Comments on: Our fearless leader speaks

By: alda

alda — Tue, 07 Oct 2008 09:56:27 +0000

Sigga – thank you! Yes, there are lots of unanswered questions and I guess everyone is just trying to muddle through. And no, I don’t know anything about DO’s father’s psychiatric situation.

Rachel – how very kind! However I’ll have to pass on the Marmite … perhaps you could send over some Scottish shortbread?

Flavian – I’d like to focus particularly on your last comment, which is very encouraging. I completely agree – and it is frequently said around here these days – this does not have to mean disaster, there are a lot of inherent opportunities, as well.

By: Flavian

Flavian — Tue, 07 Oct 2008 09:31:47 +0000

Well, I would not be surprised if the icelandic krona will continue to fall. According to the theory of purchasing power parity, the icelandic krona – at present rates – is still overvalued against the japanese yen though undervalued against the euro, the dollar, the pound and the scandinavian currencies.

I also think that it would be better for your prime minister to focus on the positive aspects of currency devaluation. It would for example be easy to abolish farm subsidies and farm protection since foreign foods are now very expensive in terms of icelandic kronur. Your exporters make good money which can be lent to mismanaged banks at high interest rates. The touristic sector will probably experience a giant boom and so on.

It is not necessarily a bad thing to get a realistic exchange rate. The problems collapsing banks cause for the rest of the society are exaggerated.

By: Rachael

Rachael — Tue, 07 Oct 2008 09:29:01 +0000

I see the Icelandic government has now taken control of Landsbanki, and are introducing new laws to avoid “national bankruptcy” – what a terrifying thought, a whole country going bankrupt! I do hope you all weather the storm. Boom and bust is the way of the world, although that doesn’t make it any easier when it happens. It’s amazing seeing Iceland in the headlines – I just wish it were better news!

I’m willing to send a food parcel over to Iceland from the UK to ensure you don’t have to eat pickled ram’s testicles or singed sheep heads. Marmite, anyone?

By: Sigga

Sigga — Tue, 07 Oct 2008 01:06:39 +0000

Alda you amaze me! Good reporting on a crap situation. What gets me though is why the central bank did not intervene a while ago and buy up kr oners on the international market. Also, why are Kaupþings assets better than others? Is the squid/octopus still alive? (I really want to be a conspiracy theorist now) will the karma thing really happen so quickly in that Glitnir is now in a better financial situation that all other banks.. … and being a dumb ass. If I was in financial crisis would I be telling the world that there would be a fire sale tomorrow? ( I mean what was with that last night saying hey all is well the banks will sell off their foreign assets and all will be well with the world – hardly the advertising to get you the best price in the current market). So far all I have seen is incompetence laden upon incompetence etc etc etc. (As an aside ma was telling me yesterday that DO´s dad had a bit of a psych prob… do you know anything about this?)

By: Chris

Chris — Mon, 06 Oct 2008 22:25:34 +0000

Alda: Let’s have a party?

By: alda

alda — Mon, 06 Oct 2008 22:21:03 +0000

Happy days!

By: kristjan

kristjan — Mon, 06 Oct 2008 22:08:22 +0000

EUR/ISK

2008-10-06 195.21 (reported-probably incorrect)
2008-10-03 156.13

and last year at:

007-10-08 85.77

However the 195 number may be incorrect, seems 172.28 is the number which would be more like 5.45%.

From Bloomberg:

“The Icelandic krona fell against the dollar and the euro on speculation the government’s plan wasn’t enough to keep a financial crisis from scuttling the island nation’s economy.

The krona, the worst-performing currency after the Zimbabwean dollar and Turkmenistan manat in the last 12 months, slid after the government said Iceland’s biggest banks may sell overseas assets and repatriate the proceeds in a bid to bolster the krona and alleviate the impact of the credit crunch.

Traders at RBC in Toronto among others recorded trades in the krona against the euro at prices above 190 today, indicating the Icelandic currency markets weren’t operating properly”

USD/ISK was about 13% today.

FX traders will drive the ISK down further, blood in the water now and no one to defend the krona.

By: Chris

Chris — Mon, 06 Oct 2008 22:06:59 +0000

Oops…this is indeed a small typo.

By: alda

alda — Mon, 06 Oct 2008 21:59:56 +0000

Chris – a goof source? Freudian slip?

By: virtuela

virtuela — Mon, 06 Oct 2008 21:58:01 +0000

thanks for the info! my boy/24 years (unemployed) son lives in ryk – i’m greatful for any description of the current situation!