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Thread: Finance: Iceland Court Sentences Ex-Byr Savings Executives to Jail

   
   
       
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    Finance: Iceland Court Sentences Ex-Byr Savings Executives to Jail

    Iceland Court Sentences Ex-Byr Savings Executives to Jail

    By Omar R. Valdimarsson - Jun 8, 2012 4:24 AM GMT+0800
    http://www.bloomberg.com/news/2012-0...s-to-jail.html



    Byr Savings Bank former Chairman Jon Thorsteinn Jonsson and the lender’s ex-Chief Executive Officer Ragnar Zophonias Gudjonsson were today found guilty of fraud and sentenced to four and half years in prison by Iceland’s Supreme Court.

    The court found that the two former executives had used their positions at Byr to grant an 800-million kronur ($6.2 million) loan to Exeter Holdings ehf in 2008 as Iceland’s financial system was on the brink of collapse.
    Proceeds of the loan were used by Exeter to buy Jonsson’s and Gudjonsson’s shares in Byr. Exeter guaranteed the loan by putting the Byr shares up as collateral.

    “In deciding the punishment” the Supreme Court took account of the fact that the “magnitude of the offences was significant,” according to the ruling posted on the Reykjavik-based court’s website. Jonsson’s action “relieved him from personal guarantees on loans” and Gudjonsson’s “infraction was committed under the auspices of his mandate” as Byr’s chief executive officer, according to the ruling.

    To contact the reporter on this story: Omar R. Valdimarsson in Reykjavik valdimarsson@bloomberg.net.
    To contact the editor responsible for this story: Jonas Bergman at jbergman@bloomberg.net.
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    Morale of the story: Don't listen to wolves on how to rebuild your house when it collapses. They were the ones who blew it down in the first place!



    Iceland economy grows at fastest pace in four years

    By Niklas Pollard

    STOCKHOLM | Fri Jun 8, 2012 10:54am EDT
    http://www.reuters.com/article/2012/...8570UA20120608

    STOCKHOLM (Reuters) - Iceland's economy expanded in the first quarter at its fastest pace since its near-meltdown, powered by a surge in exports, tourism and domestic consumption.

    Gross domestic product (GDP) grew 2.4 percent quarter-on-quarter in the first three months of the year to put annual economic growth at 4.5 percent in the period, the highest since the first quarter of 2008, data from the statistics office showed on Friday.

    "It shows that the economy is growing rather rapidly, at least in an international comparison, at the moment," Islandsbanki Chief Economist Ingolfur Bender said.

    "The increase is broad-based, driven by consumption, investment and exports."

    Growth for the fourth quarter of 2011 was 1.9 percent on the quarter and 2.7 percent on the year.

    The recovery has gathered momentum more quickly than expected after the small nation became a byword for the excesses of the liquidity boom which preceded the 2008 meltdown.

    Its bank sector grew to 10 times the size of output and then collapsed when credit markets froze after the bankruptcy of Lehman Brothers.

    Iceland successfully completed a bailout program led by the International Monetary Fund last year and has returned to bond markets. Forecasts for 2012 indicate GDP growth will be the strongest among developed countries, the central bank has said.

    While investments have begun to recover from lows reached after the bank collapse, the relative weakness of the Icelandic currency has lured tourists.

    Guest nights in Icelandic hotels by foreign tourists rose by 17 percent year-on-year in April. Islandsbanki said the number of tourists departing from the main airport hit a record in May, helping the economy of the country of only about 320,000 people.

    The data released on Friday showed exports and consumption grew 4.2 percent year-on-year in the first three months of the year while investment grew 9.3 percent, though from low levels.

    Iceland said last month it would offer overseas investors who have crowns they don't want another chance to sell their currency as the country seeks to remove the capital controls put in place during the 2008 crash.

    Reducing the overhang of foreign-held crowns in a controlled manner should make it easier to loosen capital restrictions in the long run and encourage investment in the country.

