Tuesday, 12 April 2011

Icesave and the Icelandic Referendum

Look, I like Iceland. I like the scenery, the tons of stuff to do and the fact that 90% of the women are hot. Doesn’t stop them being a bunch of thieving bastards though. The simplified version of what happened is this:

The Icelandic government Passported their financial institutions and guaranteed minimum levels of protection for savers so they could go after UK money. The Icelanders did this to earn more money from taxes so that their citizens could enjoy more than one £35.00 Rum and Coke on the weekends in downtown Reykjavik. The banks in Iceland screwed up by doing pretty much what Northern Rock did – rely on excess levels of liquidity in the world’s financial markets. When this magic tap turned off they realised that the jig was up and they were going bankrupt. A mere hours before the announcement was made they transferred money from British and Dutch investors to Icelandic investors - one of the big names can be found here – with the assistance of the Icelandic government.

The reason they did this was very simple, there’s 300,000 people in Iceland and even though they are all called Dottir or Son, everybody knows each other so you can track a politician down within about ½ hour and punch him in the face, whereas British and Dutch people are a bit further away and can't spell Keflavikurflugvollur.

In traditional financial terms, when a bank is bankrupt, it has for example three depositors Thorette Odinsdottir, Pieter Van De Fordtransit, and John Longdong. They all have 100,000 Krona in the bank but only have 30,000 Krona in assets. What is supposed to happen is that Thorette, Pieter and Joe get 10,000 each. What actually happened is that Thorette got 30,000 because she was in dog shit lobbing range of the Prime Minister's house, Pieter and John got the square root of bugger all.

This is what is known in the Banking community as “Theft”; and why the British government was so pissed off they used Anti-Terrorist legislation to seize Icelandic assets. It then got even worse diplomatically. Remember kids, they promised minimum protection to British and Dutch savers when fishing for business in the UK. But when John and Pieter were compensated by the British and Dutch governments the Icelandic government said no, we’re not paying up, after a Referendum was held. "OK" said the British and Dutch governments, we’ll charge less interest and get the money back over a longer period. That’s a good deal, vote again. They did and the answer was “Nei, Fyrirgefðu. farðu í rassgat” and went back to their Job pulling Cod out of the sea or being chief Curator of the Penis museum. Since nobody understood what that meant, it was just easier to take them to court. So now Iceland can’t borrow any money in the international institutions because their credit raiting is as Radioactive as a Japanese power plant, their boats are all mortgaged up to the hilt, nobody is buying £35.00 Rum and Cokes in Reykjavik. In short, the Icelandic turkeys have voted for Christmas.

Its not all bad though. They won’t be able to join the EU.


Umbongo said...

Other than sheer vote-buying, I still fail to understand why Brown/Darling bailed out UK private depositors in then-private Icelandic banks. It had been clear for at least two years before their collapse that these banks - and the Icelandic economy which both underpinned them and was underpinned by them - were unsafe: what other reason was there why such banks offered better rates than their competitors in the UK?

As your quoted article informs us, the money in the Icelandic banks didn't actually go to Mrs Svensdottir. Much of it went to some Icelandic "entrepreneur" who's still living (very well, apparently) in London. Why the Icelandic public should cough up to pay for this chicanery defeats me.

Furthermore, were I an Icelandic taxpayer I would ask on what grounds I'm expected to pay the difference between what the UK taxpayer (courtesy of Brown/Darling) paid out and what the UK government seized from the Icelandic banks' assets in the UK. AFAIAA there was no guarantee to the UK by Iceland in respect of the deficit. More to the point, why should Icelandic taxpayers (let alone UK taxpayers) subsidise the stupidity and cupidity of those in the UK who remained depositors of the Icelandic banks to the very end?

As to your point about Iceland and the EU: Greece, Portugal etc were welcomed into the eurozone despite failing to meet the conditions of entry or the continuing rules of membership thereafter. I think Iceland - with all its fish - will be welcomed to the EU (in the end) with open arms and open nets.

Gordon the Fence Post Tortoise said...

Yup... it's strange that little is said about the Chenguiz bruvvahs and expat Icelandics in London.

And even stranger that even less is said about the Icelandic banking sector's previously very cozy links with the Russian mafia.

Banks ... well, look at the coke trafficker's favorite bank, Wachovia...

More power to the Icelandic people! Stick it to 'em all you sonns and dottirs

Mr Ecks said...


They have done right to default and who gives a shit about their "credit rating"--if your broke don't borrow.

As for the EU--piss on them and anyone who supports them. I don't think Iceland will be joining those shite at all.

Weekend Yachtsman said...

"I think Iceland...will be welcomed to the EU (in the end)"

I sincerely hope the Icelanders have got more sense.

So far it looks hopeful, but who knows what skullduggery their political class - presumably as loathsome as ours - will try next?

H said...

Up to a point, perhaps. But both Britain and the Netherlands chose voluntarily to guarantee all the deposits in the Icelandic banks, i.e. well in excess of the statutory compensation amounts. Why should the Icelanders compensate Britain and Holland for doing something they didn't have to do?

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