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Who needs concerts when you have protests?

Seriously. Protests are where the greatest stuð is these days [an excellent word that is virtually impossible to translate but falls somewhere between ‘fun’ and ‘rush’] here in Niceland. As everybody knows, the recent revolution has consisted of people showing up in strategic locations and banging pots, pans, drums or whathaveyou, inevitably creating a tribal beat replete with chanting of the slogan most appropriate to the occasion, such asVanhæf ríkisstjórn [incompetent government] or Davíð burt! [Davíð out!]. The beat of the former went something like this VAN-HÆF RÍKIS-STJÓRN! [dum-dum-dum dumdum] VAN-HÆF RÍKIS-STJÓRN [dum-dum-dum dumdum] … repeated over and over again until, well, the government collapsed. The pinnacle of fun, of course, was the addition of a bonfire, so people could bang, chant AND dance like mad around the fire.

When was the last time you had that much fun at a concert, I ask you? There’s certainly been a helluva lot more stuð at the recent demos than, say, that excruciating Eric Clapton debacle last August. I’llsaynomore.

Anyway, to cap the concert analogy, take what happened in front of the Central Bank this morning. One of Iceland’s most popular singers for decades, Bubbi Morthens, pulled up in a delivery van that contained his former band EGO [the irony of the  name was not lost on our YT] and proceeded to rock up a storm in front of the CB. In between performing some of his best-loved songs he shouted at Davíd Oddsson to haul ass out of the bank and, failing that, urged the staff of the CB to join forces with them, the protesters, and carry him out [but gently, so as not to hurt him].

Meanwhile, on a less frivolous note, two Icelandic economists, Gylfi Zoega from the University of Iceland and Jón Daníelsson from London School of Economics, have prepared a rather excellent paper on what happened here in the lead-up to the collapse, and subsequently. The two of them appeared in Kastljós last night to introduce the report and said that they’d felt there had been no real objective reporting on what took place from those within Iceland – hence their effort. I’ve read some of the report [it’s about 19 pages long] and am dead impressed with what I’ve read so far. It’s just a really sound, down-to-earth analysis of the entire mess, written in a language the most people can understand. Excerpt:

It is not clear to us why the Icelandic authorities did not resolve the problem before it was too late, and even encouraged the bank expansion abroad in full knowledge of its serious difficulties. The only explanation we can find is that the Icelandic authorities opted for gambling for resurrection. Realizing that the banks were likely, but not certain, to fail they opted to bet on the possibility of survival. Unfortunately, the downside risk of this bet was substantial, and the bet failed.

The full report can be read here under the heading “The Collapse of a Country”.

The party in front of the Central Bank this morning was held in temps of around -8°C, so you have to hand it to those who had it in themselves to show up at 8 am [YT was not one of them – boo]. Right now -7°C [19F]. The sun came up at 9.39 am and set at 5.46 pm.



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  • James February 11, 2009, 2:50 am

    Who needs Oddsson when you have Grimsson?… [Grimsson’s comments yesterday succeeded in being as inflamatory to the Germans as Oddsson’s comments last October were to the British/Dutch]

  • James February 11, 2009, 3:03 am

    BTW, that Daníelsson-Zoega article was excellent (a long read, but worth it).

  • Voyager February 11, 2009, 4:32 am

    It is difficult to imagine what it feels like to live in the roller coaster of Iceland right now. Hold on!

  • Steve February 11, 2009, 7:14 am

    The funny thing is that Grimsson didn’t say anything radical, just that the taxpayer wouldn’t be picking up the tab to make sure (foreign) depositors received 100%.

    Of course, if you’ve just lost a load of peoples’ money, you have to act very contrite. I’ve a feeling he doesn’t do contrite.

  • Ljósmynd DE February 11, 2009, 7:45 am

    There are some articles available in the Financial Times Deutschland, the newspaper, which the Icelandic president had an interview with yesterday. One of them is of the more sensationalist and simplifying kind, tagging everything at the author’s convenience (Like calling the efforts of the Icelanders to get rid of the people, who are responsible of the crisis, ‘witch-hunt’).


    Another article contains a recording of the interview with the president.


    The statements of the president are considered somehow cryptic. I think, he once again did not discern between savings accounts and other investments, when he refers to the compensation in full. As far as I know, only the savings accounts with Kaupthing Germany are considered to be compensated in full. The president might have a point about this full compensation as this was not unambiguously agreed on beforehand. The compensation, guaranteed by the Icelandic deposit protection fund, was at about 20000 EUR. So, the full compensation of the German savers was seen as justified in order not to be discriminated against savers from other nations. I would be interested to know, if Kaupthing savings accounts in Iceland were compensated in full. Maybe, somebody could help with an answer.

    And thanks for providing the link to the Daníelsson-Zoega article. It will take me some time reading it.

    And the stuð notwithstanding, I hope that the protests are going to lead to some result soon (Carrying on with the vibe until summer, though, would make one more tourist attraction).

