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So wrong it's right, so right it's wrong - click opera
February 2010
 
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Sat, Oct. 11th, 2008 03:22 am
So wrong it's right, so right it's wrong

23CommentReply


(Anonymous)
Sat, Oct. 11th, 2008 04:58 pm (UTC)
Re: HELP!!!!!!!!!!!!!!!!!!!!!!!

............Those free market reforms turned Iceland from a conservative, inward-looking country to one of a new generation of internationally educated young businessmen and women who were determined to give Iceland a modern profile far beyond its fishing base.

Entrepreneurs become its greatest export, as banks and companies marched across Europe and their acquisition wallets were filled by a stock market boom and a well-funded pension system. Among the purchases were the iconic Hamley's toy store and the West Ham soccer team.

Back home, the average family's wealth soared 45 percent in half a decade and gross domestic product rose at around 5 percent a year.

But the whole system was built on a shaky foundation of foreign debt.

The country's top four banks now hold foreign liabilities in excess of $100 billion, debts that dwarf Iceland's gross domestic product of $14 billion.

Those external liabilities mean the private sector has had great difficulty financing its debts, such as the more than $5.25 billion racked up by Kaupthing in five years to help fund British deals.

Iceland is unique "because the sheer size of its financial sector puts it in a vulnerable situation, and its currency has always been seen as a high risk and high yield," said Venla Sipila, a senior economist at Global Insight in London.

The krona is suffering in part from a withdrawal by a falloff in what are called carry trades — where investors borrow cheaply in a country with low rates, such as Japan, and invest in a country where returns, and often risks, are higher.

After watching the free-fall for several days, the Central Bank of Iceland stepped in Tuesday to fix the exchange rate of the currency at 175 — a level equal to 131 krona against the euro.

Haarde said he believed the measures had renewed confidence in the system. He also was critical of the lack of an Europe-wide response to the crisis, saying Iceland had been forced to adopt an "every-country-for-itself" mentality.

He acknowledged that Iceland's financial reputation was likely to suffer from both the crisis and the response despite strong fundamentals such as the fishing industry and clean and renewable energy resources.

As regular Icelanders begin to blame the government and market regulators, Haarde said the banks had been "victims of external circumstances."

Richard Portes of the London Business School agreed, noting the banks were well-capitalized and had not bought any of the toxic debt that has brought down banks elsewhere.

"I believe it is absolutely wrong to say these banks were reckless," said. "Quite the contrary. They were hugely unlucky."


ReplyThread Parent
imomus
imomus
imomus
Sat, Oct. 11th, 2008 05:34 pm (UTC)
Re: HELP!!!!!!!!!!!!!!!!!!!!!!!

If you can't make it relevant to Afropop, I'm afraid this crie de coeur is going to have to count as spam. I'm downgrading your triple A status to Baa, Anon.


ReplyThread Parent
akabe
akabe
alin huma
Sun, Oct. 12th, 2008 03:43 am (UTC)
Re: HELP!!!!!!!!!!!!!!!!!!!!!!!

don't dismiss anon's jump-cuts they're the brechtian element preventing the blog from becomming hollywood


ReplyThread Parent