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The White Book and Baugur Group

I’ve just finished reading The White Book by Einar Már Guðmundsson …yes, it’s taken me awhile, but only because I was subjected to the literary equivalent of being clobbered over the head and dragged off  this book [affiliate link alert!] – pretty much as I am currently devouring this one [or as the bookstore clerk remarked last Friday when I bought it: “I hope you don’t have anything important planned this weekend … you won’t put it down until it’s finished” which pretty much sums it up. But I digress].

I still don’t know when the English-language version of The White Book will come out, but I can certainly recommend it when it does. It’s a great read, filled with sardonic wit and razor-sharp insights about our Grand Economic Collapse and the sordid affairs surrounding it.

However, because someone was wondering about the former owners of Baugur Group in the comments to this post the other day, I thought I’d share with you a section near the end of the White Book that gives a pretty good idea of their current antics.

And so, Baugur Group is now bankrupt. Jón Ásgeir‘s yacht cost approximately the same as a new Coast Guard defence vessel. Where did the money to buy it come from? According to the Daily Telegraph, the right of possession of valuable real estate in the United Kingdom and Denmark, along with a ski chalet in the French Alps, was transferred from Baugur to Gaumur ehf. shortly after the bank collapse in October [2008]. Need we mention that Gaumur is 100 percent owned by Jón Ásgeir and his people? Gaumur believed that it was owed money by Baugur. Jón Ásgeir owed Jón Ásgeir money and seemed to be prepared to pay off his debts to him, but not his debts to anyone else. Yes, shortly prior to Baugur’s 160-thousand-million-krónur bankruptcy, Jón Ásgeir decided to pay Jón Ásgeir what he owed Jón Ásgeir. In other words, through its infinite generosity, Baugur paid Gaumur, and Gaumur thus took over valuable assets from Baugur, which, strictly speaking, Baugur didn’t own. Does this not remind one of Ancient Greek Philosophy, the part called irrationality? [p. 173]

Meanwhile, the main outrage these days is that Hagar, which used to be part of Baugur Group [if I’m not mistaken – all those cross-ownership ties can be awfully confusing] and which is now bankrupt, looks set to be sold back to Jón Ásgeir and his father Jóhannes, minus a hefty share of the debts they incurred, which shall just be written off by the creditor – a bank [Kaupthing, now called Arion, how lame is that] in the public domain. Bananas, anyone?

Temps around 0°C and icy winds. A storm warning has been issued for the central highlands, where no man dares to tread at this time of year. The sun came up at 10.23 and set at 4.03 this afternoon.



Comments on this entry are closed.

  • RK in Los Angeles November 24, 2009, 7:30 pm

    Lame? Can we talk about the fact that the word Arion sounds exactly line Aryan! Arion bank – Aryan bank.

    So basically, we have a bunch of arrogant white a**holes from Iceland buying up almost entire Copenhagen and London thinking they were somehow superior to other bankers and business men around the world and had figured out some kind of secret strategy that no one else had thought of. Then running them all and the entire Icelandic country along with it into bankruptcy. Then rename Kaupthing in some kind of Trojan horse move to get back into the game, and calling themselves the Aryan bank. Yes they are idiots but their English cant be that bad that not one person made the connection. When you chose a name for a company, you sit down and discuss everything that could possibly be associated with the word. So I personally am convinced this is intentional. At least they came out of the closet, its no longer a secret.

    What a PR move! Thank you Kaupthing for one more nail in the coffin of Icelands trustworthiness and friendship with other nations.

    Just in case anyone thinks Im making too much of this, try googling those 2 words together and see how often they appear together and in what context.

  • Kris November 24, 2009, 9:30 pm

    I would say, OMG, don’t’ they have fraud or securities laws, but I already know that they don’t. Not any that are useful, anyway.
    100 years of solitude might not be a bad idea for Iceland. Sort of an international time-out for misbehaving.
    Why not the company called Gaurar! Sorry, no Iceland keyboard.

  • James November 25, 2009, 12:15 am

    I’m waiting for Jon Asgeir’s autobiography, although I suspect he has the right to remain silent. And anything he writes can be used against him in a court of law. But he does have the right to a ghostwriter. If he cannot afford a ghostwriter, one could be appointed to him.

  • Peter Reeves November 25, 2009, 3:43 am

    It happened prewar in the US and postwar in the UK , until they developed a whole raft of legislation to clamp down on fraud.

    JAJ has contravened every basic securities and solvency law, and would have been in prison by now in either of those countries.

    The tragedy is that Icelanders are still distracted by Anthills and Terrorism, whilst the Banks are continuing to screw the citizens.

  • Joerg November 25, 2009, 7:59 am

    I am eagerly awaiting the White Book becoming available in English, soon.

