A number of people have asked me for my reactions to the Vanity Fair article that everyone’s been talking about … so last night I decided to take the plunge and read it.
As some readers will already know I had initially given up after the first page or so, as soon as I was confronted with the smug patronizing ["the Reykjavík phone book lists everyone by his first name, as there are only about nine surnames in Iceland"] that characterizes so many of the articles written by foreigners about Iceland these days. It has become so incredibly tiresome, just like the sweeping inaccuracies and cliches that themselves have become a cliche: the elves that we all supposedly believe in, the Central Bank director [Doddsson] being a “poet”, the allegation that everyone knows everyone else, and finally that everyone in Iceland was totally in the game, cheering on the bankers and drinking Champagne for breakfast ["everybody was speculating"]. Yes, and more.
Basically, that Vanity Fair article is a story written for an audience, to entertain. Yes, it had a lot of good points – and those points were driven home with shock-factor amplification. And perhaps that’s fine, perhaps it’s legit – as long as the points are accurate. It’s where fiction starts to intertwine with fact that the whole story loses its credibility – like on the second page where the author claims he hears Range Rovers being blown up in the street for insurance money [Boom!] – not once, but twice. I mean, come on. Do people actually buy that shit? Sure, there are reports of Range Rovers being torched, but in the middle of town in the middle of the day? Give me a break.
So, yes – there was lots of good stuff, about the economics, about how everyone saw what was happening except the people who NEEDED to see what was happening. There was shocking stuff about suppression and incompetence – nothing we haven’t heard before, it’s why we banged pots and pans for days on end in January. Perhaps the most illuminating – to me – was the description of what the bankers were up to in the boardrooms and abroad – buying up other banks without having a clue as to what they were doing, their absolute boorishness when it came to interpersonal relations [incidentally, I find Lewis's description of the typical Icelandic male sadly accurate, as I've previously mused upon in this space - although I hasten to add that Icelandic men do have their redeeming qualities; more on that later, perhaps] and the insanity that prevailed within the banks and investment firms, where capital was borrowed, only to be re-lent to the borrowers and their cronies. These, for example, are things that I – and I daresay most normal people in this country – were completely oblivious to. I didn’t give a rat’s ass what the banks were up to during their alleged boom [not the Range Rover variety]. Sure, I knew they were growing, but I knew so little about the intricacies of banking and economics that it went completely over my head – hence I take exception to the suggestion that I was “speculating”. And of course the media completely failed in its duty to analyze and inform – but that’s another story.
So, bottom line: very well written article, numerous insights, some illumination, too bad about the fiction.
BRIEFLY, IN OTHER NEWS
Baugur Group has gone bust, and despite my slightly spiteful comment in this post, I really do think it is quite sad. Lots of people’s jobs at stake, and such. [Not to mention discount shopping at Bónus.] Still, is it surprising? They financed their massive expansion with borrowed capital. Easy come, easy go, as they say.
MILD, RAINY WEATHER
Showers today but mild, enough to make you feel like spring is just around the corner. Currently 2°C [36F]. The sun came up at 8 am and set at 7.17 pm.
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{ 43 comments }
I read the piece, and I wasn’t impressed—not one of Michael Lewis’s better efforts, in my opinion. I found it bizarre that he wrote as if everyone in Iceland had been in on the “action”, when his own books (Liar’s Poker, The Money Culture, etc.) depict the world of financial prestidigitation as freakishly disconnected from ordinary life or even ordinary banking. It stands to reason that most Icelanders had no more awareness of what was going on in their financial institutions than most Americans had of what was going on in theirs.
You must understand the true significance of the article. Iceland’s economy is not the topic. No, the salient point is that Michael Lewis, The World’s Greatest Writer, came to Reykjavik. Representing Vanity Fair, The World’s Greatest Magazine.
You skyrr-slurping rubes should be delighted that such Great Institutions deemed to study your little isle. Many finer places have not been chronicled by The World’s Greatest Writer for The World’s Greatest Magazine.
Chalk this up to one more parachute journalist divining all there is to know in a two-week visit. Coming next month: Darfur on five platitudes a day.
