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How Iceland Overthrew The Banks: The Only 3 Minutes Of Any Worth From Davos

Tyler Durden's picture


"Why do we consider banks to be like holy churches?" is the rhetorical question that Iceland's President Olafur Ragnar Grimson asks (and answers) in this truly epic three minutes of truthiness from the farce that is the World Economic Forum in Davos. Amid a week of back-slapping and self-congratulatory party-outdoing, as John Aziz notes, the Icelandic President explains why his nation is growing strongly, why unemployment is negligible, and how they moved from the world's poster-child for banking crisis 5 years ago to a thriving nation once again. Simply put, he says, "we didn't follow the prevailing orthodoxies of the last 30 years in the Western world." There are lessons here for everyone - as Grimson explains the process of creative destruction that remains much needed in Western economies - though we suspect his holographic pass for next year's Swiss fun will be reneged...


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Sun, 01/27/2013 - 08:46 | 3188900 Griffin
Griffin's picture

There are some bankers and politicians in Iceland in jail already and some big fish on the frying pan.

The tax authority has also managed to claw back over 20 billion ISK from tax havens.


Big things have small beginnings

Sat, 01/26/2013 - 22:13 | 3188563 h0oS
h0oS's picture

"Even a strong successful financial sector is in fact bad news if you want your economy to be competative in the sectors which really are 21st century innvoation areas" lulz sec :)

Sat, 01/26/2013 - 22:14 | 3188565 Conman
Conman's picture

Imagine if all those HFT algo programmers did something productive with thier lives, like making it faster for me to get porn and stuff.

Sat, 01/26/2013 - 22:14 | 3188568 luckylogger
luckylogger's picture

But, but, but, but... I thought the banks were doing gods work........... which makes them gods..???


May they all rot in hell !!!!!!!!!!!!!!!!!!!

Sun, 01/27/2013 - 03:12 | 3188792 Zigs
Zigs's picture

The Lloyd giveth, and the Lloyd taketh away.

Sun, 01/27/2013 - 09:33 | 3188932 SmallerGovNow2
SmallerGovNow2's picture

nice rack lucky...

Sun, 01/27/2013 - 23:00 | 3190205 ZeroAvatar
ZeroAvatar's picture

Looks like those babies could take 1st and 3rd in a wet t-shirt contest!

Sat, 01/26/2013 - 22:14 | 3188570 bania
bania's picture

Grimson will BE the holographic pass, a la Princess Lea in Star Wars.

"Help us Ron Paul... you are our only hope."

Sat, 01/26/2013 - 22:16 | 3188573 Seasmoke
Seasmoke's picture

Iceland must not like Jewish bankers.

Bravo Iceland !!!

Sat, 01/26/2013 - 22:18 | 3188577 booboo
booboo's picture

oh I'm sure the puppet masters have something up their sleeve to punish these barbarians for their defiance and no its not the "comfy chair"

Sat, 01/26/2013 - 22:20 | 3188582 Yen Cross
Yen Cross's picture

 Most people discuss new ways to get screwed.  Let's get Smart and think about making rational good decisions.


      hIT THE STUMP/

Sat, 01/26/2013 - 22:30 | 3188602 espirit
espirit's picture


Sat, 01/26/2013 - 23:03 | 3188635 francis_sawyer
francis_sawyer's picture



You know ~ That's a fucking AWESOME idea...

If that PUSSY ASS organization which calls itself 'ANONYMOUS' wants to create a TRUE SENSATION... Forget about all this DOJ hacking bullshit... HACK fucking JPMorgan & disable everyone's EBT cards... Only THEN would a TRUE revolution be upon us...

Put up or fucking SHUT UP bitchez [you 'ZERO COOL' mother fucking wannabe fucking fucks]...


Sat, 01/26/2013 - 23:12 | 3188643 espirit
espirit's picture

Or give them something in the order of six digits.

Movin' on up!

Sun, 01/27/2013 - 10:11 | 3188963 ReallySparky
ReallySparky's picture

Either way, same result.

Sun, 01/27/2013 - 10:52 | 3189003 smacker
smacker's picture

I always find it difficult to determine what the underlying aims of folks like Anonymous and Occupy Wall Street really are. They may want the banks brought to their knees for criminality and Wall Street brought to heel, as most of us do. But whereas many of us want a return to honest free market capitalism, I believe the other groups want to introduce socialism...or extreme versions of it.

Sat, 01/26/2013 - 22:28 | 3188598 mess nonster
mess nonster's picture

36 degrees in Rekjavik. 22 where I am. No hot springs nearby for me.

Sat, 01/26/2013 - 23:55 | 3188677 moonstears
moonstears's picture

Island(Iceland), a beautiful woman behind every tree (actually are many hotties there, but no trees)! Haven't been there in years, best to you, mess nonster!

