Should Icesave Ever Have Been Recommended?
1mmortal1s
Posts: 3 Newbie
Calling all Icesavers!
I invested £8000 in a fixed rate Icesave account about a month ago, on the recommendation of this site. I'd never heard of Icesavebefore, so I carefully read the April 1st blog (which to Martin's credit is still posted on the site) before deciding to put my money there.
I agree that Martin could never have predicted what banks might go bust. However I do feel that it was negligent, in analysing the passport protection scheme, and (on my reading) implying that it was as safe as the UK FSCS scheme apart from perhaps being bureaucratically more difficult to use, not to point out the way in which Iceland's economy was completely dwarfed by its banking sector.
It has now become clear that total foreign deposits in Iceland's largest banks are as big as, or larger than, its entire GDP. This means that the difficulty it would have in compensating foreign investors if these giant banks went bust (as it looks as though Landsbanki will) is far greater than the difficulty the British government, with money available on a different order of magnitude, ever would in similar circumstances.
Because nothing was said about this in the April 1st blog summarising Martin's position, I do not feel that sufficient information was provided to enable an informed decision on the safety of an investment in Icesave. A money saving expert worth his salt should have known that the size of the nation's banking sector relative to its economy, and the amount of foreign capital invested in it relative to GDP, were vital elements in evaluating the safety of foreign investors' funds, and of the ability of that government's compensation scheme to pay out should it be needed.
Of course, I should have gone and found out that information for myself, so I am well aware that I have only myself to blame for having my money tied up in what is about to be a failed bank.
But on this experience, I regret to say that I won't ever be taking any recommendations from this site again in the future, because I can't be sure that any advice that is posted has been properly researched with an eye on _all_ the economic fundamentals that matter.
Thanks for reading - would love to hear the views of other Icesavers on this.
(And to cite a disclaimer like 'this site does not provide financial advice' is ridiculous: if you style yourself as an expert, people are going to come to you for advice - why else do they visit this website?)
I invested £8000 in a fixed rate Icesave account about a month ago, on the recommendation of this site. I'd never heard of Icesavebefore, so I carefully read the April 1st blog (which to Martin's credit is still posted on the site) before deciding to put my money there.
I agree that Martin could never have predicted what banks might go bust. However I do feel that it was negligent, in analysing the passport protection scheme, and (on my reading) implying that it was as safe as the UK FSCS scheme apart from perhaps being bureaucratically more difficult to use, not to point out the way in which Iceland's economy was completely dwarfed by its banking sector.
It has now become clear that total foreign deposits in Iceland's largest banks are as big as, or larger than, its entire GDP. This means that the difficulty it would have in compensating foreign investors if these giant banks went bust (as it looks as though Landsbanki will) is far greater than the difficulty the British government, with money available on a different order of magnitude, ever would in similar circumstances.
Because nothing was said about this in the April 1st blog summarising Martin's position, I do not feel that sufficient information was provided to enable an informed decision on the safety of an investment in Icesave. A money saving expert worth his salt should have known that the size of the nation's banking sector relative to its economy, and the amount of foreign capital invested in it relative to GDP, were vital elements in evaluating the safety of foreign investors' funds, and of the ability of that government's compensation scheme to pay out should it be needed.
Of course, I should have gone and found out that information for myself, so I am well aware that I have only myself to blame for having my money tied up in what is about to be a failed bank.
But on this experience, I regret to say that I won't ever be taking any recommendations from this site again in the future, because I can't be sure that any advice that is posted has been properly researched with an eye on _all_ the economic fundamentals that matter.
Thanks for reading - would love to hear the views of other Icesavers on this.
(And to cite a disclaimer like 'this site does not provide financial advice' is ridiculous: if you style yourself as an expert, people are going to come to you for advice - why else do they visit this website?)
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Comments
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I have gained loads from the kind and informed people on this forum, I now know for example what credit default swaps are. I noticed that Landesbank CDS had jumped into the mid high 900's recently so I moved most of my cash out of Icesave (still a little in there). The great thing about this site is empowerment be it cutting debts, saving or investment.
http://www.moneyweek.com/personal-finance/credit-default-swaps-how-to-spot-the-riskiest-banks.aspx'Just think for a moment what a prospect that is. A single market without barriers visible or invisible giving you direct and unhindered access to the purchasing power of over 300 million of the worlds wealthiest and most prosperous people' Margaret Thatcher0 -
I think they should have been recommended, but it should have been easier to determine that their compensation scheme, was a sham.0
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1mmortal1s wrote: »Calling all Icesavers!