    (Reporting by Niklas Pollard, editing by Patrick Lannin, Adrian Croft)
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    Economics: Iceland survives crisis



    Iceland holds some key lessons for nations trying to survive bailouts after the island’s approach to its rescue led to a “surprisingly” strong recovery, the International Monetary Fund’s mission chief to the country said. Photographer: Arnaldur Halldorsson/Bloomberg


    Bloomberg News

    IMF Says Bailouts Iceland-Style Hold Lessons in Crisis Times


    By Omar R. Valdimarsson on August 13, 2012


    Iceland holds some key lessons for nations trying to survive bailouts after the island’s approach to its rescue led to a “surprisingly” strong recovery, the International Monetary Fund’s mission chief to the country said.

    Iceland’s commitment to its program, a decision to push losses on to bondholders instead of taxpayers and the safeguarding of a welfare system that shielded the unemployed from penury helped propel the nation from collapse toward recovery, according to the Washington-based fund.

    “Iceland has made significant achievements since the crisis,” Daria V. Zakharova, IMF mission chief to the island, said in an interview. “We have a very positive outlook on growth, especially for this year and next year because it appears to us that the growth is broad based.”

    Iceland refused to protect creditors in its banks, which failed in 2008 after their debts bloated to 10 times the size of the economy. The island’s subsequent decision to shield itself from a capital outflow by restricting currency movements allowed the government to ward off a speculative attack, cauterizing the economy’s hemorrhaging. That helped the authorities focus on supporting households and businesses.

    “The fact that Iceland managed to preserve the social welfare system in the face of a very sizeable fiscal consolidation is one of the major achievements under the program and of the Icelandic government,” Zakharova said. The program benefited from “strong implementation, reflecting ownership on the part of the authorities,” she said.

    Euro Aid

    As of March this year, the IMF had program arrangements with 11 European countries, representing about 65 percent of its funds, according to its website. Governments inside the euro zone have struggled to comply with the austerity terms prescribed in joint aid packages provided by the IMF and the European Union, leading to revised terms and extended deadlines for nations such as Greece.

    At the same time, bond markets have reflected a lack of confidence in recovery programs, sending debt yields higher and adding to pressure on government finances. Countries inside the euro area or with pegged currencies such as Latvia have relied on wage cuts and reduced welfare services as a means toward delivering on bailout goals.

    In Iceland, the krona’s 80 percent plunge against the euro offshore in 2008 helped turn a trade deficit into a surplus by the end of the same year. Unemployment, which jumped nine-fold between 2007 and 2010, eased to 4.8 percent in June from a peak of 9.3 percent two years ago.

    Impressive

    “Each program is different and responds to a different situation so one cannot compare them directly,” Zakharova said. “Of course, considering the depth of the crisis in late 2008, Iceland’s recovery has been impressive.”

    Iceland, which the IMF estimates was the world’s third- richest nation per capita in 2005 before slumping to rank 20th by 2010, ended its 33-month program in August last year. The $13 billion economy will expand 2.4 percent this year, the IMF said April 17. That compares with an estimated 0.3 percent contraction in the 17-member euro area.

    Iceland’s growth “is driven by private consumption, investment has picked up strongly and even though, when you look at net exports, those have a negative contribution to growth, it is mainly because imports have been strong, reflecting strong consumption and an increase in income and the healthy expectations of households,” Zakharova said. “Still, exports have been increasing very strongly. Last year was a banner year for tourism. These are all really positive things.”

    ‘Key Challenge’

    Iceland, which started EU membership talks in 2010 with euro-area membership an ultimate goal, is starting to question whether accession to the trade and currency bloc is the right way forward as the region’s debt crisis deepens. Thirty-nine of the Reykjavik-based parliament’s 63 lawmakers oppose continuing EU membership talks and may push to have the process shelved before elections next year, newspaper Morgunbladid said today.

    The island still needs to show it can unwind its capital controls successfully, Zakharova said. About $8 billion in offshore kronur are locked behind the restrictions. The central bank has said the plan to ease controls is likely to be completed by the end of 2015. The law allowing the government to maintain the controls expires next year, requiring a parliamentary extension. Former Economy Minister Arni Pall Arnason said in a September interview that Iceland has no plans to return to a free floating currency before entering the euro.

