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Mishkin On Iceland: "Nothing Is F*#&ed Here Dude"
Now that even Le Big Mac has hightailed it out of Reykjavik, the locals, forever deprived of $0.99 cheeseburgers and anything resembling a stable currency (a good advance look at what the U.S. can look forward to, although at least California makes some happy, Prozacked cows now and then), are at least owed some levity (even if it as their expense). And when one looks for matters dealing with jocularity (and/or gross, flagrant incompetence), one really needs to look no further than the Federal Reserve. In this case, former Fed director Fred Mishkin will suffice, who in May 2006 penned a report titled "Financial Stability In Iceland."
Some pearls of wisdom from Mishkin's extensive understanding of the (soon to be bankrupt) Icelandic economy:
- Fiscal imbalances are not a problem in Iceland: quite the opposite, with Iceland having an excellent fiscal position with low government net debt (less that 10% of GDP) and a fully funded pension system (with assets amounting to more than 120% of GDP).
- Monetary policy has also been successful in keeping inflation low and near the inflation target, particularly when housing prices are excluded from the inflation measure, as is the case in the United States and the eurozone.
- Research on multiple equilibria suggests that self-fulfilling prophecies are unlikely to occur when fundamentals are strong, as they are in Iceland.
- The analysis in our study suggests that although Iceland's economy does have some imbalances that will eventually be reversed, financial fragility is currently not a problem, and the likelihood of a financial meltdown is low.
- Iceland is an advanced country with high-quality institutions. GDP per capita (adjusted for PPP) ranks fifth highest in the world; longevity is the highest for females and second highest for males; unemployment is almost non-existent and way below the natural rate; net government debt is almost nil, labor force participation among older workers the highest in the world, and of women the highest in the OECD (almost 80%, compared with 56% on average in the OECD).
- Noteworthy among Iceland's country rankings for quality of institutions is that Iceland ranks fifth in economic freedom, firs in terms of the lowest corruption, seventh in terms of competitiveness, first in the percentage of population connected to the Internet (ADSL or ISDN), and the first in terms of
freedom of the press, compared with number 113 for Turkey and 59 for Thailand [and 666th for America].
And of course:
- These rankings are of course sometimes arbitrary, but they clearly illustrate that Iceland is a well run, advanced Nordic country that has little in common with emerging market countries, a fact important to recognize when we start discussing financial stability in the next section.
All this and so much more make up (no pun intended) this laborious, extensive and magnificent piece, which the US taxpayer was promptly invoiced for, and which was 100%, completely and thoroughly wrong. Good thing McDonald's is finally learning the lesson of what it means to make the mistake of believing that the Fed may be right, even once in a while.
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Mishkin has been sent to Siberia in my book. Max Keiser moves up on my list.
Objectivity reigns supreme.
Did you notice that one of the tags was: incompetence? I thought that was awesome.
In keeping with the B.L. refs, someone ought to let this guy know 'life does not stop and start at his convenience the miserable piece of shit.'
Wow, and he only sourced himself 8 times, some original thought obviously went into this....
Pretty much convinces once agains that FED directors are the masterminds behind the rampant financial Terrorism.
And still are.
Well, at least there is an...ahem... honest attribution to " the low corruption " characteristic of the Icelandic political infrastructure.
That oughta' be worth somethin', dammit.
Corruption is low - what happened in Iceland was the result of 20 players.
This bullshit report was basically bought to act as a counterpoint to the sensable people that were trying to tell the useless politians and power players that Iceland was on the way down the drain.
http://www.economicdisasterarea.com/index.php/features/frederic-mishkins...
http://www.economicdisasterarea.com/index.php/uncategorized/mishkin-for-...
Saw this guy on CNBC last year when I still watched. This fool was such a pompous ass giving his interview on a hotel balcony and sporting a high leg cross a la Matt Lauer. He acted like he had all the answers and the reporterette (forget exactly which one) treated him as such. Could you imagine the ego-jousting this guy and Kudlow could have?
“The whole problem with the world is that fools and fanatics are always so certain of themselves, but wiser people so full of doubts.” Bertrand Russell
fantastic citation
if only California could figure out a way to monetize In-N-Out. they might not need the weed.
why one would listen to the feds prognostications is beyond me. why the U.S taxpayer pays for said prognostications is criminal.
Gotta love Rule #3 -Remove housing from the inflation index.
The next report will probably read:
-Deflation concerns are not an issue in Iceland despite a 40% reduction in housing prices since housing prices are not included in any official index-
Better to die in battle and go to Valhalla.