Another article about the Icelandic situation, more rational than most, and without most of the histrionics, and only a modicum of the usual stereotypes, appears in the March 9, 2009 issue of _The New Yorker_, another Cond’e Nast publication, but aimed to a more intellectual audience than VF. An abstract can be reached at http://www.newyorker.com/reporting/2009/03/09/090309fa_fact_parker
Through contact with the website you may be able to arrange a courtesy link to the article for your blog being a main English language information source for Iceland [I read the article on paper, so I don't know the web-link procedure]. Be warned that the article is not so harsh as is popular toward the Icelandic entrepreneurs, who all seem to want to paint villains. And warned that it also notes that Oddsson and Mathiesson were incompetent, which they were, but appears to be being swept aside in official descriptions of events.
I knew that the exploding Range Rovers had to be BS. I think I read it to about there and stopped shortly afterwards. A bit too overdramatized. (Have you seen the Slate article – How do you find an elf? – http://www.slate.com/id/2213353/ ) I’m getting sick of the elf-stuff, honestly.
Ah, the Champagne breakfasts in 2007. As they say, if you remember 2007, you weren’t really there…
Perhaps the author got the “shit” parts of this article from Svanhildur Valsdóttir. (Oprah 2005) She seemed to have had her hand on the pulse of the nation.
On the subject of Bauger – the innevitability of it’s liquidation seemed to apparent to everyone but themselves. Obviously, there is a big fallout on the already ravaged UK High St, but as recently as 6 weeks ago, their low-rent food retailer “Iceland” was saying it was going to buy 50 of the ex-Woolworth stores following that company’s collapse.
I asked elsewhere at the time if the cash was coming from the other planet they seemed to inhabit.
Iceland(the supermarket)’s sales are up 14% on last year, so it’s a successful business. Who owns it probably affects its ability to raise capital, but that doesn’t mean it can’t self-fund or borrow to buy those stores.
After all, they’re going to be dirt cheap now and Iceland felt it was in a position to buy all of the stores a few months ago.
Yikes, after reading this VF article, I hope you can soon post about how “Icelandic men do have their redeeming qualities.” Some pretty serious gender-bashing in this article — maybe not surprising, given VF’s mostly female readership, but seems a little over the top. On a (slightly) more serious note, some of the statistics are quite frightening, as are some of the dire warnings presented in academic and international financial circles that appear to have been ignored or discounted by those who’s job it was to listen and act
Ralph – I haven’t read those books (I’d never heard of ML until he wrote that article) and am surprised that he depicted that disconnection there – and not here. Just reinforces my point about the sensationalism.
Paul – LOL
GB – thanks for the tip. I actually met briefly with the reporter when he was here so I’d be interested to know his take on things, definitely. I’ll see if they’re willing to let me in.
Cassie – you and me both. Years ago, in fact. Bleh.
James –
Roy – I presume you haven’t read this, then.
Trev – heheh. Indeed, I had a brief experience with landing on that Other Planet back in 2007 and believe me, I was glad to get back alive.
Steve – good to know. I don’t know who the main creditors are, but if it’s the Nicelandic banks, it’s good news for us, the new owners.
I don’t think Baugur has anything to do with Bónus or Hagkaup any more, that’s under the hat of Hagar now, so Bónus probably won’t belly-flop, at least not for now.
Peter – I’ll try to post something about that soon.
As for your serious note – yes, that’s why we wanted them out of office. There was widespread denial/incompetence – it’s the big wake-up call that we, the regular citizens, got.
hildigunnur – there was some talk on Kastljós last night that the agreement to separate Hagar from the rest might be revoked (rift). From what I understood, there’s a fair bit of uncertainty.
I imagine most Icelanders had no idea what was going on. Sure, life was good and people bought stuff. But that was the same all over Europe. Look at Britain: everyone boasting about how their house had doubled in price in a year; so house prices soared. Millions of Britons will be soon suffering severe negative equity.
And when the bubble burst governments blamed everyone else except themselves. Britain initial reaction to Iceland’s plight was shameful.