    Krona Gains

    The krona has gained about 15 percent against the euro since a March 28 low and was trading little changed at 147.27 per single currency as of 12 noon in Reykjavik today.

    “The lifting of the capital controls is a key challenge for Iceland and it’s not an easy task,” she said. At the same time, “the government has regained access to international capital markets; the cleaning up of the balance sheet of banks has been proceeding at good speed. So going forward it’s important that the gains are sustained and consolidated,” she said.

    As the central bank prepares to ease capital controls, policy makers are also raising interest rates in part to protect the krona from any weakening that might ensue. The bank increased its benchmark rate a quarter or a percentage point on June 13, bringing it to 5.75 percent. It was the fifth interest- rate increase since August last year.

    “Further monetary tightening is needed, over the next few quarters, in order for Iceland to get to the target,” Zakharova said. “But we’ve also seen that the central bank has made strong statements about a hawkish monetary policy stance, indicating that the monetary policy will be tightened over time. So we think that the stance is appropriate at this point.”

    To contact the reporter on this story: Omar R. Valdimarsson in Reykjavik valdimarsson@bloomberg.net

    To contact the editor responsible for this story: Jonas Bergman at jbergman@bloomberg.net




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    Iceland Was Right, We Were Wrong: The IMF


    By Jeff Nielson08/15/12 - 03:14 PM EDT

    in(Silver Gold Bull-- For approximately three years, our governments, the banking cabal, and the Corporate Media have assured us that they knew the appropriate approach for fixing the economies that they had previously crippled with their own mismanagement. We were told that the key was to stomp on the Little People with "austerity" in order to continue making full interest payments to the Bond Parasites -- at any/all costs.







    Following three years of this continuous, uninterrupted failure, Greece has already defaulted on 75% of its debts, and its economy is totally destroyed. The UK, Spain and Italy are all plummeting downward in suicide-spirals, where the more austerity these sadistic governments inflict upon their own people the worsetheir debt/deficit problems get. Ireland and Portugal are nearly in the same position.


    Now in what may be the greatest economic "mea culpa" in history, we have the media admitting that this government/banking/propaganda-machine troika has been wrong all along. They have been forced to acknowledge that Iceland's approach to economic triage was the correct approach right from the beginning.


    What was Iceland's approach? To do the exact oppositeof everything the bankers running our own economies told us to do. The bankers (naturally) told us that weneeded to bail out the criminal Big Banks, at taxpayer expense (they were Too Big To Fail). Iceland gave the banksters nothing.


    The bankers told us that no amount of suffering (for the Little People) was too great in order to make sure that the Bond Parasites got paid at 100 cents on the dollar. Iceland told the Bond Parasites they would get what wasleft over, after the people had been taken care of (by their own government).


    The bankers told us that our governments could no longer afford the same education, health care and pension systems which our parents had taken for granted. Iceland told the bankers that what the country could no longer afford was to continue to be blood-sucked by the worst financial criminals in the history of our species. Now, after three-plus years of this absolute dichotomy in economic policymaking, a clear picture has emerged (despite the best efforts of the propaganda machine to hide the truth).


    In typical fashion, the moment that the Corporate Media is forced to admit that it has been serially misinforming us for the past several years; the Revisionists are immediately deployed to rewrite history, as shown in this Bloomberg Businessweek excerpt:


    ...the island's approach to its rescue led to a "surprisingly" strong recovery, the International Monetary Fund's mission chief to the country said.




    Rather, I have consistently argued that it was a matter of simple arithmetic and the most-elementary principles of economics that "the Iceland approach" was the only strategy which could possibly succeed. When Plutarch wrote 2,000 years ago "an imbalance between rich and poor is the oldest and most fatal ailment of all Republics," he was not parroting socialist dogma (1,500 years before the birth of Socialism).
    In fact, from the moment the Crash of '08 was orchestrated and our morally bankrupt governments began executing the plans of the bankers, I have written that the only rational strategy was to put People before Parasites. While I wouldn't expect national policymakers to take their cues from my writing, when I wrote out my economic prescriptions for our economies I didn't base my views on compassion, or simply "doing the right thing."



