dagblog - Comments for "Arise, ye (Icelandic) prisoners of starvation!"

Did you fall from the top

Bwakkie — Sat, 16 Apr 2011 21:10:36 +0000

In reply to OMG! Where are you?

Did you fall from the top floor of that 300 year old barn?

Ack! Let me know if I can help.

xoxoxoxo

OMG! Where are you?

Bwakkie — Sat, 16 Apr 2011 21:01:45 +0000

In reply to replies will be scarce for

OMG! Where are you?

replies will be scarce for

jollyroger — Sat, 16 Apr 2011 20:37:33 +0000

In reply to Arise, ye (Icelandic) prisoners of starvation!

replies will be scarce for awhile--recovering from spinal cord surgery (yuck--don't ask). can't hardly type.

Hey Jolly....Bill Mitchell,

EmmaZahn — Mon, 11 Apr 2011 17:10:07 +0000

In reply to Arise, ye (Icelandic) prisoners of starvation!

Hey Jolly....

Bill Mitchell, MMT-er extraordinaire, writes about Iceland in his latest post:

http://bilbo.economicoutlook.net/blog/?p=14128

Biased to his POV, which I mostly share. Thought you might enjoy reading it.

Nice catch. probably not

Obey — Mon, 11 Apr 2011 15:15:12 +0000

In reply to There was a paragraph in the

Nice catch. probably not going to make a huge difference in the final count though.

I think, from reading the Icelandic defence campaign's little pamphlet linked above, that the main variable now is who gets reimbursed from the sale of Landsbanki's London assets. It's not clear whether Iceland gets to pay off their debts to the UK and ND with the proceeds or whether the UK repays itself - inter alia for the deposits reimbursed above GBP 18.000 - with some portion of it.

There was a paragraph in the

EmmaZahn — Mon, 11 Apr 2011 14:30:00 +0000

In reply to That link of yours is about

There was a paragraph in the second Guardian article that piqued my curiosity:

"Another group of savers with investments worth £698.7m opted to wait until the maturity date of their fixed-rate accounts to receive their compensation, according to the FSCS."

I wonder how that turned out.

Since both articles are very specific about Iceland agreeing to cover £18,000 in losses, the question becomes what were the actual losses on the accounts after all the investments matured?

Icesave reminds me very much of Reserve Primary here. Sure it broke the buck and chaos ensued but it eventually paid out 99¢ on the Dollar but it has held back some money for lawsuits and other claims that are still pending so final losses are still fuzzy. Have Icesave's actual losses fully realized and tabulated yet?

I really do not know and am

EmmaZahn — Mon, 11 Apr 2011 14:07:31 +0000

In reply to Confusion! I came upon the

I really do not know and am not sufficiently incentivized to find out; however, given the emergency government guarantees after the crash, it does make one wonder.

My personal preference is that governments acknowledge and accept that they are the real retail bankers and offer insured banks accounts and other services direct. They can still offer to insure private bank accounts, just bump up insurance premiums to the levels charged by private insurers. The way things are set up now is just an invitation for taxpayers to be looted by sharp banksters.

That link of yours is about

Obey — Mon, 11 Apr 2011 14:05:47 +0000

In reply to Confusion! I came upon the

That link of yours is about how the government structured the guarantees as the banks assets got impaired. They rightly didn't go beyond their basic legal obligations and let foreign investors - bondholders et al - eat their losses. But there is also a lower bound to their legal obligations as regards foreign deposits. I.e. it wasn't up to them at that point - when the banks started failing - to decide to let foreign depositors get it in the neck. Their original licence to bank within the EU was conditional on them guaranteeing deposits up to 20.000 euros. They can't just opt out when the banks start going belly up.

As an internet bank Icesave was special to that extent. Like I said above, when the Icelandic banks operated within the EU through local subsidiaries - like Kaupthing did in the UK - then the Icelandic authorities had no obligation to compensate UK depositors. Those losses were eaten by the UK authorities, because the UK authorities had the regulatory oversight over those subsidiaries. In the case of Icesave their regulator remained the Icelandic central bank.

As for my link above, looking a bit closer at it I'll stand by my original pov. On the cover sheet they claim that the 6 bn dollar demand from the UK and the Netherlands comprises compensation for more than just the obligatory 20.000 per deposit. But then in the details you see that they concede the sum involves only losses up to that statutory limit and no more. In short, the Icelandic in defence campaign really has no leg to stand on. Their arguments are pretty weak tea if you read that fact sheet.

So, sorry dude, I don't see too much new shit coming to light here...

;0)

Confusion! I came upon the

jollyroger — Mon, 11 Apr 2011 13:44:48 +0000

In reply to Was I ever wrong. Not about

Confusion! I came upon the opposite contention (see link above), ie, that the landsbanki deposits were NOT part of the normal govt guarantee (maybe Icesave was different??)

Was I ever wrong. Not about

EmmaZahn — Mon, 11 Apr 2011 13:09:33 +0000

In reply to Arise, ye (Icelandic) prisoners of starvation!

Was I ever wrong. Not about Iceland's voters' choice. That still seems wise to me. Even more so now after losing a beautiful hour or so yesterday reading about this farce. Since the dispute was between governments I originally assumed the irate depositors were institutional and not retail. Well, you know what happens when one assumes.....

I did turn up a couple of interesting Guardian UK articles from shortly after ICESAVE suspended withdrawals that were helpful reminders of the general financial chaos at the time.

Wednesday 8 October 2008 Icesave deposits guaranteed

Monday 22 December 2008 Icesave customers get their money back

Both UK and Iceland governments overreacted and, in hindsight, did foolish things. For example, Iceland nationalised Landsbanki and some official apparently agreed to pay the first £18,000 that [UK] people lost. While someone at UK Treasury told the Guardian, "The government will guarantee that no retail depositor will lose money as a result of Icesave's collapse. Their money is safe and secure." and added that the guarantee extended beyond the UK's Financial Services Compensation Scheme (FSCS), which protects up to £50,000 of savers' cash.

Those are just examples. There were many more missteps on both sides leading up to where both are now. This should go to court. It must seem like sheer Nirvana for attorneys on both sides.

Yes, definitely farce.