"Power To The People" Iceland Edition......

I expect that hand in hand with a rising Sovereign Misery Index the times for bailing out anyone without ( hopefully non violent ) brewing tensions & extreme political backlash are at least getting tougher (outside the US ;-) ..... Needless to say that i largely agree with the following quote from Mish... Iceland has a good chance to nagotiate a much better deal after the referendum......

Ich denke das Hand in Hand mit einem steigenden Sovereign Misery Index die Zeiten der "bedenkenlosen" Bailouts ( Ausnahme selbstredend die USA ;-) ohne "größeren" öffentlichen Widerstand ( hoffentlich weiterhin gewaltfrei ) nicht mehr ohne weiteres ohne politische Folgen durchgewunken werden können... Überflüssig zu erwähnen das ich größtenteils mit dem nachfolgenden Fazit von Mish übereinstimme..... Ich jedenfalls wäre ebenfalls erbost für Kunden, die wegen eines minimalen Zinsvorteiles oftmals mit gewaltigen Summen zu Kaupthing & Co gewechselt sind, jetzt die Zeche zu zahlen...... Gehe jede Wette ein das Island nachdem das Referendum stattgefunden hat einen deutlich besseren Deal aushandeln kann und wird......

Iceland's President Effectively Tells UK "Go To Hell" - Hooray For Iceland Mish

Congratulations to Iceland for figuring out that it is better to suffer a credit rating downgrade than to torture its citizens for a decade or longer Iceland may have other problems but at least that one was resolved (hopefully), the quick and painless way.

And that should have been the model for US banks as well. The stockholders and bondholders should be the first ones wiped out.

Instead Bush started and Obama continued with a policy to punish the innocent to bail out the wealthy, leaving the average taxpayer deep in the hole, against the clear will of the majority.

Photo Gallery: Iceland's Deeply Unpopular Payback Der Spiegel

WSJ Iceland's president vetoed a bill to reimburse the U.K. and the Netherlands for bailing out depositors of a failed Icelandic bank, throwing into question the international plan to rescue the island nation's banks and casting doubts on its bid to join the European Union.

President Ólafur Ragnar Grímsson on Tuesday cited massive public opposition in his decision to reject the bill, which was approved in late December by the Icelandic parliament after months of wrangling.

Iceland's president is the head of state, but rarely wields real executive power.

The veto was only the second time since Iceland's independence from Denmark in 1944 that a president used that authority.

Under Iceland's constitution, the bill -- which calls for nearly $6 billion in repayment ( The money represents 40 per cent of the country's gross domestic product via Times Online, see also Wikipedia ) over 15 years, plus interest -- will be put to a public referendum.

Opinion polls suggest it has little chance. ( 70% against )

But without the payback, Iceland may lose or delay access to badly needed bailout money from the International Monetary Fund and Nordic neighbors. The IMF has approved $2.1 billion in

British and Dutch authorities were stern. The U.K. Treasury said Britain "expects Iceland to live up to its obligations."

"We are very disappointed about the decision," said a Dutch finance ministry spokesman. "Iceland has the obligation to pay back the money."

Almost since the onset of the financial-system collapse in October 2008, Icelanders have blamed a cadre of greedy bankers for turning a prosperous nation into an international economic pariah.

There is strong resistance to piling debt on ordinary citizens to undo the bankers' mess. The bill would have seen Iceland repay the U.K. £2.35 billion ($3.79 billion) and the Netherlands [euro €1.32 billion ($1.89 billion) over 15 years.

That amounts to nearly $20,000 for each of the 300,000 Icelanders.

The October 2008 collapse of one bank, Landsbanki Islands, triggered the trouble.

Hundreds of thousands of British and Dutch depositors, wooed by high interest rates, had placed money with Landsbanki through an Internet arm operating in those countries called Icesave

Under European financial rules, Iceland was required to maintain deposit insurance for those customers, but the collapse of all three of the island's big banks swamped the tiny insurance program. Britain and the Netherlands stepped in to cover their own citizens, and then demanded the money back from Iceland.

Eiríkur Svavarsson, a spokesman for InDefence, a group of Icelanders that organized the petition, said the country would honor its debts but would do so "in line with its economic strength."

It isn't clear how badly Mr. Grímsson's veto will disrupt the international aid on which Iceland depends. The IMF has said its funding isn't directly tied to an Icesave resolution, but notes that other lenders have made that condition, and it is reluctant to put money forward if others don't.

After the veto, Fitch Ratings cut Iceland's long-term foreign-currency credit rating to junk and said the future outlook was negative. Fitch also cut the long-term local-currency rating to BBB-plus.

NYT

But the presidential rebuke is being described as a momentous decision for Iceland. It also highlights a widening rift between European governments — pressed by bond investors, ratings agencies and the International Monetary Fund to cut budgets and shrink deficits — and their recession-battered citizenry.