Sat, 01/26/2013 - 22:27 | 3188600 ebworthen
ebworthen's picture

An on the sidelines interview via Al-Jazeera


A speaker on the big stage via CNBC

That says a lot, no?

Love it, perfect.

Sun, 01/27/2013 - 08:05 | 3188874 buckethead
buckethead's picture

It does speak as to which global media outlets are willing to air narratives which don't necessarily align with those prescribed from 'higher up'.

Well done, Al Jazeera.

Sat, 01/26/2013 - 22:37 | 3188611 Whiner
Whiner's picture


Sat, 01/26/2013 - 22:39 | 3188614 Artful Dodger
Artful Dodger's picture

Brilliant. He implicitly demolishes the financial sector as unproductive, saying how even in Iceland the banks pulled smart/innovative analytical professions away from other sectors, where they might actually accomplish something useful. Now they're back in those sectors, contributing to economic growth (according to him) rather than electronic financial instrument flipping.

Sat, 01/26/2013 - 23:33 | 3188655 Cabreado
Cabreado's picture

Brilliant, yes, but

let's admit Iceland is not USA,

and for starters...

he mentioned "enlightened democracies" as the context.

Sun, 01/27/2013 - 09:24 | 3188926 SmallerGovNow2
SmallerGovNow2's picture

So let us continue with the current banking system in the US since it is working so well?

Sat, 01/26/2013 - 23:01 | 3188632 DaveyJones
DaveyJones's picture

how to overthrow the banks

1) get some balls

2) see #1


Sat, 01/26/2013 - 23:12 | 3188642 joego1
joego1's picture

Blasphemy! Sacrifice them on the holy alter of the squid! And bring me a virgin and a bottle of JD while you are at it Muppet.

Sat, 01/26/2013 - 23:26 | 3188653 reader2010
reader2010's picture


Sat, 01/26/2013 - 23:42 | 3188662 neutrinoman
neutrinoman's picture

It's the cartelization of banking under government backing that's the problem. The crisis led the Icelanders to detroy this cartel, at least within their borders. They let failure fail, but they also prosecuted fraud -- they recognized it *as* fraud -- we sort of did this 20 years ago in the S&L clean-up, under a conservative administration (Bush Sr.). What's gone wrong with us? The political class now loves debt, wants everyone to get deep into it, and looks the other way with the middlemen of debt (the bankers) go wrong, because they're backed by the central banks and political class. Watch Taleb's video on linked here on ZH.

... in the Ayn Rand world, TBTF wouldn't have existed in the first place -- the system would never have been so fragile and vulnerable to catastrophic failure. You'd have a gold standard. You couldn't inflate the base of money and credit the way Greenspan, Bernanke, et al. have done. And you'd have no central bank with the ability to create money and credit from nothing, with its purpose of propping up big government and the large banks.

Sat, 01/26/2013 - 23:54 | 3188674 hooligan2009
hooligan2009's picture

apparently the national pastime of icelanders is lying to beware


from espirit below

Sun, 01/27/2013 - 01:06 | 3188740 LetsGetPhysical
LetsGetPhysical's picture

Shhhh... stop making sense. The fight club needs a feel good story. Don't upset the narrative.

Sun, 01/27/2013 - 01:27 | 3188753 Buckaroo Banzai
Buckaroo Banzai's picture

Wow...great link. Guess things look a lot different from inside Iceland.

Sun, 01/27/2013 - 11:14 | 3189022 nmewn
nmewn's picture

Thanks to hooligan & espirit...a little truth goes a long way.

Sun, 01/27/2013 - 12:00 | 3189061 Oldrepublic
Oldrepublic's picture

from fishing for cod to investment banking and back to fishing in one generation!


Sun, 01/27/2013 - 05:12 | 3188831 pherron2
pherron2's picture

What I understand of Rands philosophy is that she would have NO regulation. If someone was successful in screwing others over, more power to them, though her contention was that they would eventually be discovered, and drummed out of business. She did not see it as any moral dillema. Greenspan ascribed to this philosophy, and proclaimed himself a devout Randian. So help me understand how a Randian society would prevent TBTF. (BTW, I think she was a dispicable kuhnt)

Sun, 01/27/2013 - 00:09 | 3188684 AgAu_man
AgAu_man's picture

If one is sincere about "doing God's work", one also needs to observe the Lord's/Moses's "7 year debt Jubilee", where all remaining debts are forgiven.  I assume the modern interpretation of the Old Testament is that this debt-forgiveness goes beyond one's family or tribe. 