How dare you question Prof. Mishkin, his credentials are impeccable.
And to think his money and banking book is the standard in undergrad monetary policy courses.
I've had him as a teacher. I was quite amazed to see him pictured as an "intellectual powerhouse" in the bbg news that announced he was joining the fed board.
shit! fred, you fuck...you fucked it up! you fucked it up! their lives were in your hands, man!
hvar er the síld Dr. Mishkin?
Let's face it, Banana Ben was right on the money (50-100 billion) in regard with the subprime debacle. He just forgot to mention "daily".
Incompetent at best, complicit fraud at worst. Is there any other option?
Nothing is fucked??? The goddamn plane has crashed into a mountain!
Iceland basically has huge quantities of free (geothermal) energy. They can use it to grow food, drive cars, and heat homes, if they want. They should just disavow all the foreign debt completely and go 100% self-sufficient.
Exactly. This is what Ecuador did (don't be surprised if the Ecuadorian president is found "suicided" or the victim of an "accident" in the near future). A big source of problems and exploitation in the so-called "third world" countries [not to mention the "first world" ones - just take a f--king look around] is loan sharking by the Anglo-Saxon banking cartel.
"Dr. Frederic S. Mishkin is the Alfred Lerner Professor ofBanking and Financial Institutions at the Graduate School ofBusiness, Columbia University. He is also a Research Associateat the National Bureau of Economic Research, a Senior Fellowat the FDIC Center for Banking Research, and past President ofthe Eastern Economic Association."
What a tool.
there you go...his professorial seat was endowed by the greatest usurer in this nation's history. nice.
Jokes off an Iceland Blog
What do the Icelandic banks and an Icelandic nudist have in common?
Their most valuable things are frozen
What is the difference between laxatives and deregulation?
Laxatives result in a fast crap, deregulation in a vast Kreppa.
Here's another one:
Q: What's the difference between a Fed director and an utter and total moron?
A: None.
What the fuck is that supposed to mean? Did nature intend for some of us to be unemployed some of the time consistently? Only a Fed asshole/moron could come up with such nonsense.
+100. Fucking nonsense that is meant to sound authoritative.
Agree, agree again. LMAO.
No frikkin way to vote them out since there is a 1000 trained the same way behind them.
Classic!
When economists such as Mishkin make mistakes, they quit and go back to their tenured hole even though the whole world pays. Why do we trust fools like Mishkin and his buddy Mr Bean? Mankind survived 2 million years without economists, why do we need them now?
Indeed the report has enough warnings about future stability and potential recommendations how to avoide issues. Look at ch. 4 and 5.
Ch. 4.4. :
"Because Iceland's
economy is so small, marginal changes in financial flows as a percentage of the overall flows in
international financial markets can have a huge impact on Icelandic asset prices, and particularly
the exchange rate. If a significant fraction of traders in international financial markets think that
Iceland will be undergoing a financial meltdown, even if fundamentals don not warrant it, they
could create a self-fulfilling prophecy by massively pulling out of Icelandic assets."
http://www.federalreserve.gov/newsevents/speech/mishkin20070117a.htm
"Monetary policy has also been successful in keeping inflation low and near the inflation target, particularly when housing prices are excluded from the inflation measure, as is the case in the United States and the eurozone."
Never understood how the cost of the biggest asset you'll ever buy is not included in the inflation calculation. If my mtg. payment/rent increases how can that not be included?
I like the "well-run Nordic country" like some proximity and cultural sameness to Norway or Sweden will make them okay regardless of fundementals, also it seems to be saying they are good, hearty white people, no problems here. White people are always responsible and pay their bills and are frugal, whiel maybe not Italians and Spanish, but those notherners, they're good stock.
As we see in US, UK, there is nothing inherently less corrupt about established western govt/economies its just that we in US have been on the top, preying on others so we could afford our corruption, and only is startging to really bite us internally. Sweden and Germany banks did Iceland and Latavia just like GSacs et al are doing regular workign folks in US: make bad, unstainiable loans to the point they bubble up their economy, real estate, knowing that they could get bailed out by govt(US Congress or IMF) and walk away whole, having made huge omeny in mean time and leaving wreckage of whole country's economy in their path.
Did it matter Iceland and Sweden were both Nordic and Latavia was not. Nope, just a question who is predator and who is prey....just because most Iceland was Nordic did not mean is was a predator, norhtern whiteness did not protect it from getting played.
Is this your homework, Larry?
Does Mishkin deliberately misspell 'received' several times in that Iceland report?