Free Republic
Browse · Search
Bloggers & Personal
Topics · Post Article

Skip to comments.

Iceland Erects Middle Finger, Wins
Market-Ticker.org ^ | 2/20/12 | Karl Denninger

Posted on 02/20/2012 8:09:06 AM PST by Kartographer

Banks were closed and reorganized, depositors protected and external creditors told to stuff it. Despite claims at the time of "dire consequences" they never materialized -- oh threats were made, but in the end nobody invaded and nobody did a damn thing about it, because they couldn't.

As for handcuffs, we might get those too....

Iceland’s special prosecutor has said it may indict as many as 90 people, while more than 200, including the former chief executives at the three biggest banks, face criminal charges.

That would be a great thing indeed.

The lesson here is that you don't have to put up with the banksters and the world will not end if you feed them to the sharks. Rather, what will happen is that your economy will recover.

We should all make them eat their own cooking, following Iceland's example.

(Excerpt) Read more at market-ticker.org ...


TOPICS: Business/Economy; Government; Society
KEYWORDS: denninger; iceland; ticker
This is what Should/needs to be done here. Will it hurt? Hell yes it will. Will we get through it HELL YES we will. But there are a lot of people in banking, investing and in the watchdog agencies that need to be given new jobs where they spend their days making like rocks out of big rocks and their nights learning the pleasures of domestic bliss under the gentle tutelage of former crack dealing street thugs.
1 posted on 02/20/2012 8:09:12 AM PST by Kartographer
[ Post Reply | Private Reply | View Replies]

To: Kartographer

We need to prosecute thousands ... including many government and political crooks.


2 posted on 02/20/2012 8:14:04 AM PST by FreeAtlanta (Liberty and Justice for ALL)
[ Post Reply | Private Reply | To 1 | View Replies]

To: Kartographer

No need to excerpt:

“Market Ticker content may be reproduced or excerpted online provided full attribution is given and the original article source is linked to. Please contact Karl Denninger for reprint permission in other media. “


3 posted on 02/20/2012 8:14:24 AM PST by An.American.Expatriate (Here's my strategy on the War against Terrorism: We win, they lose. - with apologies to R.R.)
[ Post Reply | Private Reply | To 1 | View Replies]

To: AdmSmith; AnonymousConservative; Berosus; bigheadfred; Bockscar; ColdOne; Convert from ECUSA; ...

Thanks Kartographer.
Iceland’s special prosecutor has said it may indict as many as 90 people, while more than 200, including the former chief executives at the three biggest banks, face criminal charges. That would be a great thing indeed. The lesson here is that you don't have to put up with the banksters and the world will not end if you feed them to the sharks. Rather, what will happen is that your economy will recover. We should all make them eat their own cooking, following Iceland's example.
It's true. Private property and earning a living are overrated. Our only hope is the government and federal judiciary.


4 posted on 02/20/2012 8:23:53 AM PST by SunkenCiv (FReep this FReepathon!)
[ Post Reply | Private Reply | View Replies]

To: Kartographer

As a country, we can’t default. It’s unconstitutional, which is too bad, because it world be the best outcome, at this point.

No one would lend us any money for a good, long time, effectively forcing government to balance its budget, indefinitely. The economy would take off.


5 posted on 02/20/2012 8:26:52 AM PST by St_Thomas_Aquinas (Viva Christo Rey!)
[ Post Reply | Private Reply | To 1 | View Replies]

To: Kartographer
I'd be happy to just incarcerate them under the Japanese prison model. The link is to a New York Times story nearly 16 years old. Things have not changed a lot, including the ongoing threat of lawsuits, to which the Japanese courts continue to extend their middle finger.

Japanese prisons still turn out a lot of high quality manufactured goods. When I lived there, one of the things we looked forward to was the annual sale of prison made furniture at the local Dai-Ei (Japan's Wal-Mart equivalent). It was beautiful top museum quality craftsmanship, something we couldn't afford, but some people did. Some of our more wealthy Japanese friends told me it was bargain priced for the superb quality.

As you might suppose, people who put in 15 hour work days producing this quality of craftsmanship, do not have any energy left to rape, study law, study Islam or riot. But I repeat myself.

