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Old 10-02-2008, 08:59 PM   #16
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Ya well when people come over we like to make sure they arn't getting fuck around. Union, most of the time, have higher wages, better jobs and more work in general. Is he still over here?
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Old 10-02-2008, 09:43 PM   #17
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I thought this was gonna be about global warming.
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Old 10-03-2008, 03:16 AM   #18
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Doesn't surprise me at all. I wrote a paper about Iceland's situation in July, and it was pretty predictable that if the crisis were to break out again (which was predictable as well), Iceland would be fucked.
The problem with Iceland was mainly that they privatised their bank pretty rapidly, put the wrong people in charge and before any system was set up to provide a real basement for the structure the banks were already out first doing huge business in carry trading, and later in expanding and markets like CDO's etc. They were hedge fund paradise due to an interest rate of around 12 to 15 percent.
The Guardian pretty early called Iceland "a canary in a coalmine" because when the credit crisis in the US first broke Iceland was immediately affected.
Both banks and politicians have been outrageously ignorant about the situation they were in, neglecting the people whose assets they just risked.
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Old 10-04-2008, 09:53 PM   #19
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The party's over for Iceland, the island that tried to buy the world | World news | The Observer

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The snow has arrived early in Reykjavik after an unusually long and warm summer. The freeze has brought out the ghostly green haze of the aurora borealis - the Northern Lights - the shape of which shifts dramatically across the tiny city's black skies.

The bars and restaurants of Iceland's capital are packed, the Range Rovers and BMWs are parked nose to tail all along the streets of the central 101 district, and music is pumping from a black stretch Hummer limousine cruising by.

'What can we do? Its difficult times but we've spent all day talking about it, watching the news getting worse and worse. We had to go out and be with friends. Maybe it's like the party at the end of the world,' says Egill Tomasson, 32, sitting in the Kaffeebarinn bar.

Iceland is on the brink of collapse. Inflation and interest rates are raging upwards. The krona, Iceland's currency, is in freefall and is rated just above those of Zimbabwe and Turkmenistan. One of the country's three independent banks has been nationalised, another is asking customers for money, and the discredited government and officials from the central bank have been huddled behind closed doors for three days with still no sign of a plan. International banks won't send any more money and supplies of foreign currency are running out.

People talk about whether a new emergency unity government is needed and if the EU would fast-track the country to membership. On Friday the queues at the banks were huge, as people moved savings into the most secure accounts. Yesterday people were buying up supplies of olive oil and pasta after a supermarket spokesman announced on Friday night that they had no means of paying the foreign currency advances needed to import more foodstuffs.

This North Atlantic volcanic island, which is the size of Cuba, with a population of 320,000 - the size of Coventry's - is an unlikely player on the global financial stage. It is famous for its fish, geysers and for winning the UN's 2007 'best country to live in' poll. But Iceland built its extraordinary wealth on the crest of the worldwide credit boom and now the crunch is sweeping it away, bankrupting a people for whom the past eight years have been, for most of them and by their own admission, one long party.

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'The Icelandic psyche is an important part of all of this,' says Hellgrimur Helgason, who writes an outspoken newspaper column which exposes feuds between Iceland's ruling class and its entrepreneurs. He is also the author of 101 Reykjavik, a popular novel populated by 'Krutt-kynslotin' characters.

