So yesterday the government nationalised Straumur Bank*, previously owned by Björgólfur Thor Björgólfsson (the son of the owner of West Ham). That means that all the big banks who were active abroad, are now nationalized. They fell because they couldn’t handle re-rolling debts of 33 million Euros.
It also means the government has increased it’s debts even more, to cover for all the people who had money invested there. It remains to be seen how much more, but with the debt ratio being at about 10 times GDP it really doesn’t matter all that much anymore.
In other news, they just released figures for trading in ISK** in February; 4 billion ISK compared to 550 billion ISK in Feb 07. The ISK is a dead fish and it even seems letting it float freely (which they did from March 1.) hasn’t had that much effect, since nobody’s buying or selling. The Central Bank does about 30% of the trading in ISK, compared with under 1% before the crash.
Also; the Central Bank rate is still 18%, inflation is still in double digits, unemployment is hitting 10% nationally (from below 1% a year ago) and I still can’t find a friggin job somewhere else.
Just some happy news from the jolly island in the north.
*an investment bank, not a regular bank like the previous three.
**Icelandic Krona, not Interstellar Kredits
And yup - everybody still uses the ISK, cause the gubment says everything will be ay ok in a little while. And it’s quite hard to get hold of foreign currency if you don’t export things yourself.
Not quite More like a resigned feeling of “whatever happens, happens”.
We are headed there too Worm. We are so big that it is moving like a glacier but our direction is clear. We poured billions into the banks to try and prime the economic pump, but the bankers are resisting the pressure to invest in the economy. We will have to nationalize to make the economy have a chance. The future looks grim.
So is Icelandair desperate for customers, or what? Their ads are still in the Toronto subway, and the more I think about it, the odder they seem: pushing Denmark as the destination and barely mentioning Iceland itself.
Well, Canada is only being mauled (ref: GM, Ford and Chrysler) instead of suffering collapse, so I suppose that’s ‘good’. Canadian bankers are notoriously conservative, and didn’t get into the whole derivatives thing much, so they haven’t needed a bailout at all.
Or if you look at it from the other direction, it’s a gateway to North America.
Oil prices will go up again. At least there’s a chance for the west to catch up with its infrastructure needs and maybe ease its housing crunch in time for the next boom.
Iceland: the bridge country.
Is it wrong that every time I see one of those ads, I think of you, instead of, say, some hot Icelandic babe?
Michael Lewis wrote an interesting article about the situation in Iceland in the new issue of Vanity Fair. Based on his description, I don’t expect things to get that bad in the US. He says, “In the end, Icelanders amassed debts amounting to 850 percent of their G.D.P. (The debt-drowned United States has reached just 350 percent.)”
Um… yike! Canada’s deficit-to-GDP ratio appears to be around 30% (PDF link from Receiver General of Canada), if I’m reading the linked article correctly.
That Vanity Fair article looks really interesting.
Sunspace, I think that the Vanity Fair article is talking about the accumulated debt of all Iceland businesses and banks, not just the government. The Receiver General’s report is just about the accumulated debt of the federal government of Canada.
And, while Canada as a whole is suffering from the economic downturn, it’s nothing like what’s happening in the US. Our banks are traditionally very conservative, in part because the federal government has a very conservative approach to regulating them. We haven’t had a bank failure in Canada since the late 70s, when two banks went under, the first since the Great Depression forty-five years earlier. By contrast, I think the news last night was around 14 banks have gone under in the US this year alone, and more may follow.
My mom was born in Saskatchewan, and told me stories of walking to school though such temperatures on the wooden sidewalks of Regina. Saskatchewan is flat, beautiful, with an inland mid-continental steppe climate. Think ‘hot in summer, cold in winter’. But mom always spoke of the incredible skies there, and it’s true. It’s so spacious.
Also, it apparently doesn’t do Daylight Saving Time.
More like a resigned feeling of “whatever happens, happens”.
Well, Denmark (Kastrup) is a gateway to the rest of Europe. Reykjavik is only a gateway to Denmark 
I’ll give you a 