    Plutarch was simply expressing the First Principle of economics; something on which all of the modern capitalist economists who followed in his footsteps have based their own theories. When modern economists produce their own jargon, such as the Marginal Propensity to Consume; it is squarely based on the wisdom of Plutarch: that an economy will always be healthier with its wealth in the hands of the poor and the Middle Class instead of being hoarded by rich misers (and gamblers).


    So when the Bloomberg Revisionists attempt to convince us that Iceland's strong (and real) economic recovery was a "surprise"; this could only be true ifnone of our governments, none of the bankers andnone of the media's precious "experts" understood the most-elementary principles of arithmetic and economics. Is this the message the media wants to convey?


    What is even more disingenuous here is the congratulatory tone in this exercise in Revisionism, since nothing could be further from the truth. As I detailed in a four-part series one year ago, the campaign of "economic rape" perpetrated against the governments of Europe over the past two and half years (in particular) has been expressly designed to take away"the Iceland option" for Europe's other governments.


    One of the reasons for Iceland being able to escape the choke-hold of the Western banking cabal is that its economy (and its people) still retained enough residual prosperity to tough it out -- as the banking cabal tried to strangle Iceland's economy as retribution for rejecting their Debt Slavery.














    Thus, austerity has been nothing less than a deliberate campaign to destroy these European economies so that the Slaves would be too economically weak to be able to sever their own choke-holds. Mission accomplished!


    One can only assume that neither the Corporate Media nor their Banker Masters would have allowed this clear acknowledgment that Iceland was right and we were wrong to appear within its own pages, unless it felt secure in the knowledge that all the remaining Debt Slaves had been crippled beyond their capacity to ever escape this economic oppression.


    Indeed, for evidence of this we need only look to Greece: the one other European nation where there had been "rumblings" (i.e. riots) aimed at toppling the Traitor Government that served the banking cabal. After two elections, the combination of fear and propaganda bullied the long-suffering Greek people into choosinganother Traitor Government -- which had expressly pledged itself to reinforcing the bonds of economic slavery. When the Slaves vote for slavery, the Slave Masters can afford to gloat.


    Here, the purpose of this Bloomberg propaganda was not to praise Iceland's government (when both the bankers and Corporate Media despise Iceland with all of their considerable malice). Rather, the goal of this disinformation was to manufacture a new Big Lie.


    Instead of the Truth: that from Day 1 Iceland's approach was the only possible strategy which could have succeeded, while our own governments chose a strategy intended to fail; we get the Big Lie. Our Traitor Governments were acting honestly and honourably; and Iceland's success and our failure was yet another "surprise which no one could have predicted."


    We saw precisely the same Revisionism following the Crash of '08 itself, where the mainstream media trotted out all their expert-shills to tell us they had been "surprised" by this economic event; while those within the precious metals sector had been predicting precisely such a cataclysm, in ever more-assertive terms, for several years.


    The real message here for readers is that when an economic strategy of People before Parasites succeeds that there is nothing the least-bit "surprising" about this. As with all the remainder of the world around us, promoting the health of Parasites is only good for the Parasites themselves.


    This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.
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    Finance: The Iceland Solution

    A classic example of getting out of the Rat Race - People unity

    Iceland’s Amazing Peaceful Revolution
    – Still Not in the News (backstory)


    12MAY2012


    73 Comments

    by voice13 in Activism, back stories, conscious evolution, corporatists, creating society, evolution, Humanism, money in politics, Occupy Wall Street, populism,progress, progressive ideals, wealth inequality

    Tags: creating society, democratic,Iceland, peaceful revolution, social evolution

    Iceland’s peaceful revolution is a stunning example of how little our media tells us about the rest of the world.



    Read details about Iceland’s wonderful social evolution at DailyKos, here.
    Another great article is on Bloomberg.com.


