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#2This post is the beginning of an excellent article - but it stops at the point where it gets started. Lots of context, lots of information on reforms and changes, then... no more information! Which is kind of the point, but it leaves me wanting more.
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#3Beware: This article is filled with factual errors. I was making a list as I went along, and when I afterwards read the comments section I realized I had overlooked many more. That does not by itself affect the validity of the author's overarching thesis, but if someone can't be bothered to get their basic facts straight (e.g. Iceland's EU membership status), it casts serious doubt on their ability to perform the much more subtle and exacting task of sociopolitical analysis on the reader's behalf.
The article did raise several points about which I was previously unaware; I will pursue them through other sources. I'm unsurprised that the IMF pushed back against the plan to default on the loans. The IMF usually props up failing economies and forces legislation that lets foreign investors reduce or withdraw their local investments. Love it or hate it (and I incline towards the latter), putting your balls in the vice like that is standard operating practice for them--it's what they do. I was surprised to learn (and until it is confirmed elsewhere, I remain skeptical) that the UK and Holland threatened to freeze the funds of all Icelander-held bank accounts.
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#4Beware: This article is filled with factual errors. I was making a list as I went along, and when I afterwards read the comments section I realized I had overlooked many more. That does not by itself affect the validity of the author's overarching thesis, but if someone can't be bothered to get their basic facts straight (e.g. Iceland's EU membership status), it casts serious doubt on their ability to perform the muc…
"To clarify the EU point; Iceland is an EU Candidate country along with Croatia, Former Yugoslav Republic of Macedonia, Montenegro and Turkey."
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#5This post is the beginning of an excellent article - but it stops at the point where it gets started. Lots of context, lots of information on reforms and changes, then... no more information! Which is kind of the point, but it leaves me wanting more.
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#6Beware: This article is filled with factual errors. I was making a list as I went along, and when I afterwards read the comments section I realized I had overlooked many more. That does not by itself affect the validity of the author's overarching thesis, but if someone can't be bothered to get their basic facts straight (e.g. Iceland's EU membership status), it casts serious doubt on their ability to perform the muc…
"To clarify the EU point; Iceland is an EU Candidate country along with Croatia, Former Yugoslav Republic of Macedonia, Montenegro and Turkey."
Is that the author's own clarification? That lessens my confidence in him. Yes, it is a EU candidate country, but its formal ties to the EU (EEA, Schengen, etc) have been much closer and longer-lasting than those of any other candidate country. Listing Iceland in that group gives the wrong impression.
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#7Beware: This article is filled with factual errors. I was making a list as I went along, and when I afterwards read the comments section I realized I had overlooked many more. That does not by itself affect the validity of the author's overarching thesis, but if someone can't be bothered to get their basic facts straight (e.g. Iceland's EU membership status), it casts serious doubt on their ability to perform the muc…
This is a naive question but why did Icelandic banks allow such a bubble to happen? I realize it's not easy to see the forest from the trees, but isn't there some point at which banks start to see that they are taking on too much debt?
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#8Beware: This article is filled with factual errors. I was making a list as I went along, and when I afterwards read the comments section I realized I had overlooked many more. That does not by itself affect the validity of the author's overarching thesis, but if someone can't be bothered to get their basic facts straight (e.g. Iceland's EU membership status), it casts serious doubt on their ability to perform the muc…
This is a naive question but why did Icelandic banks allow such a bubble to happen? I realize it's not easy to see the forest from the trees, but isn't there some point at which banks start to see that they are taking on too much debt?
They got greedy and invested into the real estate bubble.
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#9200 times GNP? Unlikely. Jared Diamond's book by the same name? That's not very specific if you don't know the name of the book. Is it "Iceland’s ninth century agrarian collapse?" Also she uses million where she probably meant billion (the author is American and she addresses Americans, so American millions should be what she's using). Otherwise, if her facts are correct then it is a very interesting case. I'm particularly curious about the specifics of how they decided on the constitutional drafters.
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#10Beware: This article is filled with factual errors. I was making a list as I went along, and when I afterwards read the comments section I realized I had overlooked many more. That does not by itself affect the validity of the author's overarching thesis, but if someone can't be bothered to get their basic facts straight (e.g. Iceland's EU membership status), it casts serious doubt on their ability to perform the muc…
This is a naive question but why did Icelandic banks allow such a bubble to happen? I realize it's not easy to see the forest from the trees, but isn't there some point at which banks start to see that they are taking on too much debt?
I'm totally not qualified to talk about this, but since I'm just writing an off-the-cuff comment on a website, I can at least give you my impression. Don't take my word for it, I'm probably full of shit.
Keep in mind that the debt here means that depositors gave them money in the usual bank arrangement. When you deposit money with your bank, they don't let the money sit in a physical vault or the digital equivalent. They put as much of it as possible to work. The Icelandic banks had used the money to make diversified investments across Europe. I'm from Denmark, and in this period there were several noteworthy Icelandic investments in major Danish companies, and that was the pattern all over northern Europe. It was a far more responsible and effective investment strategy than what was generally followed by the Irish banks, who injected the bulk of their investment funds back into the Irish economy, especially in the real estate market, thereby artificially inflating and extending the Irish bubble.
> I realize it's not easy to see the forest from the trees, but isn't there some point at which banks start to see that they are taking on too much debt?
They could have hedged against overall market drops much better than they did. They put too much into real estate. Etc. But when there is a rapid and systematic dive in confidence and all your major depositors make a simultaneous run on the bank, you are pretty much screwed. They'd have needed to bet a sizable chunk of their funds against the market as a whole to cover that eventuality. But if everyone had done that, things would quickly have gone nonlinear, so it's unclear at least to me what they should have done, given their mandate to invest the money on hand.
The root mistake was probably taking on too many easy-come, easy-go customers who'd want to make a quick escape in the event of a down-turn.