The Isle That Rattled the World [Iceland Created a Vast Bubble]

Wall Street Journal (Weekend Edition) ^ | 27 December 2008 | CHARLES FORELLE

[COBOL2Java]

REYKJAVIK, Iceland -- A boy charged to the front of an angry crowd here recently and tossed a carton of skyr, a popular local yogurt-like snack, at the Parliament building. It splattered on the rough-hewn stone.

He and thousands of Icelanders were protesting one of the strangest economic failures of the global financial crisis. This past fall, every bank that matters in this tiny nation -- that is, all three of them -- failed. Iceland's currency, the krona, became worthless beyond its shores. The country's financial system stopped working.

"We are pissed off at the government," said one young man, pausing between fusillades of eggs. A roll of toilet paper arced across the Nordic sky. Voices of Anger, Shame in Iceland

In the whipping wind, a woman held a cardboard with a screaming mouth on Nov. 21.

Iceland is an extreme casualty of an era in which it became extraordinarily easy to borrow money. But it was more than that: An examination of the nation's banking system, which collapsed over about 10 days this autumn, reveals the degree to which Iceland was one of the international financial bubble's most enthusiastic players. Home to fewer people than Wichita, Kan., Iceland became so leveraged and so deeply intertwined with the global financial infrastructure that its collapse has rattled the world from Tokyo to California to the Middle East.

[DeaconBenjamin]

When the dollar tanks like the Icelandic Kroner, our protests are going to be a tad bit uglier. Like, burning cities and heads on pikes.

You've been PINGED.

[Travis McGee]

Sitting in an Icelandic natural hot tub with an Icelandic honey will be a good way to spend the Greater Depression.

Washing down fish smorbrods with ice cold aqavit.

[PghBaldy]

In Japan and Hong Kong, bond buyers got stuck holding all-but-worthless debt. In Beverly Hills, a real-estate developer was forced to default after teaming up with an Icelandic bank to build condos near Wilshire Boulevard. A German regional lender, Bayerische Landesbank, suffered big losses on its Icelandic investments contributing to its need for a €30 billion ($42 billion) bailout package Although I enjoyed your reply. We are all interconnected, but in the present situation, not nec. a goo thing.

[bill1952]

Iceland's default is the tenth part of a fleabite.

Back when clintoony was running the show and Russia defaulted on it's entire bond debt - prolly hundreds of times greater than Iceland's - and then closed the banks to make sure that investors like me could not remove anything ever until the debt was repudiated, there was nary a peep from the MSM.

Even though I and like investors were outright swindled.
Thank you for your reply. - bill

[DuncanWaring]

Eponymous Ping.