Iceland Krone Meltdown.

Meltdown_2

ManAtHome wrote: »

Equatorial Guinea was a surprise.

Oil wealth - like a few other countries near the top - but like them, it is not shared out very equally (unlike Iceland).

amcluesent

Iceland shows cracks as the krona crashes

"Iceland is being treated like one big toxic hedge fund. Nobody wants anything to do with it."

I think I'll need a MUCH bigger risk premium for my savings than is offered by the Iceland banks...

Lavendyr

amcluesent wrote: »

Iceland shows cracks as the krona crashes

That story was already linked to earlier in this thread.

amcluesent wrote: »

"Iceland is being treated like one big toxic hedge fund. Nobody wants anything to do with it."

Said, and I quote from the article, "one commentator".

amcluesent wrote: »

I think I'll need a MUCH bigger risk premium for my savings than is offered by the Iceland banks...

Again, look at the facts. Yes, the krone is doing badly, but the biggest Icelandic banks have nearly half their operations OUTSIDE Iceland. They are rated as long-term stable by Moody's and Fitch. They have higher ratings than many other foreign banks operating in the UK, including ICICI. Of all the banks exposed to the credit crunch, Icelandic banks are likely to be far less affected by it owing to their high percentage of deposits held to loans offered. CDS swap rates are hardly relevant when a) the banks don't have to borrow all that much in the first place and b) the banks are clearly able to secure funds at lower rates than the CDS swaps suggest (see earlier referenced article from the FT - which I would suggest as being a slightly more credible source than the Telegraph).

ianmr65

amcluesent wrote: »

Iceland shows cracks as the krona crashes

"Iceland is being treated like one big toxic hedge fund. Nobody wants anything to do with it."

I think I'll need a MUCH bigger risk premium for my savings than is offered by the Iceland banks...

I've reported the Telegraph to the Press Compaints Commission over this article. I recon that the second quoted guy, a forex trader might have had something to gain.

The first quote above is a a re-hash of something that was said in the FT, which itself was lifted from an article on bloomberg.

Like chinese whispers, the original bloomberg quote was nothing like as stupid.

Killahertz

I'm at the bottom of a steep learning curve with regard to savings, investments, and banking in general. Yet, even I can see the holes in the Telegraph (and similar) articles.

amcluesent wrote: »

I think I'll need a MUCH bigger risk premium for my savings than is offered by the British banks...

Is, I believe, far more accurate

amcluesent

>Is, I believe, far more accurate<

Yep, I'm loaning money on Zopa at 8%+,

ianmr65

amcluesent wrote: »

>Is, I believe, far more accurate<

Yep, I'm loaning money on Zopa at 8%+,

Yes Zopa's very good for savers. not for borrowers tho. I'm a1+ credit, and the rate they quoted was not as good as i could get from trad banks, that was some time ago tho.

Killahertz

amcluesent wrote: »

ep, I'm loaning money on Zopa at 8%+

Intriguing. Like I said, i'm at the bottom of a steep learning curve, such that i'd never heard of Zopa, or knew that such services existed. If 8%+ is a possibility then it has to merit further investigation.

This site is an absolute mine of information. I thought i'd scratched the surface. Seems not. Thank you for raising the Zopa option.

chesky369

"the second quoted guy, a forex trader might have had something to gain."

absolutely - a fine example of 'trash 'n cash'

Mr_Mumble

FT Alphaville on the interest rate hike:

Emergency action for Iceland’s banks?

"Quite a few eyes on the Icelandic krona as the central bank in Reykjavik hiked interest rates from 13.75 per cent to 15 per cent, halting the fall of the krona against the Euro in its tracks. The stated intention is to tame inflation, which recently hit 6.8 per cent."

"Icelandic banks are being excused the need to provide at home for any excesses abroad - and there are some that would argue that those excesses have been extreme in recent years."