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Could we kindly have our recession with a side order of justice?

One of the many and ongoing f*ckups by the Icelandic government in the wake of the economic implosion is the fact that, as yet, no investigation has been launched into the actual reasons behind the collapse of the banks – or whether any dubious transactions were made right around that time.

The seriousness of this is obvious: the more time passes, the more likely it is that evidence will be tampered with or made to disappear.

Meanwhile, the resolution committees that were appointed when the banks were taken over – the committees responsible for settling accounts, selling assets and so on – have been working behind closed doors and have provided no information to the public about the progression of the work which, note bene, is being conducted inside companies that now officially belong to us, this country’s taxpayers.

No doubt they’re busy wading through a muck of lies, deceit, immorality and criminal misconduct. A couple of days ago, for instance, it came to light that the banks had lent money to holding companies to buy shares in those same banks, with no required collateral except in the shares themselves – all in order to drive up share prices. Normal people who then bought the shares at those unreal prices were obviously caught in a web of deceit and many lost their entire life’s savings, including pensioners who now have no way to earn it back. It’s tragic beyond belief.

Then today it surfaced that the owners of the three commercial banks used funds in their banks’ money market accounts to purchase shares in their own companies just prior to the banks’ collapse, and sold shares in other, more solid, companies – all in an attempt to secure some liquid funds. Those money market funds include Glitnir’s infamous Fund 9, in which YT had some cash – especially infamous because Glitnir employees actually phoned the bank’s customers to encourage them to deposit money into the fund by telling them it was a bulletproof investment, the only risk was in the devaluation of the accrued interest. The reason it was to have been so safe is because the fund’s portfolio was supposedly in large part made up of government bonds – which, when the collapse came, turned out to be nonexistent.

In the end, I managed to get out with a seven percent devaluation – I sold my shares the day before the fund was frozen – whereas others received only around 85 percent of their money. However, the bulk of my savings was in a separate fund with Glitnir, which has been frozen since the beginning of October. Yesterday I called the bank to inquire if that fund was actually still frozen [because there has been no discussion, no notification, about the status and I found it unbelievable that they could hold it for so long without any news] and got put through to a girl in Customer Service that sounded about 17. She seemed exceedingly bored, like she was desperate to get back to checking her friends’ status on Facebook:

YT: Is Fund 1 still frozen?
YT: So, what’s happening with that?
BC: They’re working on it. They’re working really hard. They’re working to minimize the loss for the client.*
YT: So when do they expect to be finished?
BC: Oh, we don’t know. It’s hard to say.
YT: So it could be a week or a month or a year.
BC: Yeah.
YT: And where is the bottleneck, exactly … is the problem within the bank, or with the government, or …
BC: They’re working on it within the bank.They’re working really hard.**
YT: So there’s no way of knowing when the funds will be released?
BC: No. We just get, like, a newsletter every Monday about what’s been happening and yesterday it just said they’re working on it. Really hard.

I had to restrain myself from screaming into the blower at her, but only because I feel sorry for bank employees right now, although with this chick’s disinterested attitude my sympathy was waning fast.

Or maybe it was just because a bored chick on the other end of a customer service line is so incredibly insignificant when put up against the criminals who have so massively screwed over the people of this nation that most of us can’t even get our heads around it right now.

Or because my prevailing feeling these days is one of utter helplessness and powerlessness when faced with the total, extreme incompetence of our leaders in so many hugely significant matters. Like the one that relates to apprehending the criminals that were making those sorts of decisions in the banks and bringing them to justice. Because that’s what we need to see more of around here. Some justice.

It was a dry, windy day, and as temps plummeted the windchill became particularly nasty. Right now -3°C [27F]. The sun came up at 10.32 this morning, and went down at 3.57 pm. Short days, these days.

* Canned response
** Icelandic: á fullu



Comments on this entry are closed.

  • skugga November 26, 2008, 8:07 pm

    I just sneak along to leave a link to an article in the german newspaper Frankfurter Rundschau:


  • Roy November 26, 2008, 8:22 pm

    The criminals that raped the country can expect the same justice meted out to those who have raped the women of this country i.e. , little to none!

  • Jessie November 26, 2008, 8:53 pm

    Governments don’t seem to understand that the more they mislead the public by way of nondisclosure and inaction, the less the public trusts them, and the more they’ll want them out of office. It seems pretty logical to me. I certainly don’t condone violence, but do they not see how this is going to escalate if they don’t start cooperating with the public’s (reasonable) demands? Even Martin Luther King, Jr. said, “Those who make peaceful revolution impossible make violent revolution inevitable.”

  • Marc November 26, 2008, 9:47 pm

    Just so you know: Iceland is not the only country where people/companies get away with that. In Belgium a bank (Dexia) got into trouble. So they raised capital, partly from their longstanding shareholders, partly from government. As it turns out the longstanding shareholders got a loan from dexia to participate in this operation. The collateral being, you guessed it, the shares. Because Dexia is a bank that is very much in bed with the governments, those same governments thought it a good idea to show the general public what they thought shares should be worth. So in this operation, the participants bought new shares at a significant UPmark (!!) to the then shareprice. Subsequently the shares fell. And fell. And then some more. So the collateral (i.e. the shares) did not cover the loan anymore, not by a long way. Normally you would require your lender to post extra collateral. Instead the government guaranteed the loans.
    So how are these shareholders going to pay back the loan? They expected to do this using the dividends (their main income). Except that at this shareprice, paying a dividend would be insane… To be continued.

