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The good, the bad, and the busy

It’s been a good weekend for …

Iceland’s President, Ólafur Ragnar Grímsson. After campaigning for weeks to have his salary lowered by 15 percent [because, you know, everybody’s doing it] he was successful last Friday when the Minister of Finance took pity on him and agreed to his terms. Previously the state Salary Council had rejected his appeal to have his wages pruned on the grounds that it violated the constitution. And you thought you had problems.

It’s been a bad weekend for …

Höskuldur Þórhallsson, who was elected new Head of the Progressive Party today – for a grand total of ten minutes. Höskuldur went through all the motions of euphoric victory replete with kisses, congratulations and an accession to the podium, at which time it was discovered that a mistake had been made in counting the ballots and that his rival, Sigmundur Davíð Gunnlaugsson, had actually been elected. D’oh!

It’s been a busy weekend …

For YT, who due to time constraints had to choose yesterday between attending the Saturday demonstration and attending a meeting of Hugmyndaráðuneytið [The Ministry of Ideas] – a new grassroots forum for innovators that will help them network and hopefully launch businesses that will be making mounds of dosh by the time we all emerge from the kreppa. [More on that later.] It was a difficult choice because, as you know, I am adamant that people should turn up at the Saturday demos if for no other reason than to stand up and be counted. And then you get this pesky thing called life that gets in the way. Sigh.

AND IT’S BEEN A COLD WEEKEND
Make no mistake: we are in the throes of winter up here in Niceland. Today was an utterly gorgeous day, clear and calm, awash in pastels from morning till night. I did manage to get out in the fresh air for a few minutes and took my camera with me – with any luck I’ll get to post some pics in the next few days. Right now 1°C [30F]. Sunrise was at 10.47 am and sunset at 4.30 pm.

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  • Andrew January 19, 2009, 1:14 am

    Now that the President has had his 15% pay cut, don’t all the politicians get a pay cut? Perhaps Oddsson can be given a 100% pay cut, because if he won’t resign, that’s what he’s worth!

    Which one did you attend in the end? Why were they at the same time!?

  • Melissa January 19, 2009, 3:17 am

    I’ve just sweltered through a week of 37 degrees C (approx 100 degrees F) in australia’s capital, Canberra. I’m just daydreaming of my holiday in Iceland two years ago and wishing I could import some that coldness down under!

  • James January 19, 2009, 10:47 am

    I wish my consultancy rates were protected by constitution! And looking forward to hearing about that Ministry of Ideas in future (from a quick scan of their web site, I could understand only the word “CrunchBase”). BTW, I just ordered an organic T-shirt with autumn logo…

  • Dave Hambidge January 19, 2009, 1:56 pm

    What a choice for the weekend; freedom or food.

    BTW Is anyone else having RSS feed problems from this site?

    I seem to be missing quite a lot.

    dave

  • alda January 19, 2009, 2:09 pm

    Andrew – they’d already taken a pay cut. That’s why the prez wanted to get in on the action. – In the end I attended Hugmyndaráðuneytið – they were not at the same time, but I didn’t have time to go to both.

    Melissa – yes, 37°C is too much!!

    James – thank you! hope you enjoy wearing it. 🙂

    Dave – feed problems? This is the first I’ve heard of it. Anyone else?

  • Daniel January 19, 2009, 4:11 pm

    When I left Massachusetts Friday it was in the -20 C range! Reykjavík has seemed positively balmy in comparison! I’ll gladly take these temperatures.

    I showed up for the end of the protest Saturday after the PA roused me from a jetlag induced nap. I don’t think my presence really counts though, being a foreigner and all. It was neat to see it happening though. If the same percentage of the population at home got up and voiced their discontent weekly over the past 8 years…

    Well, I can certainly think wishfully.

  • Jon January 19, 2009, 4:32 pm

    I think a “Ministry of Ideas” would be good for all countries. I am sure the general populace can come up with some pretty good ideas for making things better. You got a nice plug from Iceland Review today!

  • A Nobody January 19, 2009, 8:35 pm

    “Iceland’s central bank said Russia had agreed to provide the country with loans of 4 billion euros.

    Sedlabanki said in Icelandic on its website that the Russian ambassador to Iceland, Victor Tatarintsev, had informed Central Bank Governor David Oddsson on Tuesday that Russia would provide Iceland with the loan. It said the loan would substantially strengthen Iceland’s foreign reserves and support the Icelandic krone.