    An article at WakeUpWorld says that “The Icelandic economy will outgrow the eurozone in 2012 and is set to outgrow the entire developed world on average, according to estimates from the Organization for Economic Cooperation and Development.



    Watch the video:


    How to Start a Revolution – Learn From Iceland!



    Now Iceland is proceeding to actually prosecute some of their formerly most powerful bankers and the Icelandic special prosecutor has stated that it very well may indict some 90 people.

    Meanwhile, over 200 people, including the former chief executives of Iceland’s three biggest banks, face criminal charges for their activities.


    The following summation has been posted by countless people on Facebook; I’ve reposted it in its entirety:


    ICELAND (GP) – No news from Iceland? Why? Last we heard, people were rising up and overthrowing the bankers. Then, no news on the television or newspapers for two years. What happened? Why won’t the papers and TV tell us how the bankers successfully crushed or minimized another rebellion? Because… THEY DIDN’T! This time, the people won.


    The people of Iceland have overwhelmingly risen up and forced their government puppets of the banks to resign. Primary banks have been nationalized. The debt scam imposed by Great Britain and Holland money printers was declared null and void. A public assembly has been created to rewrite Iceland’s constitution.
    The best part is, all of this happened without violence or bloodshed. A whole country’s revolution succeeded against powers that created the current global crisis without a shot being fired. A very good reason exists for the apparent failure of television and newspapers to provide any publicity on this unprecedented event: what would happen if the rest of the EU and the United States took this as an example?

    The following is a summary of the facts:

    2008 – The main bank of Iceland is nationalized.

    The Krona, the currency of Iceland devaluates and the stock market halts. The country is in bankruptcy

    2008 – Citizens rise up at Parliament and succeed in forcing the resignation of both the prime minister and the effective government. New elections are held.

    Yet, the country remains in a bad economic situation. A Parliament act is passed to pay back 3,500 million Euros to Great Britain and Holland by the people of Iceland monthly during the next 15 years, with 5.5% interest.

    2010 – The people of Iceland again take to the streets to demand a referendum. In January of 2010, the President of Iceland denies approval, instead announcing a popular vote on the matter by the people.

    In March, a referendum and denial of payment is approved by popular vote of 93%. Meanwhile, government officials initiate an investigation to bring to justice those responsible for the crisis. Many high level executives and bankers are arrested. Interpol dictates an order to force all implicated parties to leave Iceland.

    An assembly is elected to write a new constitution (based on the Denmark’s) to avoid entrapments of debt based currency foreign loans. 25 citizens are chosen — with no political affiliation — out of the 522 candidates. The only qualifications for candidacy are adulthood and the support of 30 people. The constitutional assembly started in February of 2011. It continues to present ‘carta magna’ from recommendations provided by various assemblies throughout the country. Ultimately, it must be approved by both the current Parliament and the one created through the next legislative election.

    In summary of the Icelandic revolution, we saw:

    -resignation of the entire corrupt government of the country
    -nationalization of the bank
    -referendum enabling the people to determine their own economic system
    -incarceration of responsible parties, and
    -a rewriting of the Iceland Constitution by its people
    This is significant stuff.


    Have we been informed about this through the main stream media?

    Has any political program on radio or TV commented on this?

    Not that I’ve seen.

    The Icelandic people have demonstrated a way to beat the international money printers and controllers of information. The last thing entrenched usurers would want is for you to think you could also free yourself from their chains.

    ***
    The above article is a reprint.

    UPDATE: Cenk Uyger has posted a good video on Iceland’s peaceful revolution at http://www.alternet.org/newsandviews/article/964401/cenk_uygur%3A_iceland_shows_bailing_out_middle_cla ss_works%2C_not_bailing_out_banks/

    UPDATE: Ex-Bank executives go to jail – In deciding the punishment” the Supreme Court took account of the fact that the “magnitude of the offences was significant,” according to the ruling posted on the Reykjavik- based court’s website.

