Torches come out in Iceland over Debt Payments

[seanm123]

Will the MSM cover this?






http://www.wealthdaily.com/articles/...-protests/2252

[metalman]

Re: Torches come out in Iceland over Debt Payments

what a pack of lightweights those icelandic oligarchs are. you don't do the math for the populace... 13,000 euros per capita... to bail out your personal investments & walk right into a referendum trap. dummies. you bring the economy to its knees & get the central bank & treasury to beg you to let them to use the citizens' money to bail out your personal investment to save the economy. that's how it's done here in the usa! sheesh.

[rj1]

Re: Torches come out in Iceland over Debt Payments

Will the MSM cover this?

http://www.wealthdaily.com/articles/...-protests/2252

Seen a good bit today actually (Telegraph, Financial Times, Stratfor).

[stanley2008]

Re: Torches come out in Iceland over Debt Payments

what a pack of lightweights those icelandic oligarchs are. you don't do the math for the populace... 13,000 euros per capita... to bail out your personal investments & walk right into a referendum trap. dummies. you bring the economy to its knees & get the central bank & treasury to beg you to let them to use the citizens' money to bail out your personal investment to save the economy. that's how it's done here in the usa! sheesh.

I wonder if Iceland's small population gives them a sense that their individual opinions and actions matter, which leads to actually doing something. My guess is that at least a quarter of USA's population are just as angry as the Icelanders at our govt. bailouts but feel that to protest would be useless.

[Rajiv]

Re: Torches come out in Iceland over Debt Payments

I wonder if Iceland's small population gives them a sense that their individual opinions and actions matter, which leads to actually doing something. My guess is that at least a quarter of USA's population are just as angry as the Icelanders at our govt. bailouts but feel that to protest would be useless.

I would assume that is indeed the case. In smaller communities, people tend to know each other, and feel that they have the ability to influence other people. In larger communities, that feeling is lost, and one feels alienated.

At the time of the American Wars of Independence, the population of the 13 colonies was only 2.1 million -- in other words, a few hundred thousand at most in each of the colonies -- out of which, a very small percentage had the right to vote (white protestant male landowners)

Democracy really only works in small groups!

[Diarmuid]

Re: Torches come out in Iceland over Debt Payments

Seen a good bit today actually (Telegraph, Financial Times, Stratfor).

Thanks for the links and robust commentary and analysis of said :rolleyes: - if you insist on setting standards for others, is it not incumbent on you to at least live up to them yourself?

[rj1]

Re: Torches come out in Iceland over Debt Payments

Thanks for the links and robust commentary and analysis of said :rolleyes: - if you insist on setting standards for others, is it not incumbent on you to at least live up to them yourself?

Feel free to find in that post where I intentionally misled people or converted something unrelated to fit a pre-conceived theory of mine in an effort to convince the forum audience that I'm smarter than most other people. And I offered analysis in reference to the question of the original poster that was relevant to the topic at hand by directly answering his question. Feel free to go through Mega's posts and see how often that occurs.

But anyway, here you are.

Telegraph editorial (negative toward Iceland's president): http://blogs.telegraph.co.uk/finance...tricken-banks/

Telegraph news article: http://www.telegraph.co.uk/finance/f...te-the-UK.html

FT news article: http://www.ft.com/cms/s/0/a6b60178-f...nclick_check=1

FT columnist analysis: http://www.ft.com/cms/s/0/2566901a-f...44feab49a.html

As for Stratfor, you can go to http://www.stratfor.com/ and see the title of the article there. If you wish to read it, you can subscribe.

[nitroglycol]

Re: Torches come out in Iceland over Debt Payments

Warner's opinion piece in the Telegraph that you link to is a bit puzzling:

Obviously, the issues are more complex than they seem. They always are in cases like this. When the Icelandic banks went belly up, Britain, in pursuit of its policy that no British depositor should lose a penny because of the banking crisis, unilaterally compensated UK deposits a hundred per cent. So did the Netherlands.

As it happens, there was no legal obligation on any of these countries to do this. At the time, the British deposit protection scheme insured only 90 per cent of any deposit up to a maximum of £35,000. The European standard, which Iceland complied with, was even less generous, insuring only the first €21,000 of each deposit. As I understand it, Iceland does not dispute the liability under the European convention that ruled at the time.


Britain’s decision to seize the UK assets of Icelandic banks then compensate all UK depositors in full was one taken entirely of its own volition – it was part of Britain’s general response to the banking crisis, when it was thought important to confidence in the banking system that nobody should lose any money.


All the same, it is also the case that when push comes to shove, national governments should stand behind the international liabilities of their home grown banks. Think what would have happened if Britain had similarly attempted to cast aside the international liabilities of Royal Bank of Scotland when it too was threatened with insolvency.

I'm not as dogmatic as some here on the issue of bailouts; I can see situations in which a bailout might be the best option. But Warner is implying that Iceland has an obligation to do so. Now I'm no expert, but I've never heard of any principle of international law that obligates a sovereign nation to bail out private corporations, even if those corporations are banks.

Am I missing something here?

[rj1]

Re: Torches come out in Iceland over Debt Payments

Warner's opinion piece in the Telegraph that you link to is a bit puzzling:



I'm not as dogmatic as some here on the issue of bailouts; I can see situations in which a bailout might be the best option. But Warner is implying that Iceland has an obligation to do so. Now I'm no expert, but I've never heard of any principle of international law that obligates a sovereign nation to bail out private corporations, even if those corporations are banks.

