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Old 14.10.2008, 11:22
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Begga Begga is offline
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Re: How Safe is UBS

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Begga - unfortunately the Iceland conundrum was well known. Last may, William Buiter, a well known economist who also teaches at the London School of Economics, was indicating Iceland as an example of a central bank that would go bust (I will leave the technicalities aside). That's 5 months before the facts, and I don't think he just woke up to the idea the very day he wrote his piece (I will have to look for a link for it - it's called "Can Central Banks go Broke?"). Which means that the issue w/ the "Icebanks" and the ISK, etc was indeed well known beforehand.

But this begs another question: since so many economists and specialists who are close to the ear of those-in-power *knew* that this was a very clear danger, why wasn't anything done beforehand? Why did they allow the problem to escalate to the point where the clean-up could possibly be more expensive than a preventive solution?... :-/

Yes I know, I know... now I know...
We have been getting warnings all year. Sometimes the press went to the government with these consernes, but always got "Don't worry - be happy" back... These old news are more visble now than few months ago though...
I think the government were really blinded in it's strong belive on the banks. That's a bit Icelandic, to think we can do anything and nothing is too big for us...

I don’t really know what will happen to the house-market, but it will go down for sure...
The last years, the prizes for houses have gone up, and are most over estimated today – I THINK. The last months, selling have gone done, and currently it is absolutely stopped - of course causing the builders hard time since they cannot sell their work any more, the domino affect have not stopped.
Since I found the renting and housing rather cheap when I moved to Switzerland, you can maybe understand me when I say that it would be “right” for the houses in Iceland to go down in prizes, but of course lot of people will then lose money and in some cases lone could be higher than the house is worth. I can not explain it for you how happy I am I didn’t fall for the new offers of lone in foreign currency like many did, and do now face that the lone have double and values of the houses going down.
The fall of the kròna also makes all food that we need to import (we import almost everything) will get very expensive now…

Some bullets I got from a “group of actions” today:
The government of Iceland guaranteed 300,000 bank savings in England, without asking its people if we were okay with it. (I remind you, we are only 313,000 total in Iceland, and this was only in England.)

The banks have now gone bankrupted and now need its guarantee – US.
The new Landsbanki owned by the government of Iceland just got a lone from the UK for £ 100.000.000. Also the government of Iceland is getting € lone from the UK so they can pay up its guarantees…We also got € from Holland to pay up the guarantees there…

And we’re also adding huge loan from IMF for some billions, placing us among countries like Somalia that had needed IMF’s help – that or the Russians…

Getting dizzy? Need to remind that we, the payers, are about 313,000 including old people, disabled people and children….
Taxes were before 34,5% of everyone’s salaries, but since we have nice wealfear system and nearly free education, it was not so bad.
No taxes will go up, and the wealfear system cut down…

Can a country really go bankrupt? It is not like we will change a name of a company and continue the business under new ID… We are people who live there and will continue to live there, of course we need to pay for “our” guarantees, even though we know we are going from one of the happiest countries in the world to… a 3rd world country?

At the same time we are watching our country sink in the dirty toilet, the very few riche men dare to come to interview as say, they have it quite good despite the crises…. Do we, the public, have the rights to freeze all their wealth – witch they got by the playing the game witch put Iceland in the possison we are now facing?

Sorry, I can only imagine you see me as angry and bitter, trying to find someone to blame all the time… And yeah, you're right... it is ecactly how I feel right now…
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