    The central bank said the loans were for 3-4 years on terms that would be 30-50 points above Libor rates. It said Iceland’s Prime Minister Geir Haarde had begun investigating the possibilities of such a loan this summer.

    So your Prime Minister knew about the crisis in the summer.

  • Muriel Volestrangler January 19, 2009, 9:21 pm

    For info on the latest scandal go here:
    http://economicdisaster.wordpress.com/2009/01/18/rotten-business-between-al-thani-kaupthing-and-olafur-olafsson/
    A group from Qatar bought 5% of Kaupthing in September 2008, a surprising event in light of the shaky standing of the bank. This move was meant to boost confidence in the bank and its falling stock price. As it turned out, the Qatari sheik Al-Thani purchased the 5% with money borrowed from the bank with collateral in the shares themselves. The Kaupthing boardmember/owner Olafur Olafsson (a “friend” of the sheik) engineered the transaction using Kaupthing bonds through subsidiaries in the Cayman Islands so that Al-Thani lost nothing if the shares became worthless. The bank ended up losing 300-400 million euros, maybe more. Exactly where the $300-400 million ended up is not clear — but it went into someone’s pockets.
    This transaction would be a criminal offense in nearly any civilized country — except in Iceland and the Cayman Islands.

  • JoeInVegas January 19, 2009, 9:42 pm

    -1 is still cold. ug

  • Ljósmynd DE January 19, 2009, 9:44 pm

    I really feel reassured that at least lowering the President’s salary is in accordance with the constitution if nothing else is. I have just read some news of the scam about the Kaupthing acquisition last september, which was supposed to provide the illusion of trust in the bank at a time, when it was nearly finished. It makes Iceland look like an iceberg. You are watching more and more evidences of corruption and deceit and are not sure if you really want to know the other 90% still below the surface… Just speaking as a former customer of Kaupthing, who was able to draw his money out just in time.

    But at least hearing of grassroots movements like Hugmyndaráðuneytið is spreading optimism.

  • alda January 19, 2009, 9:54 pm

    LDE – The Kaupþing scandal is not an isolated incident – Glitnir created shelf companies that it lent money to in order to buy shares in itself to keep the price high – looks like Kaupþing did the same thing with the sheik. Not that it makes it any better. Like you said, the scum is rising to the surface now – we’re only seeing the start of it. But at least the cleansing is taking place and with any luck we will end up with a healthier society.

  • Marc January 19, 2009, 10:05 pm

    Alda,

    Is there any accountability as to what the government/central bank does with the loan from the IMF? From what I can see now they’re trying to support the ISK at unsustainable rates. Official rate is still below 170 ISK/€ while on the markets you’d have to pay 326 ISK. That is not sustainable.

    m

  • wally January 19, 2009, 10:25 pm

    Honestly it is all starting to make me feel a bit sick. They are all so very very crooked. I remember at first how we lauded Kaupthing as the one bank that didnt deserve to fall….

  • alda January 19, 2009, 10:44 pm

    Marc – nobody knows. It’s all so opaque – we have no idea what they’re doing. However I think the IMF must have set strict criteria.

    Wally – hah! those were the days …

  • Rozanne January 20, 2009, 3:45 am

    I can’t image any politician in the U.S. volunteering for a pay cut, even if they could easily afford it.

  • Steve January 21, 2009, 10:39 am

    >I can’t image any politician in the U.S. volunteering for a pay cut

    It happened back in ’32 & ’33. Coincidentally ~5% in total.

  • Steve January 21, 2009, 10:40 am

    Sorry, that was 15%, not ~5%, which makes a little more sense 🙂 .

  • Magnús January 21, 2009, 11:38 am

    Hi all

    Regarding Marc’s comment….

    The IMF loan is still sitting pretty in the Icelandic Central Bank’s account in New York. Apparently, they are not shoring up the krona with direct market measures (i.e. buying kronas on the market) instead relying on the currency restrictions. The exchange rate that you mention (326) is probably the one quoted from the ECB but that one is not reliable since there is no market for ISK abroad anymore.

    Given the huge trade surpluses in the last 4 months and the currency restrictions we should be seeing a strengthening of the krona by now. However, that is not happening, and is seems that there is a loophole in the laws that some exporters are taking advantage off through a bank called Straumur which is owned by one of our best loved ,,vikings”, Björgólfur Thor.