LOL @Iceland

[Ns1]

Consumerist/Vanity Fair

And if you thought our mortgage situation was bad, check out what Iceland was doing. They were using something called a foreign currency mortgage:

Vanity Fair:

For the past few years, some large number of Icelanders engaged in the same disastrous speculation. With local interest rates at 15.5 percent and the krona rising, they decided the smart thing to do, when they wanted to buy something they couldn't afford, was to borrow not kronur but yen and Swiss francs. They paid 3 percent interest on the yen and in the bargain made a bundle on the currency trade, as the krona kept rising.
...
It must have seemed like a no-brainer: buy these ever more valuable houses and cars with money you are, in effect, paid to borrow. But, in October, after the krona collapsed, the yen and Swiss francs they must repay are many times more expensive. Now many Icelanders-especially young Icelanders-own $500,000 houses with $1.5 million mortgages, and $35,000 Range Rovers with $100,000 in loans against them.

http://consumerist.com/5200455...untry-its-a-hedge-fund

omg

Global financial ambition turned out to have a downside. When their three brand-new global-size banks collapsed, last October, Iceland?s 300,000 citizens found that they bore some kind of responsibility for $100 billion of banking losses?which works out to roughly $330,000 for every Icelandic man, woman, and child

On top of that they had tens of billions of dollars in personal losses from their own bizarre private foreign-currency speculations, and even more from the 85 percent collapse in the Icelandic stock market

The investigators produced a chart detailing a byzantine web of interlinked entities that boiled down to this: A handful of guys in Iceland, who had no experience of finance, were taking out tens of billions of dollars in short-term loans from abroad. They were then re-lending this money to themselves and their friends to buy assets?the banks, soccer teams, etc. Since the entire world?s assets were rising?thanks in part to people like these Icelandic lunatics paying crazy prices for them?they appeared to be making money. Yet another hedge-fund manager explained Icelandic banking to me this way: You have a dog, and I have a cat. We agree that they are each worth a billion dollars. You sell me the dog for a billion, and I sell you the cat for a billion. Now we are no longer pet owners, but Icelandic banks, with a billion dollars in new assets.

The Danske Bank report alerted hedge funds in London to an opportunity: shorting Iceland. They investigated and found this incredible web of cronyism: bankers buying stuff from one another at inflated prices, borrowing tens of billions of dollars and re-lending it to the members of their little Icelandic tribe, who then used it to buy up a messy pile of foreign assets. ?Like any new kid on the block,? says Theo Phanos of Trafalgar Funds in London, ?they were picked off by various people who sold them the lowest-quality assets?second-tier airlines, sub-scale retailers. They were in all the worst LBOs.?

 

[xanis]

owned

 

[JS80]

The party that is the real LULZFAIL are the swiss banks who now have bad loans on their books.

 

[ElFenix]

06/01/2008: 0.013480 dollar/krona

today: 0.00816235 dollar/krona

 

[Newbian]

At least they still have some of the hottest women there.

 

[rh71]

moral of the story: don't gamble?

 

[dquan97]

Originally posted by: rh71
moral of the story: don't gamble?

Lesson: it's the best time to visit Iceland!

 

[dainthomas]

Good thing they always have the fermented shark industry to fall back on.

 

[PricklyPete]

Originally posted by: Newbian
At least they still have some of the hottest women there.

That they do. Sounds like a new business plan.

 

[13Gigatons]

Don't gloat, America is heading in that direction with a 350% GDP to debt ratio we will soon catch Iceland's 850%.

 

[Ns1]

Originally posted by: 13Gigatons
Don't gloat, America is heading in that direction with a 350% GDP to debt ratio we will soon catch Iceland's 850%.

You bother reading Vanity Fair's article?

 

[sutahz]

I have a hard drive to sell for $10,000,000.00, any takers?

 

[ElFenix]

Originally posted by: 13Gigatons
Don't gloat, America is heading in that direction with a 350% GDP to debt ratio we will soon catch Iceland's 850%.

mathfail

 

[magnux]

Guess my wife and I are going to live like royalty on our trip.. sweet. But, what I really want to know is.. can I buy Björk yet?

 

[zinfamous]

Originally posted by: magnux
Guess my wife and I are going to live like royalty on our trip.. sweet. But, what I really want to know is.. can I buy Björk yet?

I don't know man, last I checked (over the summer), it's ridiculously expensive to travel there. Don't imagine that prices will be cheap...

I have an Icelandic buddy that moved back home about 3 years ago. Last heard from him in December/January. Needless to say, it really is bleak over there. He was railing about all the fucktards in charge. I wouldn't think him the type to get caught up in this poor debt management scheme (he's a PhD in evolutionary genetics; so most likely, he just doesn't care about these type of schemes anyway.)

doesn't matter though, because now everyone is screwed.

Well, at least they still have a plethora of puffins, iirc. Should keep them out of a famine, at least.

 

[mundane]

I wondered how the entire country had spectacularly collapsed without reading up on the details. Thanks, OP.

 

[keird]

Hot chicks, puffins and geothermal heating. They'll be fine.

 

[magnux]

Originally posted by: zinfamousI don't know man, last I checked (over the summer), it's ridiculously expensive to travel there. Don't imagine that prices will be cheap...

Well, we're not looking to go during the summer (or tourist seasons). I'm actually looking to go during the Fall/Winter -- we actually enjoy that kind of weather. Either way, I did some preliminary pricing and it actually comes out cheaper than our other desired destinations (Alaska, Russia).

So, Iceland it is this time around..

 

[lokiju]

Man I need a cliffs of this.

I tried reading the whole thing but keep getting pulled away but pesky work!

 

[shortylickens]

Originally posted by: dquan97

Originally posted by: rh71
moral of the story: don't gamble?

Lesson: it's the best time to visit Iceland!

Ever since I was stationed there I have wanted to pick myself up a nice viking wife.
Looks like now is a good time.

 

[BladeVenom]

Originally posted by: Newbian
At least they still have some of the hottest women there.

Just don't let them anywhere near your credit cards.

 

[techs]

What is really funny is Iceland decided to follow Reaganomics since the late 1980's. In fact many of the Reagan administration economic advisors went to Iceland to set up a pure version of laissez-faire capitalism.

How's that working out for you, Iceland?

 

[shortylickens]

Originally posted by: techs
What is really funny is Iceland decided to follow Reaganomics since the late 1980's. In fact many of the Reagan administration economic advisors went to Iceland to set up a pure version of laissez-faire capitalism.

How's that working out for you, Iceland?

About as well as us and England, considering much of their business was with us and almost all their banking was in England.

 

[Skeeedunt]

There are only 300,000 people in Iceland? Weird.

 

[Red Squirrel]

I never realized people actually lived there. I thought it was just a giant ice/snow land. Then again, lot of Americans think the same about Canada.

It would be an ideal location to build a data center though. If only I had that type of money.