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You are so wrong on so many levels that it's scary. > Iceland banks didn't collapse, the government nationalized them to prevent their collapse. (Edit: as anot

You are so wrong on so many levels that it's scary. > Iceland banks didn't collapse, the government nationalized them to prevent their collapse. (Edit: as another poster mentions a portion of the debt was paid down by other states too. Again, that's a detail, not a fundamental difference). It is a fundamental difference. When Iceland took over its banks, it basically said: your deposits are insured if you are a tax-payer. Customers living elsewhere, share holders and (non-Icelandic?) bond holders were wiped out; they were owed something one day, zero the next, and it matters little to Icelanders who may have generously picked up the tab -- they didn't. The banks were recapitalized when needed, and a few bank execs got thrown in jail for good measure. I beg to ask how this is in any way similar to what happened in the US, the UK or Ireland. Or Greece, for that matter.

fleitz 13y ago
FDIC insured accounts were protected, as for letting banks fail and wiping out shareholders... did you hold any bearstearns stock? Also, Bernie Madoff went to jail...
- grey-area 13y ago
  Bernie Madoff was not a bank exec and was not involved in or the cause of the financial crisis, he was just exposed by it as the tide went out. All the devils are here has a nice history of this financial crisis, I thought, and no-one who was involved in the fraud which caused the collapse of AIG, for example, was convicted, though there have been some investigations, AFAIK. Also Iceland defaulted on its external debt and only protected national interests - the UK and US didn't really do anything similar, they have chosen to inflate their way out of debt instead.
  - arethuza 13y ago
    I don't think it was fraud that caused AIG problems, it was making really bad business decisions. Meanwhile, Joseph Cassano the guy at AIG FP London responsible for a lot of the problems walked away with at least $280 million http://www.telegraph.co.uk/finance/financialcrisis/3225213/AIG-trail-leads-to-London-casino.html http://www.telegraph.co.uk/finance/financialcrisis/3225213/A...
    - grey-area 13y ago
      Well, GS knowingly sold AIG junk CDOs days before the collapse, while shorting those same CDOs to make money on them. I'd call that fraud. I think they were fined less than they made on the deal, and no-one was punished. Of course AIG deserves blame, but so do those who tricked them into buying junk. http://online.wsj.com/news/articles/SB10001424052748704201404574590453176996032 http://online.wsj.com/news/articles/SB1000142405274870420140...
      - arethuza 13y ago
        In Liar's Poker Michael Lewis describes his time as a bond salesman for Salomon Brothers and the realization that everything he was selling was junk, after all, it the bonds that he was selling were a good investment why would Salomon Brothers be selling them? [Edit: He also describes the right of passage for new bond salesmen - when you bankrupt your first client....]
      - rayiner 13y ago
        > Well, GS knowingly sold AIG junk CDOs days before the collapse, while shorting those same CDOs to make money on them. I'd call that fraud. That's not fraud. It's probably unethical, but businesses selling customers products they know are shit is more or less legal, or at most the subject of a civil action by the purchaser. I mean, look at the software industry. How many software companies sell products that are buggy crap, that they know are buggy crap? And when it comes to investments, that basic dynamic is at the heart of a lot of sales. If I think this investment is a great deal that's going to just go up and up, why would I sell it to you? I'm willing to entertain the idea that what GS did crossed the line in terms of the standard of ethics people expect of investment professionals, which maybe should be higher than for businesses generally. Maybe we should put such standards in place and make them enforceable,[1] but it wouldn't be fair to throw people in jail for what they did before those standards were in place. [1] For example, it would be punishable ethical breach for a lawyer to represent a client then take a financial position adverse to the client's interests.
        tptacek 13y ago
TacticalCoder 13y ago
Are you sure non-Iceland people were wiped out? I know someone who had an account at Kauphting and, after freaking out for months he eventually got all his money back. Here, for example, in english it says: "Credit agricole and Keytrade save Kauphting's client" and explains how the 21 000 belgians who had accounts at Kauphting didn't lose a dime. That's far from being "wiped out". http://www.express.be/sectors/fr/ict/le-crdit-agricole-et-keytrade-sauvent-les-clients-de-kauphting/101998.htm http://www.express.be/sectors/fr/ict/le-crdit-agricole-et-ke... Or by "elsewhere" did you mean "Outside the EU"? (honest question...)
- ddebernardy 13y ago
  > Are you sure non-Iceland people were wiped out? The non-tax paying, non-residents? Yes. They were subsequently bailed out by foreign governments and/or entities, but from Iceland's standpoint — which is the important one when it comes to their taxpayers' finances — they were wiped out. That is why the UK and Holland, in particular, were so pissed at Iceland and threatened to block EU-entry negotiations at one point. They spectacularly footed the bill, and I presume so did other countries. They then sent it to Iceland. Iceland, on its end, raised its middle finger. Slowly. Not just once, either. The politicians tried to sneak the debt back in to be accommodating. And twice, a popular vote was organized and the referendum yielded a big fat no by a massive landslide. http://en.wikipedia.org/wiki/Icesave_dispute http://en.wikipedia.org/wiki/Icesave_dispute Credit Agricole, btw, was bailed out using US-funds funneled by Bernanke's largess through AIG, rather than by France: http://money.cnn.com/2009/03/07/news/companies/aig.fortune/index.htm http://money.cnn.com/2009/03/07/news/companies/aig.fortune/i...
joe_the_user 13y ago
If you look in Wikipedia article, you will notice a variety of bank shares were also guarantee because that too was necessary to prevent the financial system from collapsing. Icelanders, Americans and Greek have all experienced a sharp reduction in their standard of living (Icelanders, like Greeks, experienced this through a large currency devaluation). Both Icelanders and Americans live more or less under the same system that existed before the crisis.