    Iceland court sentences bankers
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    A story missing from our media: Iceland's on-going revolution


    General
    SATURDAY, 27 AUGUST 2011 07:19
    31 COMMENTS



    by Deena Stryker

    An Italian radio program's story about Iceland’s on-going revolution is a stunning example of how little our media tells us about the rest of the world. We may remember that at the start of the 2008 financial crisis, Iceland literally went bankrupt. The reasons were mentioned only in passing, and since then, this little-known member of the European Union fell back into oblivion.


    As one European country after another fails or risks failing, imperiling the Euro, with repercussions for the entire world, the last thing the powers that be want is for Iceland to become an example. Here's why:


    Five years of a pure neo-liberal regime had made Iceland, (population 320 thousand, no army), one of the richest countries in the world. In 2003 all the country’s banks were privatised, and in an effort to attract foreign investors, they offered on-line banking whose minimal costs allowed them to offer relatively high rates of return. The accounts, called IceSave, attracted many UK and Dutch small investors. But as investments grew, so did the banks’ foreign debt. In 2003 Iceland’s debt was equal to 200 times its GNP, but in 2007, it was 900 percent. The 2008 world financial crisis was the coup de grace. The three main Icelandic banks, Landbanki, Kapthing and Glitnir, went belly up and were nationalised, while the Kroner lost 85% of its value with respect to the Euro. At the end of the year Iceland declared bankruptcy.


    Contrary to what could be expected, the crisis resulted in Icelanders recovering their sovereign rights, through a process of direct participatory democracy that eventually led to a new Constitution. But only after much pain.


    Geir Haarde, the Prime Minister of a Social Democratic coalition government, negotiated a two million one hundred thousand dollar loan, to which the Nordic countries added another two and a half million. But the foreign financial community pressured Iceland to impose drastic measures. The FMI and the European Union wanted to take over its debt, claiming this was the only way for the country to pay back Holland and Great Britain, who had promised to reimburse their citizens.


    Protests and riots continued, eventually forcing the government to resign. Elections were brought forward to April 2009, resulting in a left-wing coalition which condemned the neoliberal economic system, but immediately gave in to its demands that Iceland pay off a total of three and a half million Euros. This required each Icelandic citizen to pay 100 Euros a month (or about $130) for fifteen years, at 5.5% interest, to pay off a debt incurred by private parties vis a vis other private parties. It was the straw that broke the reindeer’s back.


    What happened next was extraordinary. The belief that citizens had to pay for the mistakes of a financial monopoly, that an entire nation must be taxed to pay off private debts was shattered, transforming the relationship between citizens and their political institutions and eventually driving Iceland’s leaders to the side of their constituents. The Head of State, Olafur Ragnar Grimsson, refused to ratify the law that would have made Iceland’s citizens responsible for its bankers’ debts, and accepted calls for a referendum.


    Of course the international community only increased the pressure on Iceland. Great Britain and Holland threatened dire reprisals that would isolate the country. As Icelanders went to vote, foreign bankers threatened to block any aid from the IMF. The British government threatened to freeze Icelander savings and checking accounts. As Grimsson said: “We were told that if we refused the international community’s conditions, we would become the Cuba of the North. But if we had accepted, we would have become the Haiti of the North.” (How many times have I written that when Cubans see the dire state of their neighbor, Haiti, they count themselves lucky.)


    In the March 2010 referendum, 93% voted against repayment of the debt. The IMF immediately froze its loan. But the revolution (though not televised in the United States), would not be intimidated. With the support of a furious citizenry, the government launched civil and penal investigations into those responsible for the financial crisis. Interpol put out an international arrest warrant for the ex-president of Kaupthing, Sigurdur Einarsson, as the other bankers implicated in the crash fled the country.


    But Icelanders didn't stop there: they decided to draft a new constitution that would free the country from the exaggerated power of international finance and virtual money. (The one in use had been written when Iceland gained its independence from Denmark, in 1918, the only difference with the Danish constitution being that the word ‘president’ replaced the word ‘king’.)


