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Beware: This article is filled with factual errors. I was making a list as I went along, and when I afterwards read the comments section I realized I had overlo

Beware: This article is filled with factual errors. I was making a list as I went along, and when I afterwards read the comments section I realized I had overlooked many more. That does not by itself affect the validity of the author's overarching thesis, but if someone can't be bothered to get their basic facts straight (e.g. Iceland's EU membership status), it casts serious doubt on their ability to perform the much more subtle and exacting task of sociopolitical analysis on the reader's behalf. The article did raise several points about which I was previously unaware; I will pursue them through other sources. I'm unsurprised that the IMF pushed back against the plan to default on the loans. The IMF usually props up failing economies and forces legislation that lets foreign investors reduce or withdraw their local investments. Love it or hate it (and I incline towards the latter), putting your balls in the vice like that is standard operating practice for them--it's what they do. I was surprised to learn (and until it is confirmed elsewhere, I remain skeptical) that the UK and Holland threatened to freeze the funds of all Icelander-held bank accounts.

steipete 15y ago
"To clarify the EU point; Iceland is an EU Candidate country along with Croatia, Former Yugoslav Republic of Macedonia, Montenegro and Turkey."
- psykotic 15y ago
  Is that the author's own clarification? That lessens my confidence in him. Yes, it is a EU candidate country, but its formal ties to the EU (EEA, Schengen, etc) have been much closer and longer-lasting than those of any other candidate country. Listing Iceland in that group gives the wrong impression.
  - arethuza 15y ago
    Indeed, my understanding is that the only reason that Iceland wasn't a member of the EU before was that they didn't want to be until recently. For example, compare: http://en.wikipedia.org/wiki/Accession_of_Iceland_to_the_European_Union http://en.wikipedia.org/wiki/Accession_of_Iceland_to_the_Eur... and http://en.wikipedia.org/wiki/Accession_of_Turkey_to_the_European_Union http://en.wikipedia.org/wiki/Accession_of_Turkey_to_the_Euro... Personally, I would love to see Turkey in the EU but they have got a lot more work to do than somewhere like Iceland.
typicalrunt 15y ago
This is a naive question but why did Icelandic banks allow such a bubble to happen? I realize it's not easy to see the forest from the trees, but isn't there some point at which banks start to see that they are taking on too much debt?
- rorrr 15y ago
  They got greedy and invested into the real estate bubble.
- psykotic 15y ago
  I'm totally not qualified to talk about this, but since I'm just writing an off-the-cuff comment on a website, I can at least give you my impression. Don't take my word for it, I'm probably full of shit. Keep in mind that the debt here means that depositors gave them money in the usual bank arrangement. When you deposit money with your bank, they don't let the money sit in a physical vault or the digital equivalent. They put as much of it as possible to work. The Icelandic banks had used the money to make diversified investments across Europe. I'm from Denmark, and in this period there were several noteworthy Icelandic investments in major Danish companies, and that was the pattern all over northern Europe. It was a far more responsible and effective investment strategy than what was generally followed by the Irish banks, who injected the bulk of their investment funds back into the Irish economy, especially in the real estate market, thereby artificially inflating and extending the Irish bubble. > I realize it's not easy to see the forest