Late last month, the constitutional court in Latvia vetoed a move by the government there to cut pensions in line with an I.M.F.-sponsored austerity package. That development threatens the I.M.F. agreement and the country’s ties with foreign creditors.

Governments in Ireland, Greece and even Britain are also finding it difficult to satisfy both bond investors and voters

> I highly recommend to read the official declaration..... Well said!

> Empfehle sich die offizielle Deklaration im Wortlaut durchzulesen..... Klasse und einleuchtend logisch!

Ice Land Declaration

> Here a very good clip how from 2008 how Iceland got into deep deep troubles.....

> Hier ein sehenswerter Clip aus dem Jahr 2008 der schön aufzeigt wie Island in den Abgrund stürzen konnte.....

> I just couldn´t resist to post this Kaupthing Bank commercial..... You cannot make this up...... Enjoy if you are not an Icelander.....

> Kann mir nicht verkneifen nochmal die inzwischen berühmte Werbung der Kaupthing Bank zu bringen..... Tragisch genial! Für alle die nicht Isländer sicher ein Vergnügen......



H/T Ultimi Barbarorum

Iceland "The Dark Side Of Green Energy"

I stumbled across the follwing map via Paul Kedrosky and i think it makes up for an interesting weekend reading. More on this topic from Saving Iceland & Renewable energy in Iceland Wikipedia

Ich bin kürzlich beim tagtäglichen Besuch von Paul Kedrosky´s Blog auf die nachfolgende Karte gestoßen und denke das dies einen nachdenklichen Blick wert sein sollte. Mehr zu diesem Thema gibt es auf Saving Iceland & Renewable energy in Iceland Wikipedia

So keep the following maps in mind when you here Alcoa & Co praising their lowered cost base or news like this....

Man sollte die nachfolgenden Karten im Hinterkopf behalten wenn man vermeintliche Jubelmeldungen wie die folgende oder Hinweise von Alcoa & Co auf die deutlich verbesserten Kostenbasis Ihrer Aluschmelzen vorgesetzt bekommt....

Iceland is the first country in the world to create an economy generated through industries fueled by renewable energy, and there is still a large amount of untapped hydroelectric energy in Iceland.

The Energy Master Plan For Iceland via Saving Iceland

Gigantic Version

Map of current and planned power dams in Iceland via Saving Iceland

Gigantic Version

But with news like Landsvirkjun’s Credit Rating in the ‘Trash’ – The Company Owes 250 Million Dollars ( Landsvirkjun is the national electricity company of the Republic of Iceland and runs eleven power plants, mostly hydro-power plants and steam-powe plants ) there is a good chance that the financial crises that hit Iceland brutally will lead to much less environmental damage..... This all on top of the fact that the world is already awash in excess aluminium capacity.......

Dank solcher Nachrichten ( siehe Landsvirkjun’s Credit Rating in the ‘Trash’ – The Company Owes 250 Million Dollars / Landsvirkjun ist der staatliche Enerhieversorger der fast alle Wasser und Geothermekraftwerke betreibt ) darf Island das ja wie kein zweites Land brutal von der Finanzkrise erwischt worden ist darauf hoffen das die Finanzkrise hier zumindest Ihr Gutes hat...... Zudem bleibt zu hoffen das auch Alcoa & Co eingeshene haben das dank massivster Überkapazitäten neue Investitionen auf Sicht wenig Sinn machen......

Dreamland Homepage

Dreamland is a film about exploitation of natural resources and as Icelanders have learned clean energy does not come without consequence. Iceland is a country blessed with an abundance of clean, renewable, hydro-electric and geothermal energy. Clean energy brings in polluting industry and international corporations.

Dreamland tells the story of a nation with abundance of choices gradually becoming caught up in a plan to turn its wilderness and beautiful nature into a massive system of hydro-electric and geothermal power plants with dams and reservoirs, built to power the increasing heavy industry that will soon make Iceland the largest aluminum smelter in the world.

Dreamland Trailer

Related to this topic i want to link to my former post Yann Arthus-Bertrand - HOME for probably one of the best movies abouth our planet earth & the environmental effects caused from mankind...

Passend zum Thema nochmal der Hinweis auf Yann Arthus-Bertrand - HOME. Meiner Meinung nach die beste Ansammlung von Aufnahmen in Sachen Erde und dem wenig erfreulichen Einfluß den wir auf die Umwelt ausüben.....

German Banks Are On The Hook For $ 21.Billion Or 30% Percent Of Icelands Forgein Debt

This is the number based on the end of june.... And taking the judgement & brilliance from the German bankers into account i assume this number isn´t any lower right now....... Nice to see that you can ruin your banking system with having a flat property market during the past decade...... Just brilliant!