6 posted on 02/20/2012 8:29:38 AM PST by Vigilanteman (Obama: Fake black man. Fake Messiah. Fake American. How many fakes can you fit in one Zer0?)
[ Post Reply | Private Reply | To 1 | View Replies]

To: Kartographer

You can close the banks if, like Iceland, most of the depositors are overseas. What are they going to do, invade? Some of them considered it.

However, if the depositors are located right in your country, then things become considerably more complex. The money that disappears in uninsured accounts belongs to your citizens and companies, and the losses will be felt throughout the economy.


7 posted on 02/20/2012 8:34:01 AM PST by proxy_user
[ Post Reply | Private Reply | To 1 | View Replies]

To: St_Thomas_Aquinas

Please post the relevant part of our Constitution that forbids the US Government from not paying it debts.


8 posted on 02/20/2012 9:00:01 AM PST by FreedomNotSafety
[ Post Reply | Private Reply | To 5 | View Replies]

To: FreeAtlanta

Why are people saying its OK to default? What crime did the banks commit that would permit debtors to default? Iceland’s banking crisis resulted from people borrowing too much plus an overvalued currency plus the fact that Iceland is a small market that it vulnerable to swings in interest rates and lending standards in other countries. None of those things are crimes. The same thing happened in a lot of other countries.

The issue is people living above their means and borrowing too much. At a national level, the issue is government over-spending. None of those things are cured by default. Default is the easy way out of dealing with our private and public over-spending problem. Did some banks commit crimes? Yes. Was criminal activity the cause of the crisis? No. We need to buckle down and stop spending and live within our means. Default is a quick fix for people who don’t want to deal with the real issues. Ultimately, it destroys the credit markets which is not a good thing in the long term.


9 posted on 02/20/2012 9:14:31 AM PST by Opinionated Blowhard ("When the people find they can vote themselves money, that will herald the end of the republic.")
[ Post Reply | Private Reply | To 2 | View Replies]

To: FreeAtlanta

Why are people saying its OK to default? What crime did the banks commit that would permit debtors to default? Iceland’s banking crisis resulted from people borrowing too much plus an overvalued currency plus the fact that Iceland is a small market that it vulnerable to swings in interest rates and lending standards in other countries. None of those things are crimes. The same thing happened in a lot of other countries.

The issue is people living above their means and borrowing too much. At a national level, the issue is government over-spending. None of those things are cured by default. Default is the easy way out of dealing with our private and public over-spending problem. Did some banks commit crimes? Yes. Was criminal activity the cause of the crisis? No. We need to buckle down and stop spending and live within our means. Default is a quick fix for people who don’t want to deal with the real issues. Ultimately, it destroys the credit markets which is not a good thing in the long term.


10 posted on 02/20/2012 9:15:24 AM PST by Opinionated Blowhard ("When the people find they can vote themselves money, that will herald the end of the republic.")
[ Post Reply | Private Reply | To 2 | View Replies]

To: Kartographer
Banks were closed and reorganized, depositors protected and external creditors told to stuff it. Despite claims at the time of "dire consequences" they never materialized

Of course they didn't....and they wouldn't have materialized here neither, if they bailouts never happened....now all they've done is to make the inevitable even worse.

11 posted on 02/20/2012 9:16:03 AM PST by dfwgator (Don't wake up in a roadside ditch. Get rid of Romney.)
[ Post Reply | Private Reply | To 1 | View Replies]

To: St_Thomas_Aquinas
As a country, we can’t default. It’s unconstitutional, which is too bad, because it world be the best outcome, at this point.

No one would lend us any money for a good, long time, effectively forcing government to balance its budget, indefinitely. The economy would take off.

Alexander Hamilton would disagree. And our country was much worse off financially after the Revolutionary War.

12 posted on 02/20/2012 9:21:06 AM PST by Moonman62 (The US has become a government with a country, rather than a country with a government.)
[ Post Reply | Private Reply | To 5 | View Replies]

To: proxy_user

There is nothing to stop congress from dropping all of the numerous guarantees it has made. It can drop FDIC, FAN, FRED, Sallie Mae, and the like, anytime it wishes.

