Iceland

jp01_2

ianmr65 wrote: »

From todays lex in the FT...

Is Iceland really a worse bet than Kazakhstan or Lebanon? Debt markets think so.
This week’s government rescue of Glitnir, the weakest of the country’s big three banks, has got “house of cards” theorists salivating. Spreads on the credit default swaps of Kaupthing and Landsbanki have widened by almost half, as sovereign spreads have soared. The state bail-out has been deemed worse than useless – the cost of protecting Glitnir’s debt on Wednesday jumped more than 300 basis points to 1,800bp.

The witch-hunt is sustained by a sense of injustice that these upstarts got so big in the first place – combined assets of the top three are about nine times Iceland’s gross domestic product. Having twiddled its thumbs for months, the central bank of Iceland is now taking action.
The decision to seize Glitnir rather than help it out by relaxing repo rules (as in Denmark and the UK) or backstopping liabilities (Ireland), was an admission – at last – that this tiny nation is simply over-banked.

The remaining institutions are huddling together: on Wednesday, Landsbanki sold most of its overseas corporate finance business to Straumur, the country’s number four bank. Bank executives have long complained that CDS prices are a sideshow. In the long run, they may be right.
On paper, Icelandic banks are some of the most solvent in the world: they all have liquid assets sufficient to cover debt maturing over at least a rolling 12-month period. But current markets are more interested in their ability to roll over interbank and money market lines, at a time when every analyst is telling clients to steer clear of anything but the big insurers and the even bigger banks.

Kaupthing and Landsbanki have not done much wrong in the past 12 months. They have secured equity transfusions where they can and built up their deposit bases. Asset growth has virtually ground to a halt, while existing loans have not yet significantly deteriorated. Investors ought to recognise that Icelandic banks have done much to atone for their excesses.

AND YOUR EVIDENCE TO BACK UP ''ICELANDIC BANKS ARE ON PAPER THE MOST SOLVENT IN THE WORLD''??

Here is mine to the ABSOLUTE CONTRARY.
These banks are now seen as the most unsafe in the developed world.

http://www.thisismoney.co.uk/investing-and-markets/article.html?in_article_id=433257&in_page_id=3

Only today ICESAVE has been forced to restructure.
http://www.telegraph.co.uk/finance/financetopics/financialcrisis/3117869/Financial-Crisis-Icelandic-banks-in-latest-restructuring.html

Only today there's this

http://www.marketwatch.com/news/story/financial-avalanche-hits-iceland-amid/story.aspx?guid=E3664C74-C084-4EEB-AE58-7541E5449530&dist=SecMostMailed
The credit default swap spreads for Icelandic banks have soared. A wider CDS spread means that yields on riskier debt rose sharply, while those of safe government bonds fell.



Iceland is IN a MAJOR CRISIS. Massive debts, massive interest rates trying to prop up a currency in free fall, MASSIVE RECESSION , INFLATION AT 12%
It has been said that Icelands banks are the trigger to a total collapse of the economy. The first one has already fallen.

With Govt bonds falling, there's no money to protect your savings.

Anyone no bailing from Icesave is VERY VERY foolish.

Anyone with money still in Icesave is VERY VERY Foolish.

fusionblue

You haven't stated why it is foolish for you. That is more important. What stated fact (without presenting market data that will change in time) makes it foolish for you to not decide to use an Icelandic bank?

Instead of worrying people, i propose we set up the Scaremongering Banking Society. It will specialise in savings for those who wish to buy tanks of oxygen. It is a precious commodity and all. Lets capitalise!

isofa

An inflammatory poster returns - jp01 - 3 of his last spam/sacremongering threads were removed by admin - sadly he didn't get the message.

Iceland is in no more crisis than the UK, US or many other countries, stop posting this scaremongering rubbish.

fusionblue

isofa wrote: »

An inflammatory poster returns - jp01 - 3 of his last spam/sacremongering threads were removed by admin - sadly he didn't get the message.

Iceland is in no more crisis than the UK, US or many other countries, stop posting this scaremongering rubbish.

But what about my idea to buy air? We will be RICH! :rotfl:

LucyTheDwarf

edwinac wrote: »

The FSCS just admitted they have no cash to give out! In the case of the B&B, the Government had to lend the FSCS the money to give to the depositors. That's okay until next time, but what then?

"The FSCS doesn’t keep a pot of cash sitting ready and waiting. Instead, it has the power to operate a 'compulsory levy' on banks, insurers and others signed up to the scheme, as and when it needs the money. The advantage of this is it can pull cash from more than just the affected sector (i.e. if an insurer went down, while other insurers must contribute first, above a set level banks would be asked too) so funds should be available."
Taken from http://www.moneysavingexpert.com/savings/safe-savings

My point being that the FSCS have not "just admitted" that they don't have the cash - that is not the point of the FSCS! They have the power to levy the money from banks and other financial institutions, if they need it. The compensation scheme is not necessary for the depositors in B&B - that part has been sold on to Santander, so why would anyone need to make a claim via the FSCS?

Mr_Mumble wrote: »

They can just print it if needbe.

In response to edwinac, you suggest they just print money? It would be worthless, because of the hyperinflation this would cause. Like someone said on an earlier post, your £35,000 compensation might just buy you two loafs of bread if you're lucky. Printing money is just paper, it has to be backed up by somethign tangible.

isofa

I love the idea of just printing some more money to get us out of this mess - absolutely hilarious - I'd enjoy paying a billion for a loaf in Waitrose!

LucyTheDwarf

It'd be nice to buy shoes with huge wedges of banknotes.... :rotfl:

isofa

LucyTheDwarf wrote: »

It'd be nice to buy shoes with huge wedges of banknotes.... :rotfl:

Satisfying, or will it make the heel taller?! :beer:

jack111

isofa wrote: »

An inflammatory poster returns - jp01 - 3 of his last spam/sacremongering threads were removed by admin - sadly he didn't get the message.
Iceland is in no more crisis than the UK, US or many other countries, stop posting this scaremongering rubbish.

I would not delete this chaps post. All he has done is present factual data and taken a position. He is entitled to his opinion. All of us are.
Anybody who googles icelandic banks will get most of these links anyway.
I have large savings in both KE and icesave and already had read these articles . My savings are staying put.

edwinac_2

isofa wrote: »

An inflammatory poster returns - jp01 - 3 of his last spam/sacremongering threads were removed by admin - sadly he didn't get the message.

I think you are being unreasonable.. You don't like the content of his messages, so you want him silenced..

That's not cricket!

What he posts isn't spam, and whether he is "scaremongering" or not is a subjective call.

He has supported his claims by linking to articles from three well known media organs - the Daily Mail, the Telegraph and Marketwatch...

Iceland is in no more crisis than the UK, US or many other countries, stop posting this scaremongering rubbish.

Your opinions are equally subjective, but unlike "jp-01", you offer no corroboration to support them!