One of my favourite Icelandic bloggers, Dr Gunni, can always be relied on for a glimmer of sanity, not to mention a chuckle. In his post from October 7 he’s got a pretty interesting take on the situation that’s was under discussion in the last post [I hope he forgives me for the somewhat inadequate translation of the following excerpts - his is the sort of text that loses a lot] …
Don’t get me wrong. I’m not comparing the Third Reich in Germany with the recent collapse of high-flying prosperity here in Iceland. Nobody got killed. But still. There are similarities. After the Nazis were overthrown no outsider could understand: How could society tolerate all those people being killed in the concentration camps? Why didn’t anybody say anything? Why didn’t anybody stop it? At what point did the nation give its blessing to the insanity? We scratched our heads about this all through high school.
In the future people will ask: How did it happen that all of a sudden it was OK in Iceland, a dwarf-nation of 300,000 people, and indeed just perfectly fine, for people to swipe piles of money to stick into wage deals, severance packages and you name it, and that some guy could earn in a month the same amount as it took a regular Joe standing next to him in line at the supermarket 20-30 years to earn? That a six-fold lotto prize was equal to the monthly wages of the rich? How did society tolerate such insane discrimination?
Incidentally, this Norwegian interview is brilliant. Why didn’t anyone here in Iceland ask questions like this? Oh, right, I remember. The owners of the banks also own the media. The research departments wrote the questions. And what 20-30 individuals sent everything here straight to hell like Vilhjálmur Bjarnason is claiming in this Norwegian report? Will we never know? Will there be no Nuremberg trial?
And then they’ll say to us like they said to the German nation: It’s your fault, you idiots. You participated in this with your foreign currency loans and all your other crap.
Incidentally, the voices are growing increasingly stronger here who want the government to freeze the assets of the 20-30 people who “sent everything straight to hell” and I’m adding my voice to that chorus. They’ve flown off on their private jets, no doubt to tend to their bank accounts in the Caymans, while we’re left to clean up their mess. The owners of the banks all have holdings elsewhere - why are those holdings not being used to offset the losses of their companies?
Expect postulations from YT later today about the “tool” we have in the Central Bank [as someone so succinctly put it in the comments to the last post] and his part in the latest: the British government’s decision to apply terrorist laws to Kaupthing bank, causing it, too, to fold. It just keeps getting better.
AND BECAUSE SOME OF YOU WERE MISSING THE WEATHER
You’ll be happy to know that it hasn’t gone bankrupt. We’re in between low-pressure areas at the moment, had a storm this morning and another on the way, but at present
{ 14 comments… read them below or add one }
I’m glad you put the weather back in.
Weather matters. It’ll be there when all this crisis is forgotten and the next boom (and bust and boom and bust) comes.
I feel sorry for people who somehow feel they will not be affected by the economic fluctuations sweeping the globe like a storm these days. And who feel they can blame others for profligacy because they themselves have been “sensible”.
We’ve all had years of good times, we’ve enjoyed and taken advantage of every little bit of good economic news. By and large we’ve all ridden the wave of rising real estate prices that seemed to be a beautiful unpoppable bubble. But a bubble, nevertheless.
I understand people now want to find others to blame. I doubt anyone is actually “to blame” for what’s happening.
When we go to an H&M and buy a shirt for Eur 15,95 and feel good about ourselves for being smart buyers do we wonder who’s being paid 5 cents (or whatever) somewhere else in the world so that the same shirt can be shipped to your city, packaged, promoted, rent paid on the store, etc and finally sold to you for that price? No. Are we somehow “to blame” if some worker is paid a measly wage to make that shirt? No.
Stockbrokers seem to be the scapegoats nowadays, but they used to be heroes in the days when our shares just seemed to rise and rise and rise on an endless and never-ending upward curve.
And, anyway, think of the really poor people of this world, who still make up most of its population (90%? 80?). With all this crisis, is their life any better or worse now then a year ago, then ten years ago?
I prefer to take things in perspective and not get excited about every new rumor.
Most people, Alda, I’m sure you’ll be happy to hear, have no schadenfreude whatsoever in the predicament that Iceland has found itself in. Most people are scared, and the depression is not too long ago not to remember the feelings of despair that were around back then. I’m from Belgium, a small country that used to have 3 big banks. One is now sold-off, another part-nationalised and another remains. This has caused real scares among the people here, with some withdrawing their savings, others ranting nastily on the internet and in the papers. It has to be said that no one was ever in danger of not being able to get access to his savings.
Until today. Kaupthing customers (it’s only a very small internet bank here luckily) cannot get to their money. The bank claims system failures etc, but the fact is that they are illiquid, maybe even insolvent. Now that REALLY scares people. In the news the failure of Kaupthing is linked to the near bankruptcy of Iceland (which it is). But I can understand that feelings towards Iceland are not too hot at the moment.
All the best.
And sack your PM
You must be exhausted Alda… The Aussie dollar has rapidly plunged to about 68 cents US, so its a good time to have a holiday here in Sydney
if you need to get away from it all ! The Spring weather is perfect too - clear skies and 24 degrees C. Best wishes, K.