Diese Zahl stammt aus den Daten von Ende Juni.....Nach den Erfahrungen mit deutschen Bänkern ist aber mit Sicherheit davon auszugehen das trotz genügend alarmierender Vorzeichen diese Summe wohl aktuell nicht wesentlich geringer ist.......Es ist erschütternd wie man es schaffen kann mit dem weltweit wohl einzigen stagnierenden Immobilienmarkt binnen der letzten 10 Jahre sein Bankensystem ähnlich in den Boden zu stampfen wie es die Bubbleländer geschafft haben...... Eine wahre MEISTERLEISTUNG auch von der Bankenaufsicht und den mit Politikern besetzten Aufsichtsräten (besonders bei den Landesbanken ) die jetzt mit Sicherheit der Steuerzahler ausbaden darf! Nimmt man den isländischen Notrenbänker beim Wort und es sind bestenfalls 15% an Rückzahlungen zu erwarten ........Hier die deutschen Versionen Isländer schulden deutschen Banken gut 16 Milliarden Euro FAZ, Größtes Islandrisiko bei deutschen Banken FTD

German Banks Now Face Big Losses From Their Misadventures in Iceland WSJ
German banks have bled billions of euros in the U.S. subprime-mortgage debacle. Now they face another potentially big bill from a costly misadventure in Iceland.

The Icelandic bet is the latest illustration of how German banks -- including once-sleepy regional lenders -- ranged far and wide in recent years in search of yield to escape stiff competition and low profit margins on their home soil.

By June of this year, before Iceland's spectacular financial meltdown, German financial institutions had lent $21.3 billion to Icelandic borrowers, according to the Bank for International Settlements. That was well over a quarter of all foreign lending in Iceland, and roughly five times as much as Britain, the next-largest creditor country.

Iceland's three largest banks -- and the country's main debtors -- collapsed this month, plunging the country into crisis. Kaupthing Bank, Iceland's biggest, missed a coupon payment this week on 50 billion yen ($512 million) of bonds in Japan, heightening default concerns.

Blaming fallout from the U.S. financial crisis, lawmakers in Berlin approved a €500 billion ($642 billion) rescue package for German banks on Oct. 17. Bayerische Landesbank, a state-owned regional lender, became the first German bank to raise its hand for help this week, requesting a €5.4 billion capital injection from the federal government.

BayernLB, as the bank also is known, wrote down €2.6 billion in investments during the first half of the year, much of them tied to soured American subprime debt. But it also disclosed this week that it has €1.5 billion in credit exposure to Iceland, a large chunk of which it might also have to write down. ( more from Bloomberg BayernLB to Seek EU5.4 Billion From German Government )

That lack of clarity highlights the lack of transparency in today's global financial markets -- and why it may take a long time for banks to fully resume lending to each other, even as authorities in Germany and other countries take aggressive steps to restore confidence. Germany's financial-services regulator said Thursday new accounting rules aimed at giving banks and insurers more leeway in valuing certain assets should boost earnings at the country's biggest banks by up to €1 billion in the third quarter.

Now foreign bets that boosted profits are coming back to haunt many banks. Germany's five largest private-sector banks had €12.9 billion in markdowns on securities during the last half of 2007 and first half of 2008, according to Standard & Poor's. Many of the losses are tied to U.S. investments.

But some of the country's state-owned regional lenders, or landesbanken, also have bloodied their noses after venturing abroad in search of juicier yields. Originally created to channel credit to their home states, some became aggressive players in international capital markets in recent years. They also had a lot of money to spend after raising money on the cheap before 2005, when government guarantees on their new debt issuance expired.

"There's not enough low-risk business that can feed all these banks," said Johannes Wassenberg, a European bank credit analyst in London with the ratings agency Moody's.

Two small and relatively unknown German banks, SachsenLB and IKB Deutsche Industriebank AG, became the country's first two victims of the U.S. subprime crisis last year after stocking up on asset-backed securities and then failing to secure enough liquidity to stay afloat.

Deutsche Bank AG and Commerzbank AG, Germany's two largest banks by assets, declined to say how much exposure they have to Iceland. Landesbank Baden-Württemberg, or LBBW, the country's largest landesbank, also declined to say how much Iceland exposure it holds.

HSH Nordbank, a smaller landesbank, said Thursday it had exposure of "low three-digit-million" euros to Iceland. Another landesbank, WestLB, said its exposure to Iceland was "less than €100 million." A third landesbank, Helaba, said its Iceland exposure was below €10 million.

David Oddsson, Iceland's central bank chief, recently estimated that foreign creditors would "unfortunately only get 5, 10, 15% of their laims" on the country's three largest banks.