It can pass legislation and drop all social welfare programs including Social Security and Medicare tomorrow.

It can flood the world with US dollars and devalue the debt.

Government debt is often referred to as “Sovereign” debt. It sounds all highfalutin but it simply means the King is God and gets to do as he pleases.

“Government debt, especially that held in bonds denominated in foreign currencies. Under the doctrine of sovereign immunity, the repayment of sovereign debt cannot be forced by the creditors and it is thus subject to compulsory rescheduling, interest rate reduction, or even repudiation. The only protection available to the creditors is threat of the loss of credibility and lowering of the international standing (the sovereign debt rating) of a country, which may make it much more difficult to borrow in the future.”

http://www.businessdictionary.com/definition/sovereign-debt.html#ixzz1mwVOTta7

Pain? Sure there will be pain but it is going to happen. It is a straightforward political calculation as to how we default be we will default. There isn’t enough money to pay for all of the promises.


13 posted on 02/20/2012 9:26:00 AM PST by FreedomNotSafety
[ Post Reply | Private Reply | To 7 | View Replies]

To: FreedomNotSafety

I had read that the 14th did, but I just read it, and it looks to me like we’re good to go. So let’s default. What are we waiting for?


14 posted on 02/20/2012 9:27:44 AM PST by St_Thomas_Aquinas (Viva Christo Rey!)
[ Post Reply | Private Reply | To 8 | View Replies]

To: FreedomNotSafety

How dare you ask a logical question in an emotional argument. bottom line is this, IT’S ALL PART OF THE BIG LIE, and sadly a whole lot of people now believe this falsehood, we could DEFAULT TOMORROW if we wanted. In Fact I believe that We The People could also Grant to Ourselves Complete Sovereign Immunity from All Civil Liability for All Public Debts and Contracts through the initiative process in ANY STATE that allows initiatives, especially since it can be demonstrated using simple Third Grade Math to be IMPOSSIBLE MATHEMATICALLY to Honor these Promises, which makes it FRAUD on it’s Face. Thereby leaving the mess to The People that created it to fix it on their own with their money not ours.


15 posted on 02/20/2012 9:35:49 AM PST by eyeamok
[ Post Reply | Private Reply | To 8 | View Replies]

To: Moonman62

What are the alternatives?

I’m assuming that we’re past the point of no return, so I only see default, austerity, and hyperinflation as possible outcomes.

Austerity won’t work because the bureaucracy won’t be cut, and tax hikes will drive the economy underground, resulting in a permanent depression.

Inflation would reduce everyone’s wealth, create a barter economy, and a lengthy depression.

Austerity punishes those who trusted the govt to pay its debts. And no one would lend us money again. It seems like the best option.


16 posted on 02/20/2012 9:45:07 AM PST by St_Thomas_Aquinas (Viva Christo Rey!)
[ Post Reply | Private Reply | To 12 | View Replies]

“Austerity “ should be “Default” in last paragraph.


17 posted on 02/20/2012 9:51:29 AM PST by St_Thomas_Aquinas (Viva Christo Rey!)
[ Post Reply | Private Reply | To 16 | View Replies]

To: St_Thomas_Aquinas

Won’t happen until the corrupt and greedy politicians and officials are finished raiding the till and stuffing their pockets.

As long as there is anything left to grab... no default. Then you’ll see.


18 posted on 02/20/2012 9:53:22 AM PST by SMARTY ("The man who has no inner-life is a slave to his surroundings. "Henri Frederic Amiel)
[ Post Reply | Private Reply | To 14 | View Replies]

To: SMARTY

I agree. I wish it would come sooner rather than later.

The only good part will be watching the media hand-wringing over the possibility of default.


19 posted on 02/20/2012 10:01:38 AM PST by St_Thomas_Aquinas (Viva Christo Rey!)
[ Post Reply | Private Reply | To 18 | View Replies]

To: Vigilanteman
As you might suppose, people who put in 15 hour work days producing this quality of craftsmanship, do not have any energy left to rape, study law, study Islam or riot. But I repeat myself.

.....and they have a work ethic and a trade skill upon their release.