People just love repeating the tired old stereotypes and clichés: the English are cold, the French don’t buy soap, the Germans are all Nazis, the Japanese are inscrutable, Icelanders believe in elves (phew, thought it was just me) etc etc. All racist nonsense but dangerous nonetheless.
Gordon Brown has been in control of Britain’s finances for over a decade. He’s smart: he knew what was going on and that money was being borrowed with borrowed money and the economy was being artificially inflated. He’s as bad as Madoff.
Enough! I could rant on all night. Let’s talk about the weather…..
Icelanders need a little bit of patronising as many live in complete denial; witness most of the Independence Party. As for Baugur, it was run by an inept criminal with access to all the banks. Bonus is a modern day fairy tale, unlike the original. Hagar buy left over stock and sell it at inflated prices. Any Icelander who believes they offer value is just deluded.
>People just love repeating the tired old stereotypes and clichés: the English are cold, the French don’t buy soap, the Germans are all Nazis, the Japanese are inscrutable, Icelanders believe in elves (phew, thought it was just me) etc etc. All racist nonsense but dangerous nonetheless.
How is it a tired stereotype/cliche, or even racist, if it’s true? 1, 2, 3, 4 (arguable) are all incorrect. 5 is not, in that they believe enough for it to affect planning permission (and not just with gullible foreign aluminium execs, we’re talking residential garages as well).
Wiki refers to four surveys, of which two give usable figures. In 1975, 55% thought that they were either certain, probable or possible (mainly the latter). In 1995, 54% believed in elves to some extent.
Steve – and to you, Wiki is a credible authority?
Is it not to you Alda? If it refers to a study then I tend to assume that they’re not misreporting it. I’ll often check their cites although, to be fair, in this case I didn’t as one was obviously in Icelandic.
Well the wikipedia article on elves refers to this page:
http://www.icelandreview.com/icelandreview/daily_news/?cat_id=40764&ew_0_a_id=290137
That page cites the study. Wikipedia isn’t always unreliable, you have to have a good bullshit detector and use common sense when reading it, as with anything. Just because something is in print doesn’t make it a great source either :O.
Can anyone enlighten me to what happened a few years ago in Iceland.
I knew someone that sold used cars. He used to buy them at auction and was so proud that he was selling as many as he could to Iceland. Every car he bought was resold immediately to Iceland. Price wasn’t an issue. The cars were $40,000 and up.
I couldn’t understand what was causing that strong demand and he said he thought they were being re sold to Russia.
Did anyone wonder how they could afford so many expensive cars?
Did it have to do with the exchange rate?
Thanks for the insight.
ML is pretty smart about financial matters (to wit, his books, Liar’s Poker, Money Culture; really good article in NY Times — written with Einhorn — “The End of the Financial World as We Know It” http://www.nytimes.com/2009/01/04/opinion/04lewiseinhorn.html?ref=opinion. Stereotypes and cultural misreporting about Icelanders and Iceland aside, I thought the article was fascinating as a look at risk taking behavior and at one piece, sort of a microcosm, of the global financial bubble. Did anyone follow the link (in VF article) to a Q&A in which Lewis talks about “feminizing” banking? The label might be for Vanity Fair audience, but I doubt the underlying point is.
Thank you for commenting on this article. Some aspects struck me as true, others I wondered about. So nice to know from someone who would have some first hand information.
I’d be interested how the people of Iceland will emerge from such a transition. Whether such things as Kárahnjúkur most enticing in putting the economy back together, or perhaps this the chance for some new way?
oh, ok, didn’t see the Kastljós in question. Hmm.
Such a tragedy for Iceland.
Easy to make fun of you on hindsight, but who is this Vanity Fair guy to do it? I bet he did not see it coming more than the rest of it when it happened.
Beware of importing too many Norwegian troubleshooters. There are certainly issues here as well.
Coming from a multi-million town and having lived for over 3 years in Reykjavik I must admit that I do believe that ‘Everyone knows everyone’ apply to Reykjavik.
However I’m very dubious about the bombing Range Rover. I seriously doubt that this even happened. The whole hearing it from his hotel is, of course, fictional.