Sun, 01/27/2013 - 12:39 | 3189100 hooligan2009
hooligan2009's picture

that would make the interest/repayment rate around 16% for this to work. (14% principal repayment + c. 2% on the average balance)

Sun, 01/27/2013 - 00:21 | 3188696 Cosimo de Medici
Cosimo de Medici's picture

This guy is as full of shit as anyone else at Davos, and all this kudos afforded Iceland is simply bizarre.

The real "secret" to Iceland's supposed success is:

1)  Find a way to hoodwink boatloads of capital into your tiny country (which is a third the size of Foxconn's workforce)

2)  Waste most of the capital, but use a portion of it to better the country's infrastructure

3)  Don't pay any of the money back to foreign depositers (the proverbial widows and orphans, by the way, not bankers)

4)  Find a socially acceptible scapegoat, so that all other Icelanders can ignore their own willing complicity in the scam.

Iceland is almost as "noble" as AIG (when it was still considering suing Treasury).  They're Jon Corzine writ large and sovereign.  They're as rancid and foul as that rotted shark flesh they champion as a delicacy. 

Sun, 01/27/2013 - 01:06 | 3188739 Cabreado
Cabreado's picture

"so that all other Icelanders can ignore their own willing complicity in the scam."

Perhaps you could provide an explanation, because, regardless of 1, 2 and 3 in any state (or State), your #4 pretty much requires one.


Sun, 01/27/2013 - 09:00 | 3188910 overmedicatedun...
overmedicatedundersexed's picture

cosimo, two wrongs don't make a right, well then, bigger bonus for the bankers should make them repent.

your sense of fairness corzine would love , or is that you jon. good for iceland i say. you are confused but elegant in your dementia.


Sun, 01/27/2013 - 10:46 | 3188996 Cosimo de Medici
Cosimo de Medici's picture

Clearly you do not understand the genesis of the Icelandic collapse, and prefer a false idol to harsh reality. Your comment about Corzine makes absolutely no sense in relation to my comment, so I suspect that your comprehension suffers as much as your willingness to learn.

Corzine used others' money to his own ends, and when he failed he walked.  Icelanders used others' money for their own end, then when their bubble burst, the entire nation walked.  That they stuck their domestic bankers was just projection of their own sins on to a chosen few.  There are no heroes.  This article is just like an old Norse (or Icelandic) tale:  a myth.  They're all guilty.

Sun, 01/27/2013 - 01:15 | 3188697 linrom
linrom's picture

Wow. What a great page.


So what Iceland has really done was to shift all its BANK DEBT onto Icelanders and their descendants forever via price/ foreign currency indexation of debt owned to the banks.

Then while Iceland can boast that it has not implemented austerity, it has turned its citizens into debt-peons, including debtors' children.

What a feudal-debt model touted as success! Is it any wonder that IMF and bankers love it!

Sun, 01/27/2013 - 12:12 | 3189074 espirit
espirit's picture

You Sir, are worthy of quoting.

In a nutshell, so to speak.

Sun, 01/27/2013 - 12:14 | 3189075 tip e. canoe
tip e. canoe's picture

"Is it any wonder that IMF and bankers love it!"

exactly, all they have to do is throw some scapegoats to the mob and pretend like that's solving everything.   i'm sure they already have a list drawn up.

Sun, 01/27/2013 - 00:55 | 3188730 Bunga Bunga
Bunga Bunga's picture

Successful, but isn't Iceland a terrorist state?

Mon, 01/28/2013 - 05:57 | 3188988 smacker
smacker's picture

That allegation was made by the Marxist buffoon Gordon "Jonah" Brown and can safely be ignored. He's a 100% certified nutter.

Sun, 01/27/2013 - 01:23 | 3188751 1C3-N1N3
1C3-N1N3's picture

Badass Ragnars: Danneskjold, Benson, Redbeard, Grimsson...

Sun, 01/27/2013 - 01:33 | 3188756 alfbell
alfbell's picture

Iceland is a frozen shit hole. Small population. No wealth, no assets and in the middle of nowhere. That is why they talk about the banking cartel as they do. But let some European country or the USA try something like that and the bankers will put on the full court press and kick ass.

Who's your daddy, USA? Who's your daddy, Europe? Who's your daddy, Japan and Canada and Australia?


Sun, 01/27/2013 - 01:52 | 3188768 kedi
kedi's picture

In a small country like Iceland, the people, politicians, bankers etc, are very close together. Close enough to really feel the effects of things. Anger, failure, success. The larger the country and population, the more insulated these groups are from each other's realities and the greater is the inertia of actions to reactions. You can't swing a dead bank in Iceland without hitting everyone. In the US, EU, etc, too many are too far away from the reality.