'Before the market reforms the country had stagnated, no one thought Icelanders could be businessmen. We were poor fishermen or farmers, so it had an incredible effect on confidence when we saw these young men out buying up British and Danish companies. Everyone grabbed at the new opportunities like children. Really, it was no surprise that Hamleys toy shop was one of the first purchases.'
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Old 10-04-2008, 09:55 PM   #20
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Doesn't surprise me at all. I wrote a paper about Iceland's situation in July, and it was pretty predictable that if the crisis were to break out again (which was predictable as well), Iceland would be fucked.
The problem with Iceland was mainly that they privatised their bank pretty rapidly, put the wrong people in charge and before any system was set up to provide a real basement for the structure the banks were already out first doing huge business in carry trading, and later in expanding and markets like CDO's etc. They were hedge fund paradise due to an interest rate of around 12 to 15 percent.
The Guardian pretty early called Iceland "a canary in a coalmine" because when the credit crisis in the US first broke Iceland was immediately affected.
Both banks and politicians have been outrageously ignorant about the situation they were in, neglecting the people whose assets they just risked.
Yep, the 'carry trade' was a big part of it, if you read the article from the Guardian above it says that local people were taking out loans in Yen or Swiss franc to buy cars in Iceland. Crazy stuff.
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Old 10-04-2008, 10:21 PM   #21
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I've heard they even financed their houses this way. They didn't really know the consequences of their doing, or that rates tend to go up and down.
In 2006, the Mercedes seller in Reykjavik sold more top-class Mercedes than in the entire of Sweden.
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Old 10-04-2008, 11:36 PM   #22
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When everyone was extremely rich in Iceland - you know, last month, it was with money that they never have earned. Now those who were extremely rich are just normally rich, but they think they are poor. They were spoilt, spending billions.'
This quote tells a lot.
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Old 10-05-2008, 12:09 AM   #23
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I visited there in 2005 - it definitely had a bubble feel to it. Prices for everything were insanely high. Now it's easy to see why. They don't export much besides fish and wool I think.
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Old 10-05-2008, 12:23 AM   #24
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They have started with fishery equipment, some ferro-sillicon, other specialized high-tech equipment and are attracting more and more aluminium producers to set up smelters there as their energy costs almost nothing thanks to their thermo- and hydro-energy supply. New smelters are said to be finished this fall. But it's nowhere near being competitive and it just is no structure to rely on. They made themselves so dependent of first the carry trade (there was a light crisis in 2006 when the Japanese central bank suddenly raised interest rates which should have been a warning) and later from all the money the hedge funds were investing with Icelandic banks (just think of it, you have several billions of dollars and get 12 percent and more on it). It's so painful to see how they ran into this mess blinded by huge profits.
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Old 10-05-2008, 12:31 AM   #25
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Ireland is next to be targetted, then Spain. Then Denmark, then the Netherlands.

The Eurozone common currency area will collapse, hoisted on the arrogance of German control of the ECB.
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Old 10-05-2008, 12:46 AM   #26
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I am genuinely curious, could you elaborate on the "German control".
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Old 10-05-2008, 12:51 AM   #27
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I am genuinely curious, could you elaborate on the "German control".
The ECB policy of low interest rates in the early 2000's was, quite obviously, determined by Germany.

The policy was correct for Germany, but it was completely inappropriate for other Euro economies, particularly Spain, Portugal and Ireland.

Nick Ridley, a former British Minister, claimed back in 1990 that the European project was being hijacked by German interests.

I'm not entirely convinced he was wrong.
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Old 10-05-2008, 12:56 AM   #28
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attracting more and more aluminium producers to set up smelters there as their energy costs almost nothing thanks to their thermo- and hydro-energy supply. New smelters are said to be finished this fall.
Just read up on that. I guess it's no coincidence that Alcoa's stock is at a 5 year low. Metals demand is way down.
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Old 10-05-2008, 01:03 AM   #29
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The economic power of Germany notwithstanding, I rather find it hard to imagine that all other countries would hold still if Germany was "obviously" controlling the ECB, especially when it was so much to their disadvantage.

Margaret Thatcher was convinced a re-unified Germany would result in another war.

Whoever knows, if anything of that were to be true I also would be very happy to find out soon, as it would entirely undermine the independence of the ECB.
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Old 10-05-2008, 01:51 PM   #30
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Now, I will scare you for real.

Ireland could be next.

The bank deposit guarantee plan is a major gambit that may or may not come off.

But the Med countries are in the same position, pretty much.

We do live in interesting times.

But on balance I do not think Ireland, Spain, or Greece will go bankrupt.
what kind of things would happen if a country goes bankrupt?
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