from the trees, but isn't there some point at which banks start to see that they are taking on too much debt? They could have hedged against overall market drops much better than they did. They put too much into real estate. Etc. But when there is a rapid and systematic dive in confidence and all your major depositors make a simultaneous run on the bank, you are pretty much screwed. They'd have needed to bet a sizable chunk of their funds against the market as a whole to cover that eventuality. But if everyone had done that, things would quickly have gone nonlinear, so it's unclear at least to me what they should have done, given their mandate to invest the money on hand. The root mistake was probably taking on too many easy-come, easy-go customers who'd want to make a quick escape in the event of a down-turn.
  - 15y ago
watmough 15y ago
"I was surprised to learn (and until it is confirmed elsewhere, I remain skeptical) that the UK and Holland threatened to freeze the funds of all Icelander-held bank accounts." Here's some indication that all the assets in the UK of Landsbanki, were seized under terror laws. http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aXjIA5NzyM5c http://www.bloomberg.com/apps/news?pid=newsarchive&sid=a...
- psykotic 15y ago
  Thanks, that makes more sense. The article gave a different impression: > The British government threatened to freeze Icelander savings and checking accounts. Unless I'm totally daft, this is saying the British government was threatening to freeze UK-based bank accounts of individual Icelanders. Chalk up another factual inaccuracy. I'm not well versed in this stuff, so it's a really bad sign when I can stumble over errors and inaccuracies in damn near every other paragraph.
arethuza 15y ago
The UK used anti-terrorist legislation to freeze Icelandic bank accounts: http://news.bbc.co.uk/1/hi/uk_politics/7688560.stm http://news.bbc.co.uk/1/hi/uk_politics/7688560.stm At least we're not fighting about fish this time.
perfunctory 15y ago
Who cares if Iceland is a member or almost a member. That's not the point of the article. Can we discuss the main point please, that is a country's population refusing to bail out the criminals of the financial sector.
- arethuza 15y ago
  I find that if an article has a glaring factual error in its first paragraph it does rather undermine its overall credibility.
  - perfunctory 15y ago
    Yes, in a way. But I don't think in this case it matters that much. It's like saying: hey, look at that politician, he smoked weed in college, now this is supposed to undermine his overall credibility. Who cares.
    - arethuza 15y ago
      No it isn't. The lack of fact-based critical thinking is precisely what causes things like the 2008 financial crisis. If an argument is riddled with factual errors I cannot give any faith in its conclusion even if I am generally supportive of them.
    - tripa 15y ago
      I don't think it is. Your politician's college was a long time ago, he as a man would have had time to change. The article's mistakes are right now; there's little reason to believe the sloppy fact checking improves right between the first paragraph and the second.
- psykotic 15y ago
  You go right ahead, but I'm not going to discuss the article's main point until I've had time to read up on the relevant background from other sources. Facts are not ornamental adjoints to an analysis but the very stuff out of which it is made. Besides, there were other inaccuracies. The article claimed that the British and Dutch governments threatened to freeze assets of Icelanders when it seems the only target was assets directly owned by Landsbanki. That's still extraordinary, especially seeing it was prosecuted under the guise of anti-terror, but it is very different in fact and substance from what was claimed.
deleted 15y ago
[deleted]

