

For those not familiar with the British Building Soc system, they are mutual societies (we are members) with regulatories constraints on how they use your money (mostly mortgages with individuals).

The British banks that are causing all the problems here are the ex-building societies that demutualised, and got clever. Too clever.

Reagan and Thatcher can be seen now as the start and prime movers in the slippery slope. Before that, caution was based on the experience of those that saw the Great Depression first hand. Like my mother. Her ethos was: don't borrow money and if you have to (eg housing) pay it back before term. It makes for a slower economy, but an even slower, shallower downturn. We may very well see less global trade, because of the money markets' nervousness and the price of fuel.

Subject: RE: BS: So it has come to this - Iceland
From: SINSULL
Date: 09 Oct 08 - 08:21 AM

I feel like this is the end of a Monopoly game. The winner is either gloating or feeling guilty; the losers are talking about ordering a pizza. As always, deal with the "What is" and you will be fine - poor but fine.

Subject: RE: BS: So it has come to this - Iceland
From: Emma B
Date: 09 Oct 08 - 10:28 AM

Sinsull it may indeed be Monopoly money but the 'losers' in this 'game are real enough.

'THE Naomi House children's hospice is teetering on the brink of a major financial crisis by revealing it has a seven-figure sum at risk in the Icelandic banking crisis.

The hospice revealed that it has invested the sum in an Icelandic bank Kaupthing Singer and Friedlander.

The hospice for terminally-ill children has committed £5.7 million and the future of the money is now uncertain'

Hampshire Chronicle

Todays Times on line also looks at the impact on Icelanders

'Iceland: the land of cool turns bitter'
Iceland's financier-Vikings made their homeland trendy and wealthy - until the banking crisis left it with crippling debts

'Suddenly an island with a population of 300,000, seen for the past decade as the essence of cool - a successful nation where people couldn't stop partying - is on the brink of becoming a failed state.

Who to blame? How to survive? What did the islanders give up when they chased the money, forgot their roots and turned themselves into a Nordic Tiger?

For centuries Iceland had a fish-based economy, even fighting a war with Britain to keep its lucrative cod trawling grounds. Then it began exporting aluminium, and then, after free-market reforms introduced by the Thatcherite Prime Minister Davìd Oddsson, it rapidly privatised its banking sector and moved into the business of financial engineering - to such an extent that a handful of Icelandic banks, expanding aggressively, have ended up with liabilities more than eight times the national GDP.

That gold rush, at the beginning of this century, has spun the illusion of wealth. Dorrit Moussaieff, the jet-setting jewellery-designer wife of President Ólafur Ragnar Grimsson, set the tone, with her coterie of girlfriends - Rannveig Rist, the general manager of Alcan Iceland; Tinna Gunnlaugsdóttir of Iceland's National Theatre; artists and gallery owners

But it wasn't just a wealthy elite who surfed the Zeitgeist. Ordinary Icelanders were swiftly freed from the idea that they belonged to an impoverished society where the key question about a future bride was: is she a good housekeeper?

In the past five years, people's average wealth has grown by 45 per cent - and the money has gone into houses and cars, financed by 100 per cent loans based on a spread of foreign currencies. Now the krona is plummeting, loans are ballooning and thousands are defaulting. The only good news is for foreign visitors, for whom beer has at last become affordable

The new Vikings have been thriving on the cronyism and back-scratching culture of Reykjavik.
Since the beginning of the 20th century banks and government have worked hand in glove

Across the social spectrum, Icelanders agree: life has to change. You can't wish away global capitalism but you can change the way that elites manage that capital. The alternative is to see your country disappear down the plughole.'

Full report here

Subject: RE: BS: So it has come to this - Iceland
From: GUEST,heric
Date: 09 Oct 08 - 10:57 AM

>a handful of Icelandic banks, expanding aggressively, have ended up with liabilities more than eight times the national GDP. <

Extraordinary.

>Now the krona is plummeting, loans are ballooning<

Also extraordinary. Banks so "rich" would easily own the government, I guess, allowing them to invent and use a contract like that against the entire population. It's strange that they are not instantly nationalized (along with all utilities and other crucial industries.) Is the government that weak?

Subject: RE: BS: So it has come to this - Iceland
From: Amos
Date: 09 Oct 08 - 11:16 AM

Skarpi:

Just be careful of those big loans from Russia.

They've been known to get nasty in a pinch.


A

Subject: RE: BS: So it has come to this - Iceland
From: Mrs.Duck
Date: 09 Oct 08 - 11:46 AM

Heard the same on the news Emma. A number of local councils have invested huge sums in the Icelandic banks and it looks unlikely they will get it back which means council taxes will be put up to cover the cost!

Subject: RE: BS: So it has come to this - Iceland
From: Donuel
Date: 09 Oct 08 - 12:37 PM

Russia's rates are lower than Master Card.

Subject: RE: BS: So it has come to this - Iceland
From: Thompson
Date: 09 Oct 08 - 05:22 PM

America's been known to get nasty in a pinch too.

But this whole crash comes from greed, whether it's Russian or American or Chinese or British or international.

Subject: RE: BS: So it has come to this - Iceland
From: Emma B
Date: 09 Oct 08 - 05:35 PM

Can't argue with that!