Archive for the ‘Iceland’ Category
Hint To Other Nations: Here’s The Bill
January 5th, 2010 | 
Author:
Hint To Other Nations: Here’s The Bill
Posted by Karl Denninger
For your coddling of the banker cabal, that is.
Yes, that’s my view. This sort of bluster and bullshit must not stand:
Dutch Finance Minister Wouter Bos would not be drawn into speculation on steps against Iceland. “But this can’t go on forever. We want our money back. We negotiated reasonably.”
Mr. Bos, go perform an indecent act on yourself.
You, along with the rest of the “western world”, were complicit in and willing partners with the criminal banking cabal that ripped off the entire world with their worthless securities.
You “negotiated” for the right to steal even more after you failed to lock up the banksters for their criminal conduct – for intentional concealment and fraud in their “marketing” of these securities to investors worldwide.
You, just as with those here in Washington DC, were fully complicit in the looting of the public that took place over the last decade and more.
YOUR GOVERNMENT has allowed institutions in your nation (and elsewhere) to claim that “debt is output” and that speculation constitutes GDP. That’s a willful, knowing lie.
Britain is also weighing in with the following threat:
Myners (the British Financial Services Minister) told the BBC that if Iceland voted against the deal, it would cut itself off from the global financial system and from International Monetary Fund aid for its economy, one of the worst hit by the world bank crisis.
‘The Icelandic people, if they were to reach that conclusion, would effectively be saying that Iceland does not want to be part of the international financial system, that Iceland doesn’t want to have access to multi-national, national and bilateral funding and doesn’t want to be regarded as a safe counter-party with whom to do business,’ Myners said.
Mr. Myners, with all due respect (that is, none), may you be fornicated by a stallion.
“The City” has for literal hundreds of years been the hotbed of bankster corruption, greed and fraud. Your nation is on record (in The Congressional Record no less!) as having sent bankster “representatives” over to this country shortly after it was formed for the explicit purpose of bribing our Congress into being recaptured after you lost the Revolutionary War!
I, for one, am tired of this game of “captured government” and it appears so is Iceland and its people.
It’s about damn time.
You and your ilk had every ability to stop the fraud and looting over the last several decades. You could have prevented the blowing of your own property bubble and destruction of your federal budget, along with the insane expansion of leverage and “yield seeking” through fraudulent misrepresentation of risk and leverage but you didn’t do so. Instead you, like the so-called “government regulators” in The United States, knelt before the banking cartels and performed obscene acts so frequently that you wore out sets of kneepads at a rate that kept Home Depot’s profit margins at a record during the decade of the 2000s.
Now that the bubble has burst you’re whining that you’re going to have to eat the product of your own cooking and willful blindness.
To that I say: Tough crap.
Start locking up the jackasses who did this to the global economy instead of kneeling before Zod for yet more obscenities. You know who they are. Just walk down any of your much-vaunted “streets” in “The City” and where you see a $5,000 suit apply a pair of handcuffs.
If you won’t and don’t I predict that it will not be long before the reaction of the Icelandic people spreads – including to the UK.
Whether the people of your country will give you the opportunity to do the right thing when, not if that sentiment spreads is something you may wish to ponder.
Posted in Bank Failures, Banking System, Banking industry, Banks, Collapse, Debt, Economic Crisis, Economy, Financial System, Iceland, bank bailouts, banking fraud | 
Comments Closed
Iceland: A Cautionary Tale
Posted by Karl Denninger
When in the course of human events……
So began a document written over 200 years ago.
But for a very long time, before there were firearms in the hands of the people, there were pitchforks and…..
Yes, that would be torches.
But that is not 200 years ago, or 400, or 1,000.
It is today.
In Iceland.
A land where a handful of banksters robbed the nation and looted its Treasury, then demanded that the public accept paying for the consequences.
The people have risen and declared that these are the acts of a criminal gang. That the actions that led to this distress were not mistakes, they were instead unindicted and unpunished felonies. That the people were unwilling and unknowing dupes, not willing participants with equal culpability.
And finally, that they will not pay so the criminal cabal – the international bankster fraternity – will be protected and made whole.
Iceland’s President has said “no”:
“The cornerstone of Iceland’s constitution is that the nation is the highest judge for the validity of law,” Grimsson told reporters at his residence outside the capital Reykjavik today.