Am I missing something here?

You're right, for the entire world, there is no obligation to do so.

However, in the European Union there is an obligation to cover your banks' debts to people outside your borders (not sure if that's worldwide or just inside the EU, but I read it yesterday in an article). And Iceland has an application to join the EU that is being pushed by the controlling party currently in the Icelandic Parliament that sponsored this bill. They were the opposition before this crisis took place and were more EU-friendly than the party forming government that was forced to resign power as that party were more euroskeptic. So a main reason the party in power now passed this bill is as a condition to join the EU which was the primary stipulation for Iceland being allowed in. So without the full debts being covered so that the British and Dutch governments receive back their money for the Icesave accounts that they fully guaranteed, it's likely the British and Dutch will block Icelandic membership (just as Cyprus are stopping Turkey from any closer cooperation with the EU or potential future membership due to Turkish Cyprus), and UK Chancellor of the Exchequer Alistair Darling yesterday said as much. For the British, who knows their position on it long-term though as the government will be changing in a few months. I can't speak for the Dutch.

There is a much broader issue at stake here that will have consequences in the long-term than just Iceland. Greece is in hopeless financial shape and their socialist-ran government are doing the best they can to ignore it, and this is a member of the euro. Latvia needed an IMF loan to avoid bankruptcy. Spain is not in good shape and their prime minister's public stance is the financial problems at home are an international invention. Ireland is also in trouble but their government at least appear resigned that they have to do the hard slog. Austria and Sweden have massive loan exposure for their banks in Eastern Europe. All eurozone members save Latvia, Sweden, and Iceland. Lots of other countries have problems to a smaller extent but all these countries' issues cannot be isolated outside of the Euro System. And this is only Europe we're discussing. Now, Iceland is relatively tiny. Austria? Spain? These are much bigger countries with much larger effects on the overall system. And none of the countries in the eurozone can devalue their currencies like Iceland right now can to help them slog through.

[nitroglycol]

Re: Torches come out in Iceland over Debt Payments

However, in the European Union there is an obligation to cover your banks' debts to people outside your borders (not sure if that's worldwide or just inside the EU, but I read it yesterday in an article).

OK, but the article says that the EU only requires deposits to be insured up to €21,000 per account, and that Iceland "does not dispute" this liability. So is it that the UK and the Netherlands are demanding that they cover the full amount as they did for their own citizens, and Iceland refuses, or is Iceland not ponying up the €21,000 per account, even while saying they know they're supposed to? I'd be more sympathetic to Iceland in the first case than the second.

[Diarmuid]

Re: Torches come out in Iceland over Debt Payments

OK, but the article says that the EU only requires deposits to be insured up to €21,000 per account, and that Iceland "does not dispute" this liability. So is it that the UK and the Netherlands are demanding that they cover the full amount as they did for their own citizens, and Iceland refuses, or is Iceland not ponying up the €21,000 per account, even while saying they know they're supposed to? I'd be more sympathetic to Iceland in the first case than the second.

This has been discussed in some detail here, you may find some answers to some of your questions there, if you have already seen the thread, apologies.

http://www.itulip.com/forums/showthr...Hudson+Iceland

[nitroglycol]

Re: Torches come out in Iceland over Debt Payments

Thanks. Missed that.

[Rajiv]

Re: Torches come out in Iceland over Debt Payments

Well Ilargi had some words to say on this over at the Automatic Earth.

Iceland, or Size matters

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And what do we feel about this, who are not directly affected by any of it? Well, try this one on for size. If you allow me to numb and dumb down the numbers a bit, the US at 308 million citizens is about 1000 times bigger than Iceland (320,000). Which means that the US equivalent of what the British and Dutch are demanding from Icelanders would be, loosely, $6 trillion. Now what would you say the odds are that the American people would agree to pay that kind of money, if it were payment for what their banks have (mis-)done in the past, to a group of foreign investors? Let's say Chinese and Japanese?

I may be wrong, of course, but I have the feeling that I know what Americans would think of that. They'd be marching in the streets, on their way to embassies and consulates, if not private businesses. They'd say: we have a hard enough time ourselves as it is, and we ain't paying no foreigners who weren't making sure they knew what they were doing.

The same reaction would come in London and Amsterdam as well, naturally. Funny thing is that the governments there were very quick to guarantee their citizens' losses, and only after that claimed them back from Reykjavik. There doesn't seem to be any legal obligation for them to do so, it looks more like an election-related issue. There are all sorts of depositor protection schemes in place, that's true enough, but everyone could have known that the established $30,000 guarantee from Iceland for every depositor account wasn't worth much, given that it’s backed only by the full faith and credit of 320,000 people. Britain is what, 200 times bigger than that?

But in the end, as I'm pondering all this, what is probably the most interesting part of it is that the American people ARE in fact in the same boat as the Icelanders. The main difference between them may well be that the latter stand up for themselves, where the former don’t understand what's going on.
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[GRG55]

Re: Torches come out in Iceland over Debt Payments

Well Ilargi had some words to say on this over at the Automatic Earth.

Iceland, or Size matters

"If Dubai can default, why can't we..." ;)