Note the "O" hand signal!
Posted on 10/10/2008 12:18:22 PM PDT by george76
People go bankrupt all the time. Companies do, too. But countries?
Iceland was on the verge of doing exactly that on Thursday as the government shut down the stock market and seized control of its last major independent bank. That brought trading in the country's currency to a halt, with foreign banks no longer willing to take Icelandic krona, even at fire-sale rates.
As the meltdown in the Icelandic financial system quickened, with the government seemingly powerless to do anything about it, analysts said there was probably only one realistic option left: for Iceland to be bailed out by the International Monetary Fund.
"Iceland is bankrupt," said Arsaell Valfells, a professor at the University of Iceland. "The Icelandic krona is history. The IMF has to come and rescue us."
Iceland has approached Russia about a loan of €4 billion, or $5.5 billion, to help see it through the crisis, but Haarde said no agreement had been reached.
(Excerpt) Read more at iht.com ...
Anyhoo, I thought that it was funny that $5 Billion would keep an entire country afloat, when we're burning 10 or 20 times that here, just to keep a business going.
I guess that it's all in the perspective.
The best way of seeing Iceland is as a country that turned itself into a giant hedge fund.
For years it paid higher interest rates than in many parts of the world, so its financial institutions borrowed a ton of hot money from abroad, which they then re-cycled into investments all over northern Europe, including the UK.
The Icelandic banking boom was an economic phenomenon created by what’s known as the carry trade - whereby colossal sums of money were borrowed in places like Japan, where interest rates were effectively zero, for lending to institutions in high-interest-paying economies, such as Iceland.
This, for years, seemed to be a no-lose arbitrage on differential interest rates in a globalised economy.
But it was just another manifestation of the pumping up of the credit bubble, which is now deflating
http://www.bbc.co.uk/blogs/thereporters/robertpeston/2008/10/creditors_call_time_on_iceland.html
Note the "O" hand signal!
Damn right they are.
Maybe you and I can pick up some Icelandic babes on the cheap.
Kool-Aid drinker swaying in a hammock on a tropical island on the taxpayer dime??
the value of its economic output, its GDP, is about $20bn; but its big banks have borrowed some $120bn in foreign currencies.
Now that’s what I call leverage - and remember that’s just the overseas liabilities of its commercial banks.
If this were a business, and if it had no other borrowings (which of course Iceland does have), this would be a debt-to-ebitda ratio of 6.
Beautiful blonde women - they could sell the eggs and solve our fertility crisis and their financial crisis.
But a loan from Russia? That’s pretty desperate.
What? You mean Socialism didn’t work? Perhaps we need to send them several million of our current crop of College Students and Professors. They will see them straight on how it should be done, fer sher.....
51st State!
And to think, Palin ran a state that is about 10x+ the size of Iceland and twice the population and they think she is unqualified?
and reindeer (no kidding)
They must be Bjorn again!..................Welcome back from the dead, Laz!.........
58th state!...........
How would an IMF bailout proposal be received by the Icelandic government or the populace?
Hey! If you're going, don't forget to ping me!
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Miss Iceland 2007 Johanna Vala
My goodness. Nice eye candy.
Just last year I was considering a 14% Icelandic CD.
I knew there was a catch!
“How much for your wife, and your daughter? Sell them to me”
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