20 posted on 02/20/2012 10:07:39 AM PST by IDontLikeToPayTaxes
[ Post Reply | Private Reply | To 6 | View Replies]

To: St_Thomas_Aquinas

We are waiting because we are still an honorable people. Most of of us would like to get our country’s fiscal affairs in order by cutting spending, downsizing government, and reducing taxes so as to spur growth. Hope springs eternal.

I am not an optimist on this matter because we are drunk on credit and will continue to borrow and spend until the world and our own countrymen cut us off. Once that happens there is zero chance that we take the necessary political steps to keep from defaulting.


21 posted on 02/20/2012 10:34:44 AM PST by FreedomNotSafety
[ Post Reply | Private Reply | To 14 | View Replies]

To: eyeamok

Great point! What you are saying is that the US is insolvent which means it does not have enough money to pay its debts and cannot reasonably assume that it will anytime soon.

It is illegal, not to mention immoral, to continue to incur new debts in a state of insolvency. If you or I did it on the scale that our government is doing it we would go to jail.

On the other hand there is a legal doctrine known as “constructive notice” which means even though you have not had legal notice you have received practical notice. You haven’t been told, but you know through simple observation and calculation, that the US is not good for it. In that case tuff shiite to the ones who keep fueling the fire and to those that are living in reliance on the promised welfare checks.


22 posted on 02/20/2012 10:44:01 AM PST by FreedomNotSafety
[ Post Reply | Private Reply | To 15 | View Replies]

FR Is Raising Money For New Servers


Click The Servers To Donate

23 posted on 02/20/2012 10:56:46 AM PST by DJ MacWoW (America! The wolves are here! What will you do?)
[ Post Reply | Private Reply | To 1 | View Replies]

To: St_Thomas_Aquinas

Politico has an article explaining why it is unconstitutional to default. The Constitution is one of enumerated powers and supposedly the government only has the powers granted to it. Default can be avoided but our government only has the power to tax, spend, and borrow. The constitution does not compel the repayment of debt. How could it? To do so would mean unlimited power to tax or even taxation by fiat. Not that we are not almost there anyway.

Exactly what is the worry about? We default once then thereafter we must live within our means.

Its a great gig. Spend or promise to spend despite an electorate that wont agree to be taxed enough to cover it. Then cover the shortfall by borrowing. Then claim the borrowing is sacred debt and must be honored by raising the aforementioned taxes.

The government can spend and make all the promises it cares to make but We The People must consent to taxation. If we don’t consent enough then default is the logical outcome.

It is no different then when a company promises a pension but doesn’t put aside the money to pay for it. Unless the money is there years later there will be no pension. The only prudent course is to insistent on upfront funding (unless of course you are the UAW in which case you can force someone else to pay).


24 posted on 02/20/2012 11:09:14 AM PST by FreedomNotSafety
[ Post Reply | Private Reply | To 14 | View Replies]

To: FreedomNotSafety

-—The government can spend and make all the promises it cares to make but We The People must consent to taxation. If we don’t consent enough then default is the logical outcome.-—

I’m guessing that this is the trade secret, or inside joke, among our legislators. All of this sturm and drang could be theatrics, AFAWK.

At bottom, we reboot, and start again.

The Alinskyites would like to use the default boogeyman to stampede us into collectivism. That’s a legitimate concern.


25 posted on 02/20/2012 11:34:34 AM PST by St_Thomas_Aquinas (Viva Christo Rey!)
[ Post Reply | Private Reply | To 24 | View Replies]

To: Opinionated Blowhard

From what I remember your critique of Iceland is only half-right.

The “right” part is that yes Iceland is a small country, and it can be affected by big swings in global markets.

But I thought the banking issues in Iceland came not from domestic borrowers and excessive domestic lending, but that too many of Iceland’s bankers believed too much in what the bigger global bankers thought about America’s derivatives and CDOs derived from America’s vast supply of subprime mortgages, and like Lehman Bros., they were overexposed in those instruments when the crisis of 2006 hit.

Am I wrong?

If I am not wrong, and the goverenment had to bail out anyone, they did it the only way a government should - they bailed out the gpovernment insured depositors, and no one else.

We have done the opposite.