Mal – having lived in Reykjavík for 15 years, I can emphatically state that I do not know everyone in Reykjavík.
Steve, namme – actually I had not heard of that study and obviously cannot refute the information presented there. However, I do feel that the issue is rather more complex than the foreign perception of Icelanders revering little elves of the garden-gnome variety, and in fact it’s too lengthy to get into in a small comment box and requires its own post. I’ll see if I can write something about it soonish.
Seems to be some potshots about potshots like the claim, made by an Icelander to the author, about the booms from a Land Rover being blown up (at night). One of my favorite parts, and dead on accurate from years of experience trying to collaborate with Icelanders, was the dilettantism of the fisherman becoming a banker. I found that phenomenon very widespread and in many other sectors.
Stan – that’s one of the parts that I unfortunately question due to the exaggerated nature of the rest of the article. I find it very improbable that a fisherman could just walk into a bank without any training and become an adviser – just as I would find it very hard to believe that Range Rovers were being blown up in the middle of town in bright daylight, if I knew it weren’t true. The whole article loses credibility due to the fictional aspects.
“I find it very improbable that a fisherman could just walk into a bank without any training and become an adviser …”
Here’s a thought: call him up and ask!
Bjarni Brynjolfsson -ocupation: former fisherman/investment banker
(They’re listed by first names, you know)
Er … Leonardo, where did you find that occupation?
Bjarni Brynjólfsson is the editor of Iceland Review. He’s listed in the article as a fishing guide. Which incidentally strengthens my point even further — his day job as editor of IR is conveniently omitted in favour of something that fits in with the narrative and makes it seem more dramatic.
That made me smile as well Alda. I’s say it supports ML’s point about names, but there are 3 people with my name at my wife’s company, so perhaps not
.
Just skip-read the article again and, whilst I can’t see this Bjarni mentioned in the text, there is a photo of him on page 3:
“Bjarni Brynjolfsson: A fishing guide, who is back to hosting fly-fishermen instead of bankers.”
The fisherman’s name was Stefan Alfsson.
Arrgh, looks like I skip-read your post as well – you’d spotted the pic.
Shocking that it’s the same Bjarni – that is pretty crappy journalism.
Alda wrote:
> Basically, that Vanity Fair article is a story written for an audience, to
> entertain.
*Exactly and perfectly correct*.
Vanity Fair does *only* publishes stories which entertain. This is because as a magazine publishing business it seeks to make a profit; it seeks to sell *what people want to buy*. A magazine is not a book. People when they buy a magazine are looking for entertainment.
Out in the real world, the real world happens. It is not necessarily entertaining. Any story about the real world *will be transformed such that it possesses the property of entertaintment* – or it will not be published and you will never see it.
The real world is, however, the real world. It does not care if it is entertaining, horrific, boring, asinine, etc. It simply *is*. Transforming the story of what actually happened into a story which is entertaining is a subtle and profound manipulation of reality.
There are many subjects in reality which are not entertaining and SHOULD NOT be entertaining. To manipulate them so is actually *dangerous*. These magazines, the newspapers, television – they all behave in this way. When the primary means by which a culture communicates with itself *all* modify reality, we *as a culture* become unable to properly know reality. It is hidden from us. We are constantly entertained – like a dribbling idiot is entertained by a disco ball. It is not healthy – it is dangerous – for us to be informed about politics, about war, about crime, through the manipulation of entertainment.
Touche mini-ciné! I was also dissed because I was supposed to take the word of an Icelander that had just come back to her country to report that she had been edited to high heaven and that the primary
reason she was there was to expound on the progress of women in Iceland.
Does anyone in their right mind think that trash TV like The Oprah Winfrey show invites a guest from a tiny Scandinavian country to
speak on maternity benefits, women’s participation in the labour market, the standard of education of Icelandic women, the Icelandic welfare system, “how we try to nurture the individual here”…….. ad nauseum?
If they had wanted to do that they would have invited someone from one of the larger Scandinavian countries that Oprah´s audience may have heard of.
You have to mention the promiscuity, chowing down on sheep penises, testicles, rotten shark etc. to keep audiences like hers interested and paying the bills.