    To write the new constitution, the people of Iceland elected twenty-five citizens from among 522 adults not belonging to any political party but recommended by at least thirty citizens. This document was not the work of a handful of politicians, but was written on the internet. The constituent’s meetings are streamed on-line, and citizens can send their comments and suggestions, witnessing the document as it takes shape. The constitution that eventually emerges from this participatory democratic process will be submitted to parliament for approval after the next elections.


    Some readers will remember that Iceland’s ninth century agrarian collapse was featured in Jared Diamond’s book by the same name. Today, that country is recovering from its financial collapse in ways just the opposite of those generally considered unavoidable, as confirmed yesterday by the new head of the IMF, Christine Lagarde to Fareed Zakaria. The people of Greece have been told that the privatization of their public sector is the only solution. And those of Italy, Spain and Portugal are facing the same threat.


    They should look to Iceland. Refusing to bow to foreign interests, that small country stated loud and clear that the people are sovereign.


    That’s why it is not in the news anymore.


    Please help maintain this site by donating a small amount - See the donate button to the right.

    Courtesy of http://www.dailykos.com - (A nod to Bella Caledonia for making us aware of this article)
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    Dan White: The economic return of Iceland has proved that the joke was on us


    By Dan White

    Sunday December 16 2012


    WAY back in the autumn of 2008, the joke in financial circles was that the only difference between Ireland and Iceland was a letter and six months. Now, with the Icelandic banks preparing to issue foreign currency bonds once again, it turns out that the joke was on us.

    Remember when the Icelandics did the unthinkable and, unlike Ireland, told bank creditors to take a hike? They also imposed capital controls and allowed the value of their currency to fall – the Icelandic krona has lost almost half of its value against the euro over the past five years.

    The "experts" queued up to assure us that these latter-day Vikings would be severely punished for their impertinence. While no one forecast that a hole would open up in the North Atlantic and swallow Iceland whole, some of the predictions came pretty darned close.

    Meanwhile, we in Ireland did what we were told and repaid over €70bn of bank bonds at par. By doing so, even at the cost of bankrupting the State, the "experts" assured us that we would retain the confidence of the markets. Now, four years later, it is clear that, not for the first time, the "experts" have got it wrong. Catastrophically and utterly wrong.

    Since putting the taxpayer on the hook for the banks' debts, the domestic economy has shrunk by almost a quarter in nominal or cash terms. And any real recovery is still a long way off. The documents along with this month's Budget reveal that the Department of Finance is expecting Irish GNP, basically the domestic economy, to grow by 1.4 per cent in 2012 and 0.9 per cent next year. Other forecasters are taking a far more pessimistic view.

    Way out in the North Atlantic, things have turned out rather differently. Economic growth is expected to be 3.1 per cent this year and 2.2 per cent in 2013. But surely after stitching up its bank creditors – the Icelandic banking default cost $85bn, a massive amount for a country with a population of 320,000 people – the country remains persona non grata with the international financial markets. Having been so badly bitten once, the markets must be twice or even thrice shy of Iceland.

    Not so. The Icelandic treasury successfully flogged $1bn of 10-year bonds to investors in May. These bonds were initially priced to yield a spread of 407 basis points (4.07 per cent) over comparable US treasuries, a margin which has since narrowed to 296 basis points.

    In the financial markets, as elsewhere in life, eaten bread is soon forgotten. Would-be investors in Icelandic bonds focus most of their attention, not on what happened in the past, but on what is likely to happen in the future.

    What these investors see is that, by burning the bank bondholders rather than taking these debts on to the national balance sheet, the Icelandic sovereign is in a far stronger position to repay any future debts.

    Compare this to the Irish situation. By being good boys did we retain the confidence of the markets? No we didn't. We too were locked out of the markets and were bounced into accepting an EU/IMF bailout in November 2010. Far from doing better than the Icelandics, we have ended up with the worst of all possible worlds. We are still stuck with the banks' legacy debts and, a few carefully choreographed fund raisings by the NTMA notwithstanding, the State remains largely reliant on official lenders to fund its activities. This is because investors can see that, with the debts of the Irish State likely to exceed €200bn – the equivalent of more than 150 per cent of GNP – by the end of 2013, there is no way the Irish sovereign can repay existing borrowings let alone any new loans it may seek to raise.