    A couple of weeks ago, there was an interview with JÁJ in a program on German TV, featuring the Icelandic crisis, in which he showed very little understanding about what went wrong in Iceland and about his personal role in this. It appears very surrealistic, that he should be back in charge of the better parts of his former business empire so soon – all to the disadvantage of his foreign creditors. This is not really adding to Iceland’s trustworthiness.

    As Arion is – among other things – the name for a genus of slugs, “lame” might be an appropriate characterisation. But on their website they claim that “the new name comes from Greek mythology and symbolizes perseverance, cooperation and new beginnings”. Unfortunately, the greek legend about Arion, who, after being kidnapped by pirates, threw himself into the sea and then was miraculously saved by dolfins, doesn’t tell at all that he had a different name before the “being-saved”-part of the story. So, if Kaupthing alias Arion Banki has the intention to re-enact the legend, we don’t quite know if this is currently playing before or after the plunge.

    According to their website, they are “guided by the values of professionalism, ambition, concern for others and loyalty”. “Ambition” as a key value is not so new and might be somehow misleading. I was missing “credibility” and “stability”.

    And the similiarity of Arion and Aryan, mentioned by RK, is indeed somehow irritating. But I would presume – or at least hope, that this is more incidental than an expression of the intention to cater for the interests of white supremacist target groups.

  • RLJ November 25, 2009, 9:47 am

    RK, that smells just a teeny bit paranoid; I’m a native English speaker who has lived in Iceland for 6 years and can speak Icelandic fairly well (I also speak Italian and have a fair sense of the classics) That connection had never even crossed my mind.

    Still, it was only a matter of time before Godwin’s law emerged on the blog. (I don’t think Alda could bring herself to comment on our friend Hannes Hólmsteinn comparing himself to a holocaust victim.)

  • kevin o'connor waterford Ireland November 25, 2009, 11:53 am

    Perhaps a bit anti icelandic to say but maybe the Brits and Dutch and Germans are the good guys bringing icelanders to heel. As very little is being done in iceland same old crew cruising on as before with their deals.

    Icelandic elite to population “Sorry we have to pay all this money to nasty people in Europe so we will increase taxes and cut benefits dole, medical education etc but its not our fault its them and oh yes that mortgage that was in foreign currency has doubled and you still have to pay”

    What can be done , heres an Idea to help struggling icelanders out seen as being let off debts is all the rage there just declare that all mortgages are null and void and just to help out the renters those poor unfortunate souls that never got on the property ladder ha ha transfer the title deeds to them. Hey just watch the flak fly !!!

    Meanwhile the deals just go on and on

  • alda November 25, 2009, 12:06 pm

    Kevin – oh I think we desperately need foreigners to intervene in various aspects of running this country. Not to snap up our resources, mind – but certainly to give some of our politicians/ entrepreneurs valuable lessons on various levels.

    And thanks for the link. My favourite quote: “On a personal level I have always found [Jon Asgeir] to be an honourable guy.”

  • RK November 25, 2009, 4:33 pm


    LOL at Godwins Law.

    Maybe its going a bit far saying that they drew the connection and it is intentional. But on whether Im being paranoid or not I have this to say:

    My circle of friends composes mostly of Icelanders who have lived abroad and many of them moved back again. Over the weekend since the announcement of the new name Ive heard from many of them, and all of those I spoke with had the very same first thoughts about the choice of names. So it seems Im not the only paranoid one. Maybe its just a really awkward choice of a name, but I personally have always found the mentality behind the Útrás really disturbing. For these people to assume that they had some ability to run businesses that the rest of the world doesnt have, is a form of Supremacy mentality and that is what keeps bothering me. Only recently did someone comment on Silfur Egils blog stating that Icelanders were simply better at everything than the rest of the world.

    Individuals like that can be found in all cultures however, we certainly have quite a few of those here in the USA. As Alda has made a point of repeatedly on her blog, its important to remember that this is a group of people in Iceland that does not reflect the entire population. A hundred years of solitude is hardly a cure for that and not really easy to hear those kinds of sentiments. What good would that do anyway? Kick the rest of the hardworking and honest people of Iceland to the ground, isolate us which would end up in anger and bitterness and add fuel to the rage of those handful of self entitled idiots who then would go out and cause even bigger problems. Besides the general public doesnt deserve to be punished for the actions of aforementioned a**holes.

    What needs to be done is to pass laws to prevent things like this from happening (which is what the government should have done in the first place, then we wouldnt be in this mess) and also to acknowledge what I am calling the elephant in the living room which is that there is a handful of Icelanders that believe that they are somehow superior (better, smarter, faster, prettier) and when you give these people tools like bullet loans and fake stock markets all hell breaks lose and they end up bankrupting again this otherwise beautiful and beloved country and culture.

  • alda November 25, 2009, 5:59 pm

    RK for president!