I believe the Oprah version of what happened because no one from Oprah´s production company was present for rebuttal when Svanhildur ranted on Kastljós that she didn´t stand a chance against a big production company like Harpo. It´s a no brainer to return to your home country and bitch about how badly you were treated abroad when you have no witnesses. It was just a case of believing her or my lying eyes.
“I find it very improbable that a fisherman could just walk into a bank without any training and become an adviser”
A fair comment, but not in itself proof that Lewis’ story isn’t true. A large portion of the “work” done in rating US equity stocks for market valuation is done by young men and women in their 20s. They typically know models but don’t have industry experience. It doesn’t take too many years before people from this cadre of MBA holders start to get positions in which they trade enormous amounts of money… and aside from a background in financial modeling, I don’t know that they’d be any worse at it than the captain of a fishing vessel.
I shall be interested to see if anyone is able to verify the story and the identity of the man cited by Lewis.
Alda,
On a lighter note, there’s a short piece in the San Francisco Chronicle entitled “Rise and fall of Iceland’s pizza trailblazer” (http://tinyurl.com/crpukw), about Olafur Jonsson, who introduced New York-style pizza into Iceland.
– tk
So glad that someone finally mentioned the Bjarni Brynjolfs thing. I remember him back in the days when I still lived in the “old country” and I do believe he was working for Mannlíf then. The photo caption says he is a fly fish guide, yet he is dressed as a fisherman on a boat. Fly fish guide is an upper glass thing, fisherman is very working class hero. I say this tongue in cheek to match the hype of the article, but this is nevertheless true.
Re. The Icelandic stereotype: Yes Icelanders believe in elves. Not garden gnomes but more like ethereal being that live in a world that intersects somehow with ours. I personally don’t, but hey – a lot of people in this world believe that an old fart with a white beard created the UNIVERSE! And that a guy named Jesus was born to a virgin. Not only that, but just 5 years ago 50% of the US still believed their president was good enough to re-elect. So you know, I don’t see what the problem is with Icelanders and Elves.
First, the Range Rover “fiction”. Lewis did not say that Rovers were blown up in broad daylight. He did not even know what the sound, two consecutive booms, was. He was in bed, it was night and he heard two booms. That is what he wrote. He further wrote than it was an Icelander who told him about Range Rovers being blown up! That is also what he wrote and it could be accurate that an Icelander actually told him that. There is also good reason why one car on fire could make several booms from fuel in different containers (engine, tank, etc.) exploding in sequence.
Now as for the fishing captain. Why is it any more improbable that a fishing captain would be able to work as an investment adviser in a bank than that a grocer or someone who had earned millions from dealing in the Russian booze business could own and control a whole banks? Or that a veterinarian…. it could go on and on.
Also, Lewis is known as a financial journalist primarily for his books and his writing for the New York Times.
We might not like the message, so let’s attack the messenger? Inaccurately…
There was a lot in there that could have been discussed and, I fear, will need to be discussed.
Reputable studies report that 185,000 Icelanders believe in elves and 15 million Americans believe they have been abducted by aliens. This is not a coincidence: I firmly believe that each elf has abducted over 80 Americans.
Stan, how about a second-string actor becoming president of the U.S.?
James, how about millions of people believing in the infallibility of a guy in a pointy hat and red shoes in Italy?
Alda wrote:
> And of course the media completely failed in its duty to analyze and
> inform
They have no such duty. They are simply publications which people have decided to produce and others to buy. To imagine there is such a duty and that it should or is being carried out well is to blind oneself, by imagining a safeguard which does not exist.
bollocks the lot of it
“Stan, how about a second-string actor becoming president of the U.S.?”
I assume Jon is referring to Ronald Reagan. While I dislike his conservative politics, he did not jump directly from actor to president. He was elected governor of California and re-elected before running and elected president for 2 terms. Hardly dilettantism. He had a track record in politics and administration and that is why people voted for him.
“Denial is not a river in Egypt.”
I am absolutely aghast at some of the comments I have received on this post. I’ll say no more.
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