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Posts tagged ‘Iceland’

Why Bank Bail in and Bail out Wont Work. Case study Iceland and Greece

By: Sam_Chee_Kong

As  most of us can remember that Iceland was the first country that went down  during the last Global Financial Crisis in 2008. During that time Iceland had  done something remarkable and that is during the five years prior to the crisis,  managed to transform its economy from a fishing industry to a mega hedge fund  country. Many of its citizens left their traditional trade which is fishing to  become fund managers and salesman. As a result Iceland’s banking assets  (physical assets + Loans + Reserves + Investment securities) grown to more than  10x its GDP of $14 billion.  With such  high leverage, when the financial crisis struck it is unable to defend its  economy and hence its house of cards collapsed.


The  purpose of this article is a post-event analysis of the performance of the Icelandic  economy that refuses a bailout as compared to Greece which went for a bailout  with the injection of funds from Troika. To simplify matters, we shall coin the bail-in and bail-out as (BIBO) for  short. Of course in the short term it helped stabilized the Greek economy for a  while but we want to know to what extent it had transformed the Greek economy  in the long run with the accompanying terms and conditions and austerity  measures. In this article we shall compare the performance of both the  economies of Iceland and Greece with the economic indicators or metrics below  from the year 2002 to the present. We believed we have been fed with too much  toxics by the mainstream medias which are also own by them that capitalized on the age old investment axiom of good-to-good……………………..

full article at source: http://www.marketoracle.co.uk/Article39892.html

Greece Exit, Euro-Zone Collapse, Spain and Portugal Will Follow Within 6 Months

By: Nadeem_Walayat

This analysis continues on from my last articlein light of the recent French and Greek elections where voters rejected economic austerity in favour of money printing Inflation stealth debt default as politically an smoke and mirrors Inflationary depression is being seen as far more palatable for populations than a deflationary depression slow motion economic collapse. However to be able to print money inline with the true state of the respective  competitiveness of euro-zone economies, then these countries governments have no choice but to exit the euro-zone, or be forced out as they one by one fail to follow through on agreed austerity measures.

Greece Slow Motion Economic Collapse in Progress

What may be lost in the noise that is the mainstream press is the fact that Greece has not been in a recession or even a depression, Greece has been in a state of slow motion economic collapse on the scale of past economic collapses such as that of Argentina but so far without the ability to default, devalue and inflate.

As the below graph illustrates that following the financial crisis of 2008, Greece had been following a similar economic trend trajectory to that of most western economies including that of the UK, US and Germany, however the real crisis began in late 2009 when the economic recovery from the pit of the Great Recession of 2008-2009 evaporated and the Greek economy began a slow motion collapse that has  so far seen Greek GDP in real terms contract by 16% since the 2008 peak, with no end in sight Unlike the V shape of the more regular debt default economic collapses such as that of Argentina’s of 2001 and more recently Iceland.

full article at source: http://www.marketoracle.co.uk/Article34625.html


Iceland’s former prime minister facing a criminal trial today!

By Independent.ie reporters

Monday September 05 2011

Iceland‘s former prime minister Geir Haarde is facing a criminal trial today over the country’s
2008 financial meltdown.

In a case that he describes as a “farce” and which his lawyers will ask the
court to dismiss, he faces allegations that he failed to prevent the crash and
subsequent crisis that sparked protests, toppled the government and brought the
economy to a standstill by collapsing its currency.Mr Haarde faces up to two years in jail if found guilty. The court, which could dismiss the charges, has never before convened in
Iceland‘s history.The ex-leader of the Independence Party is no longer in parliament and
stepped down from office in 2009 following widespread protests and treatment for
oesophageal cancer.”I will answer all charges before the court and I will be vindicated.” Mr
Haarde, 59, told Icelandic broadcaster RUV. “I have a clean slate. This charge
borders on political persecution.”

full article at source:http://www.independent.ie/world-news/europe/former-iceland-pm-on-trial-for-his-role-in-banking-crisis-2866795.html


This article demonstrates just how out of touch our government is when it comes to real
justice .The Former PM of Iceland is going on trial and what about our former Taoiseach Ahern .He is spending his time complaining he has lost his chance of becoming President because of good for nothings in his own party .I have said it over and over again this man and the rest of the cabinet of the last government should be brought to trial for treason. This con artist should be in jail along with various top civil servants and Bankers .If the
people of Ireland cannot rely on the government of the day to get justice then
we the people must take matters into our own hands. These crooks must  pay for their treachery!


David McWilliams ‘Too much regulation will stifle our banking sector’

David McWilliams has posted a new article, ‘Too much regulation will stifle our
banking sector’.

Yesterday the IMF published its fifth review of Iceland’s economy since the crisis began. The IMF declared Iceland’s economic progress “impressive” and disbursed a loan tranche of $225m (€136m).

