Posted on 02/04/2011 9:12:22 AM PST by SeekAndFind
It’s not rocket science, it was common sense....of course that’s in short supply in Washington DC.
They defaulted on their obligations. It’s a great move, unless you ever want to borrow money again.
Yet there were people here on FR saying Iceland was a “deadbeat” for not bailing out the banks.
In the case of the USA, Federal bank regulators essentially threatened banks if they didn’t take the TARP bailouts, which resulted in hundreds of banks around the country taking tax dollars they didn’t need.
Then once those bailouts were in place the Obama administration began using them as leverage to control the banks.
TARP, at least under Obama, was never about economic rescue and always about expanding federal control over the financial sector.
TARP was a well-intentioned boondoggle started by Bush and then seized upon by Obama.
“Iceland did not bail out the banks or the bank investors and its economy is thriving”
Our model beats theirs. We bailed our banks with taxpayer money and the bank execs are thriving: “All-Time Record: Wall Street Compensation Hits $135 Billion” http://blogs.forbes.com/robertlenzner/2011/02/02/alltime-record-135-billion-wall-street-compensation/
Pardon, but exactly who defaulted?
We ought to remember.... Iceland’s banks weren’t the cause of the mess, our banks were. Iceland was simply one of the smaller dominoes that fell when our banking crisis started the mess rolling.
In the case of the good old USA, I’m not sure if our financial crisis is even over.
There is no way that any economy would survive the $60 trillion in made up paper of CDOs that our banks would be on the hook for. It still may very well bring down the entire house of cards.
The joke is on the rest of us: Iceland, unable to obtain foreign capital after the banks went bust, negotiated a 2.1B rescue package from the IMF.
It's not. This is just the beginning of Round 1.
All we did was delay the inevitable and make the inevitable that much worse.
Something just does not smell right and does not pass the constitutional muster.
Can government COERCE a private company to ACCEPT money they did not ask for ?
Funny how after the government started attaching strings to the TARP bailouts, the banks all started saying they didn’t want it in the first place, they didn’t need it, Hank Paulson forced them into it.
I have a hard time believing that people in powerful financial positions are that easily coerced.
Would you say no if the Treasury Secretary called you up and said he demanded you accept a $45 billion bailout at 0% interest, no rush, pay us back whenever you feel like it?
I believe there are icelander banksters in prison right now. So their banks were indeed the cause of SOME of the mess.
Iceland essentially paid off domestic depositors by stiffing their foreign counterparts - possible because of the large relative size of the latter’s deposits.
And the current government is still having to force lenders to write off around 1.3B in domestic consumer debt.
“Can government COERCE a private company to ACCEPT money they did not ask for ?
Funny how after the government started attaching strings to the TARP bailouts, the banks all started saying they didn’t want it in the first place, they didn’t need it, Hank Paulson forced them into it.”
They can’t, but every single one of them knew that they’d fall like dominoes unless it was a package. Those bastards that brag today were shaking in their boots and imagining themselves selling their $50 Million artworks to ‘survive.’
For example, if BAC had failed, Citibank would have followed and viceversa. They had this scam where they guaranteed each others’ debts and bets along with shell companies. Or AIG ‘insuring’ a gazillion billion of CDOs with barely any money set in reserves.
The prosecutors are just getting started, there were arrests of high level banking officials all through 2010 and continuing into 2011.
I remember this : Iceland had a referendum on the arrangements to pay back the UK and Dutch governments for bailing out Icesave depositors on Iceland’s behalf.
I believe Iceland’s new banks will not be in the market for several more years.
They’ll have to find work for 2,000 ex-financial people (the equivalent of us finding new jobs for 25,000).
Asset values and incomes are still way down, and Icelanders aren’t able to pay back mortgages and loans. All of the arrangements made in respect of the new banks and old debt are under legal challenge.
So, Just to re-affirm this again.
Iceland had a referendum on the terms under which they repay depositors of the banks. They are still going to pay the depositors.
Iceland faced the same decision we did:
Option 1: wind up the banks, tell the bondholders to shove it and deal with the depositors.
Option 2: keep the banks open, keep the bondholders sweet and deal with the depositors over a 10-15 period
In Iceland’s case, their deposit debt was smaller than their bondholder debt, so they took that option. The oppositive applied to us. Our deposit liability was much larger than our bondholer liability.
Iceland may still have to pay its bondholders, in which case it will have suffered a double-whammy.
Are you sure? It seemed to be an organized crime event of Bankers with lobbyists grabbing money that wasn't theirs in exchange for giving gubmint parasites an excuse to grab more power and control of the economy.
I didn't see any well intentioned part of it.
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