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Just when you think things can’t get any more corrupt … THEY DO!!

Apropos the last post, it now transpires that the mere dividends that the two Björgólfurs received from their ownership of Landsbanki were actually HIGHER than the loan they would now like to have written off. The loan they took to be able to buy the bank.

In other words, they milked out of the bank more money than they still owed in it.

How f*cking insane is that??

Why didn’t they pay off their goddamn loan before they went off on their greedy spending spree buying private jets and telecommunications companies in Bulgaria and West f*cking Ham in the UK, plus their sundry of other toys and businesses???

On top of all that, it has come to light that the head of the loans department of Búnaðarbanki [now called Kaupthing], which loaned them the money to buy Landsbanki, was one Sigurjón Þ. Árnason, who was promptly made CEO of Landsbanki under its new owners. Argh!!

Incidentally, Sigurjón Þ. Árnason was the mastermind behind the Icesave accounts, which now look set to drive this country to the brink of bankruptcy and which must without a doubt be the most awful, mind-draining, soul-crushing matter that this nation has had to deal with in manymany centuries. The awful situation we’re in – faced with an agreement that we can neither accept nor deny, because acceptance can mean setting this country back many decades, and denial can mean our complete isolation from the global community.

Seriously, sometimes I just think this can’t be happening, it has to be a joke. I think I’m going to wake up and the Björgólfurs are still the responsible, astute businessmen they purported to be, instead of the scheming crooks they’re turning out to be. And Sigurjón Þ. Árnason is still running Landsbanki, and not a fricking lecturer at Reykjavík University.

AT LEAST WE’VE HAD A GREAT DAY
After days on end without any sunshine, we finally had blue skies today and blazing sunshine. Such days are so few and far between here that there’s nothing to do but make the most of them. In other words, YT closed up shop due to weather [plus it was Friday afternoon and I had nothing pressing – the joys of being my own boss] and headed to the pool with AAH and her friend Agnes. EPI joined us about an hour later. We flaked out there in the sun along with all the other slackers, before slouching off to the store around six and fetching something we could thrown on the barbecue. Right now 13°C [55F]. Sunrise was at 3.26 and sunset due for 11.38.

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  • Lee July 11, 2009, 1:09 am

    The French and Russian revolutions removed privileges from the aristocracy, but Iceland’s saucepan revolution is just strengthening the privileges by making them more explicit. It’s almost like a prelude to a real revolution.

  • Jessie July 11, 2009, 8:02 am

    You really can’t make this stuff up.

  • maría July 11, 2009, 11:45 am

    A real revolution is about to happen in Iceland, they say, yes.

  • SkúliSæl July 11, 2009, 1:14 pm

    In the old days the poor and oppressed had the mobs, lynching, bloody revolutions, martyrs and assinations. Now we have bloggers. Keep up the good job Alda

  • martin July 11, 2009, 3:32 pm

    Whatever the Bjorgolfurs were personally milking off the banks they certainly were not investing it in West F*cking Ham – The money to buy the club was borrowed from Straumur,MP Bank , Byr and Landsbanki.Money spent buying players was then borrowed from yet more banks and has thus left the club in a financial crisis which has resulted in auditors refusing to sign off accounts that are a year overdue. The club are now in the hands of Hansa’s main creditor Straumur who have turned down offers that would have seen them recover all the money they were owed whilst, in turn, expecting their own creditors to take reduction in in the amounts Straumur owe them!
    Likewise Thor’s business empire is all on borrowed money – Actavis was aquired with a 5b Euro loan from a German Bank.
    Any money these charlatans have extricated has gone into offshore accounts and will never be recovered.These people’s have used everyone else’s money but their own to fund their business empires and now they want everyone else but themselves to pay for it ..Again.

  • Marc July 11, 2009, 7:55 pm

    One of the things that keeps amazing me is the lack of public information available on the state of the Icelandic finances. I never see any figures about how much extra debt the state is going to take on because of the banking rescue (not even a fork, like between x and y). Also, somehow this HAS to have consequences on the state income/expenditures. So, has anyone already presented a plan how these extra debts are going to be funded. Have spending cuts been announced? Or tax hikes?

    Or do we think everything will just go away if we do not talk about this?

  • Gwrhyr July 11, 2009, 8:51 pm

    It sounds like some sort of revolution is needed… obviously a system that not only let this happen, but encouraged it, is a failed system. And Eva Joly is right, if more and more dispiriting news like this comes out, the social contract is null and void, which means revolution,and if a revolution does happen, hopefully it doesn’t tear Iceland apart.
    Somehow, I think the most revolutionary thing that Iceland could actually seriously do would be to refuse to take on the debt, and ask the international community to recover the funds from those individual corrupt Icelanders who made the debt in the first place, absolving the taxpayers of responsibility.

  • Jessie July 11, 2009, 10:42 pm

    Alda, what kind of information is the government providing Icelanders in terms of the status of the investigations and the net worth of the individuals being investigated? I read somewhere that there are around 30 key individuals being investigated.

    I agree with Gwrhyr in theory, that Icelanders should refuse to pay the debts and should recover the money from collecting/selling off the assets of the knuckleheads who illegally pilfered from the banks, but worry about what consequences would result from the international community — I would imagine that Iceland would be ostracized. It seems very doubtful that they could recover enough funds to substantially absolve the taxpayers, though it would be a start.

  • Sigvaldi Eggertsson July 12, 2009, 11:05 am

    Marc, I do not know what media you have been following but we here in Iceland have received a great deal of information on the finances.
    Some of it is still unclear, such as how much money will have to be put in the state owned banks but the picture is getting clearer and both tax hikes and budget cuts have been announced.
    And I do not understand your last paragraph, we talk about little else here in Iceland.