steipete 15y ago

"To clarify the EU point; Iceland is an EU Candidate country along with Croatia, Former Yugoslav Republic of Macedonia, Montenegro and Turkey."

psykotic 15y ago
Is that the author's own clarification? That lessens my confidence in him. Yes, it is a EU candidate country, but its formal ties to the EU (EEA, Schengen, etc) have been much closer and longer-lasting than those of any other candidate country. Listing Iceland in that group gives the wrong impression.
- arethuza 15y ago
  Indeed, my understanding is that the only reason that Iceland wasn't a member of the EU before was that they didn't want to be until recently. For example, compare: http://en.wikipedia.org/wiki/Accession_of_Iceland_to_the_European_Union http://en.wikipedia.org/wiki/Accession_of_Iceland_to_the_Eur... and http://en.wikipedia.org/wiki/Accession_of_Turkey_to_the_European_Union http://en.wikipedia.org/wiki/Accession_of_Turkey_to_the_Euro... Personally, I would love to see Turkey in the EU but they have got a lot more work to do than somewhere like Iceland.

typicalrunt 15y ago

This is a naive question but why did Icelandic banks allow such a bubble to happen? I realize it's not easy to see the forest from the trees, but isn't there some point at which banks start to see that they are taking on too much debt?

rorrr 15y ago
They got greedy and invested into the real estate bubble.
psykotic 15y ago
I'm totally not qualified to talk about this, but since I'm just writing an off-the-cuff comment on a website, I can at least give you my impression. Don't take my word for it, I'm probably full of shit. Keep in mind that the debt here means that depositors gave them money in the usual bank arrangement. When you deposit money with your bank, they don't let the money sit in a physical vault or the digital equivalent. They put as much of it as possible to work. The Icelandic banks had used the money to make diversified investments across Europe. I'm from Denmark, and in this period there were several noteworthy Icelandic investments in major Danish companies, and that was the pattern all over northern Europe. It was a far more responsible and effective investment strategy than what was generally followed by the Irish banks, who injected the bulk of their investment funds back into the Irish economy, especially in the real estate market, thereby artificially inflating and extending the Irish bubble. > I realize it's not easy to see the forest from the trees, but isn't there some point at which banks start to see that they are taking on too much debt? They could have hedged against overall market drops much better than they did. They put too much into real estate. Etc. But when there is a rapid and systematic dive in confidence and all your major depositors make a simultaneous run on the bank, you are pretty much screwed. They'd have needed to bet a sizable chunk of their funds against the market as a whole to cover that eventuality. But if everyone had done that, things would quickly have gone nonlinear, so it's unclear at least to me what they should have done, given their mandate to invest the money on hand. The root mistake was probably taking on too many easy-come, easy-go customers who'd want to make a quick escape in the event of a down-turn.
- 15y ago

watmough 15y ago

"I was surprised to learn (and until it is confirmed elsewhere, I remain skeptical) that the UK and Holland threatened to freeze the funds of all Icelander-held bank accounts." Here's some indication that all the assets in the UK of Landsbanki, were seized under terror laws. http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aXjIA5NzyM5c http://www.bloomberg.com/apps/news?pid=newsarchive&sid=a...

psykotic 15y ago
Thanks, that makes more sense. The article gave a different impression: > The British government threatened to freeze Icelander savings and checking accounts. Unless I'm totally daft, this is saying the British government was threatening to freeze UK-based bank accounts of individual Icelanders. Chalk up another factual inaccuracy. I'm not well versed in this stuff, so it's a really bad sign when I can stumble over errors and inaccuracies in damn near every other paragraph.

arethuza 15y ago

The UK used anti-terrorist legislation to freeze Icelandic bank accounts: http://news.bbc.co.uk/1/hi/uk_politics/7688560.stm http://news.bbc.co.uk/1/hi/uk_politics/7688560.stm At least we're not fighting about fish this time.

perfunctory 15y ago

Who cares if Iceland is a member or almost a member. That's not the point of the article. Can we discuss the main point please, that is a country's population refusing to bail out the criminals of the financial sector.

arethuza 15y ago
I find that if an article has a glaring factual error in its first paragraph it does rather undermine its overall credibility.
- perfunctory 15y ago
  Yes, in a way. But I don't think in this case it matters that much. It's like saying: hey, look at that politician, he smoked weed in college, now this is supposed to undermine his overall credibility. Who cares.
  - arethuza 15y ago
    No it isn't. The lack of fact-based critical thinking is precisely what causes things like the 2008 financial crisis. If an argument is riddled with factual errors I cannot give any faith in its conclusion even if I am generally supportive of them.
  - tripa 15y ago
    I don't think it is. Your politician's college was a long time ago, he as a man would have had time to change. The article's mistakes are right now; there's little reason to believe the sloppy fact checking improves right between the first paragraph and the second.
psykotic 15y ago
You go right ahead, but I'm not going to discuss the article's main point until I've had time to read up on the relevant background from other sources. Facts are not ornamental adjoints to an analysis but the very stuff out of which it is made. Besides, there were other inaccuracies. The article claimed that the British and Dutch governments threatened to freeze assets of Icelanders when it seems the only target was assets directly owned by Landsbanki. That's still extraordinary, especially seeing it was prosecuted under the guise of anti-terror, but it is very different in fact and substance from what was claimed.

deleted 15y ago

[deleted]