Grimsson vetoed the so-called Icesave accord after more than 60,000 of Iceland’s 320,000 inhabitants signed a petition urging him to reject the legislation. His decision means lawmakers must either drop the bill or put the matter to a referendum.
Does anyone know what the laws are governing immigration – to Iceland?
I’m only half-joking.
This is the first President who has acted as a President. Who has recognized, understood and acted in accordance with the will of the people.
70% of the population appear to oppose bailing out the criminal cabal.
Contrast this with the EESA/TARP legislation.
By a margin of more than 100:1 and in some districts a margin reported as high as 300:1 The American People called, faxed and emailed their Representatives and Senators, along with the White House, to tell them NOT TO BAIL OUT THE CRIMINAL BANKING CABAL.
Our Congress and President did so anyway.
In Iceland we have seen proof that a strong display of the good old-fashioned torch – with the implied threat of the pitchfork being next – was sufficient for the government to recognize that:
That whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it, and to institute new Government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their Safety and Happiness.
Prudence, indeed, will dictate that Governments long established should not be changed for light and transient causes; and accordingly all experience hath shewn that mankind are more disposed to suffer, while evils are sufferable than to right themselves by abolishing the forms to which they are accustomed. But when a long train of abuses and usurpations, pursuing invariably the same Object evinces a design to reduce them under absolute Despotism, it is their right, it is their duty, to throw off such Government, and to provide new Guards for their future security.
I am convinced that our nation will not stop being looted by this very same criminal cabal until The People display the torch and reiterate the foundational principal of this Republic – that we, the people, are stating our intention of revoking The Government’s right to exist should it continue to act at the behest of a criminal cabal hellbent and determined on looting every member of society along with the public Treasury.
The choice is yours America.
You have seen today that forceful yet peaceful demonstration – a clear and unmistakable statement that the principles that underlay The Declaration of Independence remain in full force and effect, and that we, the people are both willing and prepared to enforce them if it becomes necessary – still works.
That you, not the den of vipers, control the ultimate path of legislation in all civilized nations.
When will you, America, be willing to display your torch?
Dubai: Floating on an Island of Debt
By Economic Forecasts & Opinions
Stock markets around the world cracked on Friday with the Dow Jones industrial average down more than 150 points (Fig. 1), and commodities plunging as Dubai debt woes unnerved investors, and sent tremors of uncertainty throughout all markets.
Concerns that a government-backed investment company risked default ripped through world markets. Investors read it as a sign of yet another sovereign implosion after Iceland and Ireland, and recoiled from risk and piled into dollars.
Deutsche Bank estimates that Dubai’s property prices, both commercial and residential, have halved since August last year, and could fall a further 15-20% this year.
U.S. Banks Less Exposed
Most analysts believe U.S. banks are probably less exposed than European rivals to a potential debt default by Dubai World, but a lack of transparency and the interconnection of the modern financial system make it difficult to know which institutions are ultimately exposed.
Dubai World’s largest creditors are reportedly domestic banks in Dubai and Abu Dhabi. MarketWatch noted data from the Bank for International Settlements which put cross-border banking exposure for the UAE as a whole at $123 billion at the end of June. Of that total, European banks hold 72%, with the United States and Japan only holding 9% and 7% of the exposure, respectively. The United Kingdom is by far the biggest creditor with a share of 41%.
Reminder of Other Risks
As pointed out in my previous article that the commercial real estate sector posed a much greater threat than the over-hyped “mother of all carry trades.” The Dubai debt crisis further reinforces this viewpoint.
As commercial property values fall, debt defaults rise. The $3.4 trillion outstanding in debt backed by commercial real estate poses a real threat to the recovery. Trepp LLC reported that last month, delinquencies on U.S. commercial real estate loans that were packaged into commercial mortgage-backed securities reached 4.8%, more than six times the year earlier level. Hotel loans, at 8.7% distressed, have begun falling into delinquency faster than any other kind of commercial real estate debt.
Write-downs and losses at banks around the world have risen to more than $1.7 trillion since 2007 as the credit crisis undermined the value of assets owned by financial institutions, according to data compiled by Bloomberg. Any further deleveraging and the resulting credit tightening from commercial real estate would impede the financial sector and probably derail the U.S. economy sending it into another recession.
