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BS: So it has come to this - Iceland

Jean(eanjay) 08 Oct 08 - 11:35 AM
GUEST,Shimrod 08 Oct 08 - 12:00 PM
Jean(eanjay) 08 Oct 08 - 12:06 PM
Rapparee 08 Oct 08 - 01:03 PM
Thompson 08 Oct 08 - 03:05 PM
skarpi 08 Oct 08 - 03:38 PM
Rapparee 08 Oct 08 - 04:52 PM
Thompson 08 Oct 08 - 06:52 PM
Rapparee 08 Oct 08 - 06:57 PM
Emma B 08 Oct 08 - 10:18 PM
open mike 09 Oct 08 - 03:08 AM
skarpi 09 Oct 08 - 03:28 AM
skarpi 09 Oct 08 - 03:32 AM
GUEST,Shimrod 09 Oct 08 - 06:40 AM
Paul Burke 09 Oct 08 - 06:58 AM
Emma B 09 Oct 08 - 07:34 AM
Mr Red 09 Oct 08 - 08:07 AM
SINSULL 09 Oct 08 - 08:21 AM
Emma B 09 Oct 08 - 10:28 AM
GUEST,heric 09 Oct 08 - 10:57 AM
Amos 09 Oct 08 - 11:16 AM
Mrs.Duck 09 Oct 08 - 11:46 AM
Donuel 09 Oct 08 - 12:37 PM
Thompson 09 Oct 08 - 05:22 PM
Emma B 09 Oct 08 - 05:35 PM

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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.


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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"?


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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.


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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.


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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?


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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 .


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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.


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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.


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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.


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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'


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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


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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


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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


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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?


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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.


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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'


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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.


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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.


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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


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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?


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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


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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!


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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.


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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.


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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!


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