fleitz 13y ago

FDIC insured accounts were protected, as for letting banks fail and wiping out shareholders... did you hold any bearstearns stock? Also, Bernie Madoff went to jail...

grey-area 13y ago
Bernie Madoff was not a bank exec and was not involved in or the cause of the financial crisis, he was just exposed by it as the tide went out. All the devils are here has a nice history of this financial crisis, I thought, and no-one who was involved in the fraud which caused the collapse of AIG, for example, was convicted, though there have been some investigations, AFAIK. Also Iceland defaulted on its external debt and only protected national interests - the UK and US didn't really do anything similar, they have chosen to inflate their way out of debt instead.
- arethuza 13y ago
  I don't think it was fraud that caused AIG problems, it was making really bad business decisions. Meanwhile, Joseph Cassano the guy at AIG FP London responsible for a lot of the problems walked away with at least $280 million http://www.telegraph.co.uk/finance/financialcrisis/3225213/AIG-trail-leads-to-London-casino.html http://www.telegraph.co.uk/finance/financialcrisis/3225213/A...
  - grey-area 13y ago
    Well, GS knowingly sold AIG junk CDOs days before the collapse, while shorting those same CDOs to make money on them. I'd call that fraud. I think they were fined less than they made on the deal, and no-one was punished. Of course AIG deserves blame, but so do those who tricked them into buying junk. http://online.wsj.com/news/articles/SB10001424052748704201404574590453176996032 http://online.wsj.com/news/articles/SB1000142405274870420140...
    - arethuza 13y ago
      In Liar's Poker Michael Lewis describes his time as a bond salesman for Salomon Brothers and the realization that everything he was selling was junk, after all, it the bonds that he was selling were a good investment why would Salomon Brothers be selling them? [Edit: He also describes the right of passage for new bond salesmen - when you bankrupt your first client....]
    - rayiner 13y ago
      > Well, GS knowingly sold AIG junk CDOs days before the collapse, while shorting those same CDOs to make money on them. I'd call that fraud. That's not fraud. It's probably unethical, but businesses selling customers products they know are shit is more or less legal, or at most the subject of a civil action by the purchaser. I mean, look at the software industry. How many software companies sell products that are buggy crap, that they know are buggy crap? And when it comes to investments, that basic dynamic is at the heart of a lot of sales. If I think this investment is a great deal that's going to just go up and up, why would I sell it to you? I'm willing to entertain the idea that what GS did crossed the line in terms of the standard of ethics people expect of investment professionals, which maybe should be higher than for businesses generally. Maybe we should put such standards in place and make them enforceable,[1] but it wouldn't be fair to throw people in jail for what they did before those standards were in place. [1] For example, it would be punishable ethical breach for a lawyer to represent a client then take a financial position adverse to the client's interests.
      - tptacek 13y ago

TacticalCoder 13y ago

Are you sure non-Iceland people were wiped out? I know someone who had an account at Kauphting and, after freaking out for months he eventually got all his money back. Here, for example, in english it says: "Credit agricole and Keytrade save Kauphting's client" and explains how the 21 000 belgians who had accounts at Kauphting didn't lose a dime. That's far from being "wiped out". http://www.express.be/sectors/fr/ict/le-crdit-agricole-et-keytrade-sauvent-les-clients-de-kauphting/101998.htm http://www.express.be/sectors/fr/ict/le-crdit-agricole-et-ke... Or by "elsewhere" did you mean "Outside the EU"? (honest question...)

ddebernardy 13y ago
> Are you sure non-Iceland people were wiped out? The non-tax paying, non-residents? Yes. They were subsequently bailed out by foreign governments and/or entities, but from Iceland's standpoint — which is the important one when it comes to their taxpayers' finances — they were wiped out. That is why the UK and Holland, in particular, were so pissed at Iceland and threatened to block EU-entry negotiations at one point. They spectacularly footed the bill, and I presume so did other countries. They then sent it to Iceland. Iceland, on its end, raised its middle finger. Slowly. Not just once, either. The politicians tried to sneak the debt back in to be accommodating. And twice, a popular vote was organized and the referendum yielded a big fat no by a massive landslide. http://en.wikipedia.org/wiki/Icesave_dispute http://en.wikipedia.org/wiki/Icesave_dispute Credit Agricole, btw, was bailed out using US-funds funneled by Bernanke's largess through AIG, rather than by France: http://money.cnn.com/2009/03/07/news/companies/aig.fortune/index.htm http://money.cnn.com/2009/03/07/news/companies/aig.fortune/i...

joe_the_user 13y ago

If you look in Wikipedia article, you will notice a variety of bank shares were also guarantee because that too was necessary to prevent the financial system from collapsing. Icelanders, Americans and Greek have all experienced a sharp reduction in their standard of living (Icelanders, like Greeks, experienced this through a large currency devaluation). Both Icelanders and Americans live more or less under the same system that existed before the crisis.