  • James November 27, 2008, 1:12 am

    Track down that bank employee and administer hyoscine-pentothal until she reveals the combination of the safe holding your kroner!

  • Polar Bear November 27, 2008, 1:59 am

    “the total, extreme incompetence of our leaders in so many hugely significant matters”

    Are these the same leaders freely elected by the Icelandic people and lauded for the Nordic Tiger successes of the Icelandic economy over the past “golden decade”?

    “Because that’s what we need to see more of around here. Some justice.”

    That is what you are currently receiving, economic justice for the misdeeds of your bankers, regulators and government.

    You haven’t seen anything yet, the travails are just beginning.

  • Eric November 27, 2008, 2:09 am

    @Polar Bear, yes, I’ve been a bit hard on the poor Icelanders myself. But some sympathy is in order. Iceland is small enough that the ordinary folks got really, really screwed. I’m fascinated by the whole scenario – a kind of madness of crowds and will to believe. I hope it gets better soon!

  • Jessica November 27, 2008, 8:30 am

    OK there seems to be 2 things I’m wondering about after reading this post (great investigative reporting style BTW!):
    1) It’s apparent that the Icelandic government sucks eggs right now and that it’s seemingly run by cronies who’ve been in Parliament for years or decades. Does Iceland have any hopeful politicians you’d like to see take Haarde’s (et. al..) place? Like an “Icelandic Obama” of sorts?
    2) Customer service is a cancer that plagues this country. (I know this from unfortunate personal experience and from the several accounts I’ve read here or on Iceland Review) Do you think that perhaps the bright spot of this Kreppa is that MAYBE many of these awful, rude, indifferent retail clerks and customer service reps will be fired and replaced by perhaps more mature people who are willing to try harder at their jobs? I don’t wish unemployment on anyone, but I think a little competition for jobs might help this sector. Or, worst case scenario, it will just make the service reps even more bitter…

  • SOe November 27, 2008, 8:57 am

    Sorry for having to say that but even before the “Nokia-time” it was hard to get some straight information from Icelandic banks – according to my experience. And I do not speak of complicated money transactions.

  • alda November 27, 2008, 11:01 am

    Polar Bear – leiðindi heima fyrir?

    Jessica – 1. alas, there is no Icelandic Obama on the horizon, riding on his white steed … but there are lots of highly qualified specialists here that I’m sure could do an excellent job in the different areas of administration, but don’t necessarily have aspirations in politics. To me, that’s one of the best reasons for appointing an extra-parliamentary government. 2. Sadly, no. Bad customer service is just so tightly woven into the fabric of Icelandic society that I don’t think something like this will change it. In fact, I think those who are running the companies are hardly aware that the service is so bad. Fish don’t know they’re wet, etc.

  • Myntkarfan November 27, 2008, 1:01 pm

    I like your blog.

    I put a link to your blog on my page http://www.myntkarfan.wordpress.com, I hope you don’t mind, but please let me know if you want me to remove it. I will add more good links when I have the time.

    I’ve also been writing about everyday life in Iceland during the recession, but I’m not as fluent with the English language as you are.

  • Jessica November 27, 2008, 1:44 pm

    Thanks for the reply Alda. Sadly, you’re probably right about the bad customer service. I suppose it is like the blind leading the blind. My only recourse is to just grow some thicker skin! (and maybe the thicker skin will keep me warmer as well…)

  • Finnguy November 27, 2008, 2:56 pm

    Greetings from Finland.

    I’ve been reading your blog since “interesting times” started. As you have already mentioned, here in Finland we had similar, although not quite as severe (IMF didn’t get involved) crisis during early nineties. You really could learn something from our experiences, about how not to manage crisis. But there you go, down the same path, like it was some odd force of nature that draws economies in crisis to same mistakes, where ever they occur.

    Such crisis allways seem to come with great deal of injustice. Sheer luck becomes biggest factor of life when good people are losing their fortunes, guilty people getting away with theirs, taxpayers getting burdened and vultures making quick gains by predatory tactics. Lying politicians and bankers, it just sounds so familiar. Maybe there is no way around it, you’re stuck with your current batch of lawmakers, they surely won’t allow any quick plugging of injust legal bugs, loopholes and corruption as such action would expose themselves for consequences. It is also why they don’t want elections anytime soon, or any more transparency in your system.

  • Andrew November 27, 2008, 3:48 pm

    Are the criminals likely to be brought to justice, or will all the evidence just ‘disappear’?

  • Karen November 27, 2008, 4:20 pm

    Jessie – that’s a great quote, but most of the Google sources I can find attribute it to John F. Kennedy, and not Martin Luther King, Jr.

  • Jessie November 27, 2008, 4:51 pm

    ^ I read that MLK quoted JFK who quoted Lincoln.

  • Gray, Germany November 27, 2008, 6:09 pm

    …and the apple pie a la mode, but no ice cream on top, only on the side, with strawberry instead of vanilla if possible, if not then no ice cream, just whipped cream, but only if it’s real, if its out the can then nothing, Sally, uh, Alda?

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