  • Paddy February 11, 2009, 9:02 am

    Bet being the operative word.
    Bankers can’t even be called criminals. One can learn from criminals in general. The first principal is money up front; simple as that or you end up with ”three worthless cows.”
    You have two cows.

    John Paulson borrows one cow so he can sell it for $100. He gives you $10 as collateral.

    You buy your neighbors cow for $100, which you finance by taking out a $90 loan from the bank and use John’s $10 to make up the rest.

    You brag to everyone about your financial health. You have assets: two cows you own, plus one Paulson owes you . You have three cows worth $300, and liabilities of just $100.

    Suddenly a third of the country goes vegetarian.

    You thought your two cows were worth $200 and now they are worth $140.

    You express confidence in your financial health. Your assets are now worth only $200–your two cows plus the one John owes you–but your liabilities are still only $100. If necessary, you could sell the assets at this distressed price and pay off all your loans.

    You hold onto your cows because you are sure the market is “dislocated.” Some day someone will want to eat beef again.

    The rest of the country goes vegetarian. Your two cows are now worth $2 each to guys who want to make dog food.

    John Paulson buys a cow in the market for $2 and he gives you back your cow. You now have three cows worth six bucks.

    (Yes you guessed it)John wants his $10 back.

    The bank calls and wants the $90 back.

    You call the Federal – Cow – Reserve and ask for a bailout.

  • hildigunnur February 11, 2009, 9:05 am

    Today at noon we’ll be in front of the CB, singing funeral hymns for the bank government…

  • Flygill February 11, 2009, 9:06 am

    That Danielsson-Zoega anaysis is pretty good, despite the anti-septic language (no mention of the words “corruption”, “croneyism”, and “criminals”.) Very depressing reading, if you’re an Icelander, almost enough to make you put your head in an oven and turn on the gas. They say that public debts are 110-160% of GNP, that’s 1400-2100 billion ISK, and doesn’t include all the Icesave and bank debt. Crikey. And their numbers are conservative. For instance, they say that 40-60% of businesses are technically bankrupt, while others estimate the number to be 70-80%.
    Maybe the Sjalfstaedisflokkur’s policy of praying for a miracle isn’t such a bad idea after all.
    Perhaps the protesters can adopt a new slogan, from a famous Janis Joplin song, “Freedom’s just another word for nothing left to loose …”

  • Gummi February 11, 2009, 9:31 am

    “banging pots, pans, drums or whathaveyou”
    And don’t forget the important part Quality Street has played in the revolution. Actually, my friend wanted to call it the “mackintosh-revolution” (Quality Street sweets are call “makkintoss” in Iceland, which is the name of the original manufacturer before the evil Nestle bought it) , because of the large number of people banging on Quality Street cans. The reason for that is that Quality Street sweets have been the most popular yuletide sweets in Iceland for decades so every year, after christmas is over, there is a whole bunch of empty quality street cans lying around. This time, they were put to good use.

  • alda February 11, 2009, 10:15 am

    Heheh. Makkintoss revolution. Yep.

    Thanks for the input, all.

    Flygill – yes indeed, it’s enough to make you want to do that. Thankfully we’re fighters up here. But it’s going to be a rough ride. Make no mistake.

    LDE – alas, I fear the protests this time around will do no good. Doddsson’s impenetrable ego will see to that. I firmly believe that he will never bow to public pressure – the only way to oust him is to do what the government is doing – change laws and then fire his ass.

  • Baldvin Jónsson February 11, 2009, 10:37 am

    Algerlega dásamleg skrif Alda, takk fyrir mig 🙂

  • alda February 11, 2009, 11:19 am

    Takk sömuleiðis!

  • Steve February 11, 2009, 11:49 am

    LDE. AFAIK, the Icelandic deposit protection fund is largely irrelevant to the Kaupthing issue in Germany, as the liquidation of Kaupthing is providing enough money to repay more than 20k euros per account.

    So if the German depositors do get all their money back, none of it will have come from the Icelandic deposit protection fund.

    The big problem, to my mind, is the way the new banks have been set up. Let’s ignore the obvious problem with estimating the write down of the assets (in the form of loans to Icelandic companies), which in Kaupthing stands at 66% atm. The big problem is that Icelandic depositors have effectively been given a 100% recovery guarantee by the banks. That’s achieved by counting the Icelandic deposit liabilities within the new banks at 100%, whereas those foreign ones in the old banks are counted at whatever they turn out to be.

    That’s wrong. I have no problem with the Icelandic government guaranteeing any shortfall regarding Icelandic deposits, but it is flat out wrong to do it via the bond owed by the new to the old banks.

  • Steve February 11, 2009, 12:02 pm

    EDIT: Ah, you can ignore that last post 🙂 . I’ve just looked at Kaupthing(Old)’s accounts and the deposits are minimal and will easily be covered (hell, the bond from New Kaupthing will cover them).

    Anyone got the Lansbanki a/cs?

  • Andrew February 11, 2009, 3:10 pm

    Is is true that another one has just resigned leaving only Oddsson?