Tiny Iceland Created a Vast Bubble, Leaving Wreckage Everywhere When It Popped

[Neal Stevens]

http://online.wsj.com/article/SB123032660060735767.html

Mr. Haarde addressed his countrymen. He warned that the banks' grave troubles threatened the whole island. "The Icelandic economy, in the worst case, could be sucked with the banks into the whirlpool," he announced on television.
The solution: Iceland would seize the banks. That evening, Parliament passed a new law enabling this to happen.

The next morning, Tuesday, Oct. 7, Landsbanki was nationalized. Iceland's depositors would be protected from losses, the government said.
In the U.K., banking authorities didn't like the sound of that. British depositors had billions of pounds in Icesave -- and no one was saying anything about protecting them.

In a heated phone call, British Treasury chief Alistair Darling asked Iceland's finance minister if British depositors were getting left out in the cold. "Do I understand that you guarantee the deposits of Icelandic depositors?" Mr. Darling asked, according to a transcript published in the Icelandic press.

"Yes," replied Arní Mathiesen.

"But not the branches outside Iceland?" Mr. Darling asked.

"No," Mr. Mathiesen said, not beyond the €20,000 minimum prescribed by European regulations. Later in the call, Mr. Mathiesen said Iceland probably didn't even have enough money to meet the €20,000 minimum.

Wow, so maybe Britian should sieze Iceland as collateral?

.

[Neal Stevens]

Another POV from a board member of Iceland's central bank and professor of political philosophy at the University of Iceland.

http://online.wsj.com/article/SB1226...&mod=sphere_wd

One or two of the Icelandic banks might have survived, though, if on Oct. 8 British Prime Minister Gordon Brown had not used the country's antiterrorist law to take over the assets and operations of two Icelandic banks in the U.K., Kaupthing and Landsbanki. The Icelandic Ministry of Finance and Central Bank even found themselves briefly on the list of terrorist organizations published on the Web site of the British Treasury, alongside al Qaeda and the Taliban.

Prime Minister Brown also talked darkly of last-minute bank transfers from England to Iceland. Whether that is true or false remains to be seen. But interestingly, the last-minute transfer of $8 billion from Lehman Brothers in England to America in September did not land the U.S. Treasury or the Federal Reserve on the British list of terrorist organizations.

:hmm:

[Stealth Hunter]

Signs of the times...

And it's gonna get worse before it gets better.

Just read an article that said Iceland was asking the EU for an additional four BILLION Euros in economic boosters.