Now if this sounds weird to you, it should do. This is the Iceland that defaulted on all its bank bondholders and this is the Iceland that the IMF warned would be cut off unless it paid all its foreign bondholders. Yet just two years later, the IMF declares that Iceland’s progress has been “impressive” and lends the country money!

full article at source : http://www.davidmcwilliams.ie/2011/06/08/too-much-regulation-will-stifle-our-banking-sector


Am I hearing right? Didn’t I hear this warning before wasn’t that what Sean Fitzpatrick said on our TV screens at the height of the housing Boom? I sent it because of light regulation we are in the mess we are in? I saw David Mc Williams’s latest TV appearance and I got quite a shock and the first thing that came to mind was well we have another Berti Ahern in a cupboard effort!

While I find myself agreeing with most things David says about the economy I do not agree with light regulation on the Banks and his new acting career might not be one of his better moves

Little Iceland Panics Big Banks

Monday, April 11, 2011 –

 by  Staff Report




Iceland Says No … The island nation may serve as an example for those who want capitalists to operate at their own risk. In a national referendum Saturday, Icelanders, for the second time, voted against a government proposal to pay the big losses of some of their bankers and their foreign customers, with 60% voting “No” and 40% in favor. For those of us who welcome capitalists, but want them to operate at their own risk, this hopefully sets an example for the rest of Europe. – Wall Street Journal

Dominant Social Theme: The Icelanders are at it again, irresponsible and unwilling to take up their burden. The wrath of the modern world shall surely be visited upon them. 

Free-Market Analysis: Yes, reluctantly, the Dutch and British must sue. If the verdict is not appropriately punitive and Iceland’s hardy fisherman stock does not learn its lesson in an illustrative fashion, then perhaps the Pentagon’s legendary, doomsday weather weapon, HAARP, shall be brought to bear; Iceland to be wiped, sadly, from the map by fire and ice. Over time, surely, its name shall be expunged from the history books; all mention of its miserable banks shall be redacted as well. What Iceland? 

For those of us who believe that the world and especially the West is headed in the wrong direction with its endless emphasis on centralization and consolidation leading inevitably to a “one-world order,” the saga of little Iceland versus the big banks is actually an inspiring tale. This little nation of 300,000 has twice now voted against accepting a nearly US$7 billion national debt – accrued by several reckless Icelandic financial institutions – that would make every citizen responsible for their banks’ actions and the equally rash actions of the Dutch and British governments.

The problem is aptly summed up by a splendid little article in the Wall Street Journal (excerpted above) by Hannes H. Gissurarson out of Reykjavik, Iceland. He explains the evolution of the contretemps as follows:

How Icelandic taxpayers got stuck with this bailout bill is a strange saga. When the international financial crisis hit bottom in the fall of 2008, it became clear that the Icelandic Insurance Fund for Depositors could not cover all the liabilities of the foreign branches of the private Icelandic bank Landsbanki. In order to avoid a general run on their own banks, the British and the Dutch governments decided to reimburse depositors, for not only the principal, but also the interest due, in Landsbanki branches in their countries, up to a certain level.

full article link:http://www.thedailybell.com/2037/Little-Iceland-Panics-Big-Banks.html


Whatever you say ,morality in on the side of Iceland a corrupt Financial system has tried to enslave the ordinary people with private gambling debts and the people have spoken and rightly so!

If only we in the so called Irish republic had the same balls and get up and tell the international bankers and their cronies and lackeys here in the Irish government where to go .

Well done Iceland !

IMF’s statement on Iceland

13/02/2011: IMF’s statement on Iceland

by Dr. Constantin Gurdgiev

I twitted about the latest conclusions from the IMF on the state of Icelandic economy post-banks collapse. Here are the exact details of the IMF statement and the statement itself. Emphasis and comments in brackets are mine:

Financial sector restructuring is moving forward [in contrast, one may add to Ireland’s]. Savings banks and non-bank financial institutions are being recapitalized [in Ireland’s case, recapitalizations of the banks have been predominantly wiped-out by the continued writedowns, so net increases in actual capital have been negligible], and the supervisory framework is being strengthened by amendments that will be enacted in the coming months [no serious far-reaching amendments have been introduced in Ireland since the beginning of the crisis and the marginal ones that were are yet to be enacted].

“Moreover, recent agreements to restructure the debts of households and small enterprises will help put households, corporations and banks on a more secure financial footing, which is essential for a sustainable recovery [this stands in contrast with what has been happening in Ireland. In addition this directly and indisputably puts the blame for the policy errors in the Irish case onto our Government and EU shoulders, for it is clear that within the EU/IMF deal framework, the IMF was basing its policy proposals on their experience in Iceland].


Irish ten year  sovereign bonds


Greek ten year sovereign bonds:

Both courtesy of Goldcore, both are daily yields over 1 year.

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