Comments on: Wrapping up a week of insanity

By: Vote 2008 - The Takeaway - As the Russians come riding on their white steed

Vote 2008 - The Takeaway - As the Russians come riding on their white steed — Thu, 09 Oct 2008 20:59:48 +0000

[...] Originally posted on October 7, 2008 on Alda Sigmundsdottir’sThe Iceland Weather Report. [...]

By: PhilippeP

PhilippeP — Mon, 06 Oct 2008 12:09:05 +0000

alda > Belgium

By: Dietmar

Dietmar — Sat, 04 Oct 2008 22:44:56 +0000

I too was mystified why the UD dollar is surging against other currencies. I found a comment by a “Rajiv” over at the itulip.com forum site that may explain the cause:
—————————————————————————–
1. What is the credit crunch about? A. Loss of liquidity
2. What is liquidity? A. Possession of cash/currency
3. What is world reserve currency? A. US $
4. Why is there a credit crunch? A. Debt Deflation going on

Q. So in a Debt deflation, loss of liquidity scenario, what is in short supply?
A. Cash/currency

Q. What happens to the price of something when it is in short supply?
A. it goes up!

The US$ going up is just the symptom of the grave credit crunch we are undergoing!
————————–
Also, here is a pretty good analogy of the financial mess in the United States:
http://www.eurotrib.com/?op=displaystory;sid=2008/9/25/102414/031
—————————-
Hard to say if the situation is as pessimistic as economist Nouriel Roubini writes in his blog:
http://www.rgemonitor.com/blog/roubini/253853/financial_and_corporate_system_is_in_cardiac_arrest_the_risk_of_the_mother_of_all_bank_runs

By: Rozanne

Rozanne — Sat, 04 Oct 2008 16:59:56 +0000

Oh, dear. I really have very little understanding of what it all means (I dropped out of Economics 101 in college), which is just so irresponsible of me.

I think you’re right, though, not to buy into all the fearmongering. There’s nothing I hate more than speculation based on incomplete information. I have a hard time believing that there will actually be food shortages.

I think your plan to live in (and enjoy as much as possible) the present is the right thing to do. In fact, that’s probably what we should *always* do. (Can you tell I went to a Buddhist lecture last night?)

By: Bryce

Bryce — Sat, 04 Oct 2008 09:40:32 +0000

It is strange times indeed. When I first arrived in Iceland in January one pound was 128 ISK – now it is nearly 200 !! My guess is we will start to see a BIG rise in the price of tings in the shops soon due to the amount of imports – I notice petrol is up to 173 / 177 already (cheaper than UK now LOL ! .
Maybe Kristjan can comment but the construction industry must be in trouble – imported steel, imported cement (?), imported wood, no credit from the banks for mortgages.
On the positive side the export industries are doing well I hear – fish, aluminium.
Anyway I can’t worry about it – nothing us peasants can do but suck it up and pay.
Anyway it is a BEAUTIFUL day – where are my boots and camera ??? …

By: Bird watcher

Bird watcher — Sat, 04 Oct 2008 08:00:48 +0000

I sat watching our news 24 channel last night to see if sanity returned and the House of Representatives passed “that” bill, which o fcourse they did. We live in troubled but challenging times. For what it is worth if I were Icelandic I would want to be in the European Union. I am trusting that what this current crisis will have taught us Brits is that we need to ditch the close relationship with the US and embrace Europe.

By: kristjan

kristjan — Sat, 04 Oct 2008 01:27:42 +0000

“Contracts on Iceland’s debt jumped to 17.5 percent upfront and 5 percent a year to protect 10 million euros ($13.8 million) of bonds.”

This puts Icelandic debt in the “distressed” category.

Kaupthing – price of its CDS has now gone above 2500bp, which indicates imminent default.

Krona continues to fall against Euro and USD.

Rapidly this is becoming not a run on the banks but a run on Iceland itself.

By: JoeInVegas

JoeInVegas — Fri, 03 Oct 2008 20:25:01 +0000

It’s all magic to me. I have no idea who puts up these prices and exchange rates and who decides what they are. And we all suffer for it.
Ah well, but snow and ice? It’s 29c here now, expecting a low of 20c tonight. But it’s dry.

By: CarolQ

CarolQ — Fri, 03 Oct 2008 20:03:43 +0000

What I can’t understand is why (with the 700 billion bailout on the docket in US Congress) the US dollar is rising against the Euro. What’s up with that? Good for the US but . . . ?

By: Keera

Keera — Fri, 03 Oct 2008 18:08:06 +0000

Glitnir got positive press today in Norway, because it offers the highest interest rate on savings of any bank in Norway. I thought that was a bit ironic.

Bergen weather report: We’ve scraped frost off our car windows this week, too, but we call it autumn. Winter’s a lot colder and has far fewer leaves still on the trees and bushes.