I invested £8000 in a fixed rate Icesave account about a month ago, on the recommendation of this site. I'd never heard of Icesavebefore, so I carefully read the April 1st blog (which to Martin's credit is still posted on the site) before deciding to put my money there.
I agree that Martin could never have predicted what banks might go bust. However I do feel that it was negligent, in analysing the passport protection scheme, and (on my reading) implying that it was as safe as the UK FSCS scheme apart from perhaps being bureaucratically more difficult to use, not to point out the way in which Iceland's economy was completely dwarfed by its banking sector.
It has now become clear that total foreign deposits in Iceland's largest banks are as big as, or larger than, its entire GDP. This means that the difficulty it would have in compensating foreign investors if these giant banks went bust (as it looks as though Landsbanki will) is far greater than the difficulty the British government, with money available on a different order of magnitude, ever would in similar circumstances.
Because nothing was said about this in the April 1st blog summarising Martin's position, I do not feel that sufficient information was provided to enable an informed decision on the safety of an investment in Icesave. A money saving expert worth his salt should have known that the size of the nation's banking sector relative to its economy, and the amount of foreign capital invested in it relative to GDP, were vital elements in evaluating the safety of foreign investors' funds, and of the ability of that government's compensation scheme to pay out should it be needed.
Of course, I should have gone and found out that information for myself, so I am well aware that I have only myself to blame for having my money tied up in what is about to be a failed bank.
But on this experience, I regret to say that I won't ever be taking any recommendations from this site again in the future, because I can't be sure that any advice that is posted has been properly researched with an eye on _all_ the economic fundamentals that matter.
Thanks for reading - would love to hear the views of other Icesavers on this.
(And to cite a disclaimer like 'this site does not provide financial advice' is ridiculous: if you style yourself as an expert, people are going to come to you for advice - why else do they visit this website?)
IMHO, reading your thread.. What Martin and the website promoted was in fact the rate of Interest on your Capital. Not whether Icesave would outdo a Credit Crunch, nor look into the future
It is up to Individuals which bank, or which rates they choose!. IMHO Management of this site are not responsible?0 -
I am a regular reader of Martin and I have NEVER read a recommendation for a bank.
I have read lists of interest rates on various bank accounts. I have seen 'best buy' - meaning it was the highest payer.
I have read that the first place to put your money is an ISA.
I have read the way in which money in banks is protected - for how much - and I have read what Martin has said about spreading your money so it is all protected.
I am going to say that as I understood it Martin gave the highest paying accounts in a list - he also gave who was protected and how - and he has always said to take care that you kept within the protection limits.
Like everything - all that glitters is not gold. If I buy the cheapest it is not always going to be the best and to go for the highest return is not always going to be the most secure.
The idea that our money may not be safe in a bank is a new one. It takes some getting used to. Anyone who has gone in too deep has - hopefully - learned their lesson.
I am very glad that no-one is going to lose money. I am very sad that some people are not taking responsibility for their actions and are seeking to blame Martin.
I did my research and as a result of what I discovered I kept out of Iceland. That information was there for everyone with the internet.
So 1mmortal1s, you must take responsibility for not reading all the information and taking it on board. I certainly decided not to touch Icesave with a bargepole - because it was not wholly protected by the UK system. I decided against KE because I did a very superficial search and found indicators that all was not well in Iceland. I did start a thread on here to say I was concerned by the viability of Icelandic banks and got a pasting.
If you want financial advice that is 100% - you will never find it. You can pay for the services of a financial advisor - but I bet you don't. You are looking for someone to blame - I suggest you look in the mirror. You made the decision to go outside of the British protection scheme - no-one else!0 -
moanymoany wrote: »If you want financial advice that is 100% - you will never find it. You can pay for the services of a financial advisor - but I bet you don't. You are looking for someone to blame - I suggest you look in the mirror. You made the decision to go outside of the British protection scheme - no-one else!
Well put. I'm sick and tired of these "all my problems are someone else's fault" whiners.
Dave.... DaveHappily retired and enjoying my 14th year of leisureI am cleverly disguised as a responsible adult.Bring me sunshine in your smile0 -
I won't ever be taking any recommendations from this site again in the future
And I too shall be cutting my nose off to spite my face. I shall ignore the credit card cashback deals that have netted me a couple of hundred pounds, I shall poo-poo the idea of fixing my utility costs, I shall ignore discounts available to me, and I shall purposefully not use the helpful links to the insurance comparison sites that have saved me hundreds.
The fact is I might have to wait a couple of months to get my ISA's cash back, but all I have lost is a bit of interest and I can live with that. I will be staying with MSE.0
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