  • alda July 12, 2009, 12:28 pm

    Thanks for your input, everyone!

    martin – very interesting…

    Marc – basically what Sigvaldi said. Yes tax hikes and cutbacks have been announced and it’s still unclear what the debts are because the figures aren’t entirely available. For instance, it’s not known how much the assets of the banks will fetch, to offset the debts. And yes, people talk about this ALL THE TIME.

    Jessie – I think we’re getting as much info as they are able to provide without jeopardizing the investigations. At least that’s my assumption. We hear about some of their homes being raided, we’re told that a number of people have been called from abroad (where they mostly live now, of course) for interrogation, etc. We don’t get specifics about their net worth, only news about their assets plummeting, etc. So nothing comprehensive, but bits of news nonetheless.

  • Paul H July 12, 2009, 6:56 pm

    What a bunch of Monkey Fighters! [that’s ‘especially ruined for television’ overdub talk]
    Just got back from our 10 day visit to Iceland (awesome beyond words).
    Catching up with IWR etc.
    Made new friends again, really good people.
    I wish there was something those of us who are an útlendingur could do.
    All good Icelanders (those not responsible for this mess) are in our thoughts and prayers.

  • cargocultist July 12, 2009, 8:53 pm

    The central bank of Iceland does have quite a lot of information on its web site in its statistics section.

    http://www.sedlabanki.is/?PageID=548

    The money supply statistics are quite interesting, in and of themselves.
    – cc

  • tom joseph aka tj3 July 12, 2009, 10:47 pm

    The story of the ownership of Landsbanki is not unlike bank and finance failures here in The United States. The principle is the same. The people here who messed up our financial system anre in large part right where they started, and profiting from the mess.

    There is a current movie about the 1930s American bank robber John Dillenger staring Johnny Depp. Public enemies like Dillenger never even dreamed of going off with as much gold as the Landsbanki abuse earned for its schemers.

    Another movie character, the Pirate long John Silver once said “Fortune rides the shoulders of thems what scheme.

  • Marc July 14, 2009, 7:34 am

    It’s good to hear that. Not living in Iceland + not being able to speak the language I guess it passed me by. The thing about not being sure how much the assets will fetch sounds reasonable enough to me, especially in the current environment. Do you know of any english language source where I can read more about this? Thanks a lot.

  • alda July 14, 2009, 10:20 am

    Marc – I don’t know of any sources except those you probably already know about – http://www.icelandreview.com, http://www.icenews.com, http://www.economicdisaster.wordpress.com. Getting information in English is a real problem for a lot of people – imagine the expats living in Iceland who were in the middle of all this and could only get snippets of information.
    Perhaps other readers have info about sites that I don’t have …?

  • Bromley86 July 14, 2009, 2:02 pm

    Newsfrettir for some articles that don’t make it to the other sites:
    http://newsfrettir.com/

    And, of course, the Ministry of Puffins for some excellent detailed stuff. Unfortunaltely Physchim hasn’t updated since May, but what’s there is very good:
    http://minipuffin.blogspot.com/

    I haven’t read enough to form a solid opinion of Independent Icelandic News, but it’s here:
    http://icelandtalks.net/

    Finally, there’s your old buddy JadetreePaul over at the Grapevine.
    http://www.grapevine.is/Home/

    A neat trick is using Google news with words like Icesave (Iceland gets you too much about Kerry Katona etc.). I keep seeing good stuff by Omar something and Tasneem somebody on Bloomberg.

  • Bromley86 July 14, 2009, 2:20 pm

    Marc. Not that you’ll likely come away any less confused, but Bjarni’s post linked below has links to Landsbanki resolution committee reports. Anything you see by Bjarni is worth a read – he was the first one on IceNews to actually bother reading the EEA guarantee text 🙂 .
    http://www.icenews.is/index.php/2009/06/21/protests-in-iceland/#comment-82768

  • Elín July 14, 2009, 6:20 pm

    Íris Erlingsdóttir at Huffington Post …

  • Paul Crik July 14, 2009, 11:43 pm

    A lot of people like to say that it’s just America that has this bad problem with capitalist greed, but I see it everywhere, from Iceland all the way down to the tiniest places in South America. Cold to hot. Greed and self-interest seem to me, for better or worse, to be as innately natural as they are the product of capitalist cultures. Bernard Madoff is the true new icon for greed. For 25 years he was a money-vaccuum, just sucking and sucking and emptying the bag. Iceland, though it has always been a loved land with good, hearty, talented people (a la Bjork) is not immune.

  • Jessie July 15, 2009, 12:49 am

    I just got around to watching the documentary on Enron, The Smartest Guys In the Room, and have to say it was quite good, and also reminded me of what happened in Iceland with the unchecked pride, arrogance, intolerance and greed. What was interesting was that it’s not just a story about numbers and complicated transactions but a reality check about human nature and morality in an unregulated financial world.

    For instance, there was a study cited in the documentary from the 1940’s where a subject is to ask questions to another subject, who is actually an actor. When the actor got an answer wrong, he received an electric shock. For every additional incorrect answer, he was shocked at an increasing voltage, to the point where he could have died (of course, he wasn’t actually being electrocuted). There were several test subjects, and each would initially display concern about electrocuting the other “test subject”, but the person overseeing the study would say “just push the button”. So long as someone else was giving them the order, they felt less morally responsible for their actions. It occurred to me that, so long as others were acting with the same greed at any cost, and modeling the Icelandic market to follow unregulated free-market capitalism advocated by people like Milton Friedman, it made people feel less morally / ethically responsible for their individual actions. This is what happens when human behavior goes unchecked. A cursory glance at the last century shows us this i different forms. This is why (in my opinion) free market capitalism will never work.