    Now, as if to add insult to injury, the Icelandic banks are preparing a return to the markets. Unlike Ireland, Iceland immediately nationalised its bust banks in the autumn of 2008 but refused to assume responsibility for their liabilities. The cleaned-up Icelandic banks are now getting ready to issue foreign currency bonds, the proceeds of which will be used to help finance the thriving, export-driven Icelandic economy.

    When we look at what has happened in Iceland, the proposed deal on legacy Irish bank debt tastes like very thin gruel indeed. Once again the Irish Government is talking up the chances of such a deal following last week's apparent agreement by EU finance ministers on a new eurozone banking supervision regime. The latest "deadline" for such a deal is supposedly the end of March 2013. Given that several previous "deadlines" have come and gone, don't hold your breath.

    Maybe, instead of being the good boys it's time we followed the Icelandic example and indulged in some Viking-style plunder and pillage.

    - Dan White

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    Iceland Just Jailed Dozens of Corrupt Bankers for 74 Years, The Opposite of What America Does

    By Jay Syrmopoulos on October 21, 2015



    Raykovich, Iceland – In stark contrast to the record low number of prosecutions of CEO’s and high-level financial executives in the U.S., Iceland has just sentenced 26 bankers to a combined 74 years in prison.


    The majority of those convicted have been sentenced to prison terms of two to five years. The maximum penalty in Iceland for financial crimes is six years, although hearings are currently underway to consider extending the maximum beyond six years.


    The prosecutions are the result of Iceland’s banksters manipulating the Icelandic financial markets after Iceland deregulated their finance sector in 2001. Eventually, an accumulation of foreign debt resulted in a meltdown of the entire banking sector in 2008.


    According to Iceland Magazine:


    In two separate rulings last week, the Supreme Court of Iceland and the Reykjavík District Court sentenced three top managers of Landsbankinn and two top managers of Kaupþing, along with one prominent investor, to prison for crimes committed in the lead-up to the financial collapse of 2008. With these rulings the number of bankers and financiers who have been sentenced to prison for crimes relating to the financial collapse has reached 26, and a combined prison time of 74 years.

    Massive debts were incurred in the name of the Icelandic public, to allow the country to continue to function, which are still being repaid to the IMF and other nations eight years later by the citizens of Iceland. In contrast to the U.S., Iceland has chosen to hold the criminals that manipulated their financial system accountable under the law.



    In the U.S., not a single banking executive was charged with crimes related to the 2008 financial crisis, even though the U.S. itself precipitated the crisis. Icelandic President, Olafur Ragnar Grimmson summed it up best in his response when asked how his country recovered from the global financial crisis.


    “We were wise enough not to follow the traditional prevailing orthodoxies of the Western financial world in the last 30 years. We introduced currency controls, we let the banks fail, we provided support for the people and didn’t introduce austerity measures like you’re seeing in Europe.”

    While Iceland has prosecuted those that caused their financial crisis, America has done the opposite. In 2008, after Congress bailed out the failing American banks to the tune of $700 billion dollars, courtesy of the American taxpayer, many of the executives of institutions that received TARP bailout funds ended up getting large bonuses!


    The prosecution of the Icelandic banksters represents an accountability that does not exist in the United States of America. It seems clear that the financial “Masters of the Universe” are the ones that truly control the political apparatus in the U.S., making it obvious there is no one who is going to hold them accountable for manipulating and crashing the financial markets.


    Please share this article to help expose who really controls the political system in the United States!!

    Jay Syrmopoulos is an investigative journalist, free thinker, researcher, and ardent opponent of authoritarianism. He is currently a graduate student at University of Denver pursuing a masters in Global Affairs. Jay’s work has been published on Ben Swann’s Truth in Media, Truth-Out, AlterNet, InfoWars, MintPressNews and maany other sites. You can follow him on Twitter @sirmetropolis, on Facebook at Sir Metropolis and now on tsu
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