Alda, I came to your blog by way of knitting and following links…. but I’ve kept you on my list because I have enjoyed your interesting commentaries on all kinds of things I know very little about. I’ve never been to Iceland, although it sounds wonderful, and I can understand your frustration with comments “pointing fingers.”
Just wanted to let you know how much I’ve learned from your blog. The other night I offered a comment in an economic conversation, and my husband was amazed to realize I had some knowledge about the situation in Iceland. You have enriched my world-view. Thanks!
Barbara M.
Hey Alda,
As always, excellent newsbits. Here’s my thought, if there are only 20-30 people who are directly responsible for this in your country, and your phone book is listed by first names, can’t you just call them up and guilt-trip them a bit? Not that this may be particularly practical, but it might make for some interesting entertainment. That is, of course, if any of them are still in the country, as you mentioned. I mean in a country of 300,000 your six degrees of separation are cut down to at least three, right? You could find out. If the media can’t ask the hard questions, you can!
I would really look forward to a post about that. “So I called the head of the bank…and…”
tee-hee.
but the weather is good too.
The heads of the banks have all been sacked. I know one of the directors a bit, used to go to university with my husband and also used to live 3 houses away from us. Probably won’t be calling him, though
there is no wind in the sails of the sailor who does not know where to go,where you going?
The latest news from here in the UK in this Saga is that not only are many individual savers affected but many local councils (assured by our government, apparently, that it was a safe home for their money) invested millions of pounds of their cash reserves in accounts from Icelandic banks. This money is now obviously in limbo and the councils have gone to the gov and said, in effect, you told us our money was safe, so give it back to us.
rb, looking for interesting entertainment I was driving around town today with my wife and nephew and it´s true what they say, you start noticing the little things. Every time I saw a brand spanking new Range Rover sneaking by I thought how they must be scared shitless that some person on a ghastly 5 year old hatchback would ram their beautiful status symbol. One of them was parked illegally right outside Kaupthing and the driver looked very uncomfortable. Only a matter of days before we start seeing deliberate scratches and severe dents on those classy SUV´s all about town. I will take just a tiny bit of pleasure in knowing that they thoroughly deserved it (schandenfreude anyone?).
Icelandic Terrorists!
Whatever next?
Seriously though, since their introduction the UK anti-terrorism laws have been used for just about everything you can think of and are somewhat despised by a lot of people here as being an infringement of civil liberties and abuse of government power. (And we don’t get votes on things like bailouts over here)
But that’s a whole different debate…. and is yet another reflection of how the general populace really don’t have that much say in the big decisions that affect us all so much.
oh.. and now Gordon Brown is yelling “legal actions” while the Icelandic government is doing it’s best to work things out with the British government. Plus, doesn’t he know how much this terrorist-law action on Landsbankinn did cost us? They killed Kaupþing, which leads to even more drama in UK. A new war with the UK is on the horizon. We need someone like Alda and The Icelandic Weather Report to handle all communications between Iceland and UK from now on.
Alda,
Thanks for providing a real view of what’s going on in Iceland. I’ve read a number of accounts from different media sources in the U.S. and U.K., and none of them describe the events with precision, as you are doing.
I am trying to remain calm about all this, as fear is what transforms these sorts of episodes into real catastrophes. I’ve been thinking a lot of my grandparents, who both lived through the Great Depression in the U.S. They were educated, hardworking, and fortunate enough to keep their jobs throughout the whole crisis. The Icelandic people have surely been through much more difficult times than these and will prevail as they have through famine, volcanic eruptions, earthquakes, wars, and yes–violent weather. My thoughts are with you. In the meantime, I am hoping desperately that the U.S. doesn’t elect the kind of head-in-the-sand, look-out-for-your-rich-buddies politician that we’ve suffered under for the past eight years. And look what effects that’s brought the world!
Thanks for the update, Alda. I have purposely been avoiding the news, as it’s too much to handle right now, so I’m not exactly familiar with the terrorist law and what’s happening between the UK and Iceland.
As scared as I am , I have confidence that in the end, things will be okay (I have to!). It’s easy to point fingers, but the facts seem to remain that in many of the countries where the financial fiascos are happening, there was a lack of regulation by the government and the people in charge of the banks had way too much freedom to engage in risky behavior, which has lead “the people” to pay and pick up the pieces.
From the very kind people I’ve met in Iceland, my impression is that people are extremely hard working and positive individuals who aren’t living well beyond their means (like many middle-class Americans that I know have been). I’ve been fascinated by and envious of the Icelandic culture and the positive attitudes and kindness of the people there.
Thanks again for your insightful updates on this matter, and I do hope you keep posting.
Nuremburg? Third Reich? Are you serious? The quoted piece begins “Don’t get me wrong. I’m not comparing the Third Reich in Germany with the recent collapse of high-flying prosperity here in Iceland. Nobody got killed. But still. There are similarities.”
Come on. This is absurd. Are you comparing them or are you not? Invoking the comparison?
This is irresponsible at best. I’ve been thinking lately, that as a 37 year old, I’m part of the last generation of people with strong secondary links the second world war (as opposed to direct links). We grew up with people who had escaped, but whose families were murdered living next door. Kids now I think are growing up with this as just “history”.
We have a responsibility to prevent this from becoming further trivialized and “abstracted” as we pass the world on to future generations.
This doesn’t help.