Housing Market Mortgage Crisis
Based on a study released by Zillow.com, the foreclosure crisis has moved beyond subprime mortgages and into the prime mortgage market. (Fig. 3) While subprime borrowers are still a factor in the current foreclosure epidemic, it’s becoming increasingly apparent that the weak labor market is the driving force behind the mortgage crisis we face today.
According to the Mortgage Bankers Association, one in seven U.S. home loans was past due or in foreclosure as of Sept. 30, putting that quarterly delinquency measure at its highest level since the report’s inception, 1972, and up from one in ten at the beginning of the year.
The continued surge in delinquencies suggests that a recovery in the housing market could be hindered by the weak job market as well as by further fallout from the easy money and loose lending practices of the past. The foreclosures and delinquencies are expected to keep rising well into 2010, not leveling off until the unemployment rate starts to moderate.
In a study by First American CoreLogic found that one in four of all U.S. mortgage-borrowers owe more than the value of their properties in the 3rd quarter. And many experts didn’t expect U.S. home prices to hit bottom until early 2011, perhaps falling another 5-10%, as more foreclosures get pushed onto the market.
Negative equity is another outstanding risk hanging over the mortgage market.
Dubai Is No Lehman
The circumstances behind Dubai’s moves are murky, making it hard to gauge the exact risk to the pertaining bonds and Dubai’s own general creditworthiness. UBS cautioned that Dubai’s overall debt “might be higher than the generally assumed $80 billion to $90 billion, due to potential off-balance sheet liabilities. These could include unlimited and unquantifiable amount of credit default swaps (CDS) and other derivatives against the underlying assets, and once unraveled, could potentially erupt into a subprime-like crisis.
The current expectation; however, is that there’s a good chance that Dubai’s problems will probably prove a local issue. Most likely, Dubai, or its neighboring emirate, Abu Dhabi, won’t risk tarnishing their images and reputation further, and will come up with a reasonable resolution.
Even if Dubai goes into sovereign default, the amount is probably not enough on its own to threaten the financial system since any actual losses would be a fraction of the total. So, the problems in Dubai are unlikely to be as serious as last year’s Lehman Brothers collapse, nor is it a reflection on the ability of emerging markets to lead a global economic recovery.
Rational Expectations?
But Dubai could well spur a broader crisis of investor confidence in overly leveraged economies as market confidence world-wide is still fragile from the severity of the financial crisis. The debts of many emerging markets have risen even further as the countries governments have fought the ravages of the global recession by issuing more stimulus debt to fill the gap voided by private investment.
The spread of credit-default swaps on developing-nation’s bonds jumped 14 basis points after the Dubai news broke, the most in a month, to 3.24 percentage points, according to JPMorgan Chase & Co.’s EMBI+ Index. There is also a clear sign of potential contagion effects of global risk aversion on basically all risky assets, with the dollar and yen being the prime beneficiaries.
Rational expectations or not, for now, the Dubai crisis is simply a reminder that the severe global recession has relegated much debt to near junk status, and there still remains a high degree of uncertainty as to the percentage recoverable on all outstanding debt which is going to be coming due over the next 5 years.
Despite some seminal signs of green shoots in the news headlines during this 9 month liquidity driven rally in many asset classes around the globe, we should be reminded that all that glitters is not gold, and that the global economic recovery is still on shaky ground.
Posted in Banks, Bloomberg, CDS, Collapse, Commercial Mortgage-Backed Securities, Commercial Real Estate, Commodities, Corruption, Credit Crisis, Credit Default Swaps, Creditors, Debt, Defaults, Delinquencies, Derivatives, Dollar, Dow Jones, Dow Jones Industrial Average, Dubai World, Economic Recovery, Economy, Financial Crisis, Financial System, Foreclosures, GDP, Gold, Green Shoots, Gross Domestic Product, Iceland, Ireland, Japan, Las Vegas, Lehman, Lehman Brothers, Markets, Money, Moody's, Mortgage Bankers Association, Mortgage-Backed Securities, Mortgages, Nakheel, Oil, Recession, Sovereign Default, Stimulus, Subprime, Subprime Mortgages, Swaps, TREPP, Transparency, UAE, UBS, Unemployment, United Kingdom, United States, Yen, abu dhabi, bonds, chase, dubai, housing market, lending, loans, losses, mortgage, off-balance sheet, prices, recovery, risk, securities, war |
Comments Closed