Under the Dodd-Frank legislation the government has now guaranteed the investors in bank stocks that next time Federal agencies will not have to go hat-in-hand to Congress to ask for bail out money, the “too-big-to-fail” banks will be bailed out even if automatic new federal borrowing is required to do it. So, are our big banks taking less complex and less risky risks today? No; they are all protected now so why should they NOT behave less prudent.


26 posted on 02/20/2012 11:40:16 AM PST by Wuli
[ Post Reply | Private Reply | To 9 | View Replies]

To: St_Thomas_Aquinas

They will try. Debt = Enslavement. Have you noticed that left kills anything that allows you to earn wealth while encouraging and even subsidizing indebtedness?

That’s why the left is the most vociferous about default. Look at Greece who is 100% opposed to default/ The left because the know it means no more borrowing to fund their agenda.

I wont start on Jefferson’s views on debt.


27 posted on 02/20/2012 11:49:05 AM PST by FreedomNotSafety
[ Post Reply | Private Reply | To 25 | View Replies]

To: FreedomNotSafety

——Have you noticed that left kills anything that allows you to earn wealth while encouraging and even subsidizing indebtedness?-—

I never connected the two. Deductions for mortgages and credit card debt... Tax on income... I’m with you.

——That’s why the left is the most vociferous about default. Look at Greece who is 100% opposed to default/ The left because the know it means no more borrowing to fund their agenda.-——

That I get, as well as the lenders’ opposition. That’s why I prefer the default option: balanced budgets as far as the eye can see.


28 posted on 02/20/2012 12:00:31 PM PST by St_Thomas_Aquinas (Viva Christo Rey!)
[ Post Reply | Private Reply | To 27 | View Replies]

To: FreedomNotSafety

Learning to type as slow as i think...

Look at Greece. Who is 100% opposed to default? The left is opposed because they know it means no more borrowing to fund their agenda.


29 posted on 02/20/2012 12:03:13 PM PST by FreedomNotSafety
[ Post Reply | Private Reply | To 27 | View Replies]

To: St_Thomas_Aquinas

My econ prof was pure Keynes but he did drill this into my head: “If you subsidize something you will get more of it, if you tax something you get less of it.”

Everyone is after me so pardon my paranoia but I now believe the left is pulling a bait and switch on debt. Very soon they will quit forgiving and forgetting and insist everyone pay up. Of course if you are a correct thinking comrade they may let you work the debt off at a nice sustainable farm.


30 posted on 02/20/2012 12:17:06 PM PST by FreedomNotSafety
[ Post Reply | Private Reply | To 28 | View Replies]

To: FreedomNotSafety

I would also like to remind everyone that on August 15, 1971 President Richard Nixon formally recognized that the United States was Officially Bankrupt, that was the ONLY REASON for Closing the Gold Window and going to a 100% fiat currency. At the time we were at 10% Gold Reserves for our Paper Credits. We did not have the Gold and Silver to pay the Brits, we were on that day OFFICIALLY BANKRUPT and still are. During this receivership we have added Trillions in Debt while simultaneously STEALING the Wealth from every person through Direct Counterfeiting that some people call Inflation.


31 posted on 02/21/2012 5:34:02 AM PST by eyeamok
[ Post Reply | Private Reply | To 22 | View Replies]

To: Opinionated Blowhard
I understand your feelings, and in a perfect world, I agree, but after the raping and robbing of our treasury with the stimulus and bank bailout, we are now hopelessly in debt.

We need a year of Jubilee.

You shall sanctify the 50th year and proclaim freedom throughout the land for all its inhabitants;

We need a reset. Maybe, a new dollar. I am frustrated that so much of our future was stolen by crooked politicians and their cronies. I am sick of it.

32 posted on 02/21/2012 7:49:58 AM PST by FreeAtlanta (Liberty and Justice for ALL)
[ Post Reply | Private Reply | To 10 | View Replies]

Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.

Free Republic
Browse · Search
Bloggers & Personal
Topics · Post Article

FreeRepublic, LLC, PO BOX 9771, FRESNO, CA 93794
FreeRepublic.com is powered by software copyright 2000-2008 John Robinson