Sun, 01/27/2013 - 09:06 | 3188912 Acet
Acet's picture

That's why countries like Switzerland have things like Cantoons. It keeps Democracy nice and tight.

Above a certain ratio of voter-to-representative, Democracy stops being about electing the better man/woman to represent our interests and starts being about electing the most photogenic salesman with charisma who has the right connections to make sure he's portrayed in a good light in the Media.

When there are just 2-degrees of separation between you and any of the candidates, it's far more easy to find out if one is an asshole, is untrustworthy or has no ethics (you'll likelly know someone who has seen that person behave out of his/her salesman character) than when you have to make your mind purelly from seeing a carefully cultivated image on TV.

So what's been happening in most Western countries for decades now is that we've been electing the best liars and the ones with the least worry about deceiving their fellow men: the most sociophatic of the lot.

Sun, 01/27/2013 - 03:00 | 3188785 AgAu_man
AgAu_man's picture

Having now actually watched the video, I have to wonder...

Using the dilapidated house theory (for a country's sovereign debt), the damage is either minimal enough to repair it, or you treat it as "irreparable" and you bulldoze it.  Then start fresh with a new house, and different 'contractor'.

Suspect that the Greek and Spanish 'houses' are so far gone, that the ppl there know better than to throw good money (more fiat debt obligations) after bad, and that it's time to let their house of fiat-cards collapse.  Of course, the other fiat houses in the EU -- especially in Italy are scared witless/shitless of this happening, as that would visit America's Fed soon after.  

So, even though Greece's debt is small enough for Exxon and Apple to pay it off, TPTB are sticking to their Ponzi.  In the meantime, TPTB are still controlling the Greek & Spanish 'debt' by controlling the talking points -- as always. 

You define & control the issues and talking points, you control the game.  /Well done MSM, well done Elite!  May the Farce be with you. /sarc off

Sun, 01/27/2013 - 06:46 | 3188828 From Germany Wi...
From Germany With Love's picture

Yeah, Draghi is now attacking Schäuble because apparently little Cyprus is now Too-Big-To-F*cking-Fail (TBTFF). It's getting funny:

(Google Translator, slightly corrected by me here)
"At the recent meeting of finance ministers early last week Draghi objected, according to SPIEGEL information, to the assessment of Schäuble that the island republic is not "systemically relevant", so that a bust of the country would not mean a threat to the survival of the euro zone.

Something he had been hearing from jurists everywhere, Draghi held it against the German finance minister. The question of whether Cyprus is relevant to the system or not wasn't one that jurists could answer. That was a matter for economists. Schäuble has a doctorate in law."

Sun, 01/27/2013 - 14:44 | 3189307 AgAu_man
AgAu_man's picture

A friend in M (Munich) commented: "Koestlich. Geil!"
Close call... the spelling aid on my cell phone almost got away with changing the G in Geil into an H. I think this thing has a sense of humor.

Sun, 01/27/2013 - 03:41 | 3188802 ILikeBoats
ILikeBoats's picture

Does he mention that the only way Icelanders stopped the then-current President or PM from signing the country over to the banks, was to SHOW UP AT HIS HOUSE with flaming highway flares, completely surrounding his house?  Iceland is an island, you cannot escape. 

How many people protesting would be shot dead if they tried the same thing at the White House?

Sun, 01/27/2013 - 14:29 | 3189291 Griffin
Griffin's picture

All laws coming from the parliament must be signed by the president to take effect, so if the people do not agree with the parliament, they can demand a referendum by signing a petition and deliver to the president.

If its clear that a large part of the people demand a referendum, then thats exactly what they get.

The president is elected by the people and works for  the people, not the politicians.


Sun, 01/27/2013 - 04:13 | 3188810 Cookie
Cookie's picture

If only this clip went viral we might have a chance

Sun, 01/27/2013 - 11:56 | 3189057 unununium
unununium's picture

Hell I just sent it to 4 people so that's a start.

Sun, 01/27/2013 - 12:21 | 3189083 tip e. canoe
tip e. canoe's picture

be careful what you wish for, unless you will enjoy becoming a debt slave to a global central bank.

Sun, 01/27/2013 - 04:41 | 3188820 From Germany Wi...
From Germany With Love's picture

You don't need banks to go bust. You just need to disown shareholders - that's enough to avoid moral hazard and to keep new shareholders alert and ensure effective risk management.

Disown shareholders of insolvent TBTF banks!

Sun, 01/27/2013 - 09:45 | 3188942 css1971
css1971's picture

No, the bondholders have to be wiped out as well.

Sun, 01/27/2013 - 10:16 | 3188967 GetZeeGold
GetZeeGold's picture



Only in the automobile sector.....the rule of law still applies to pretty much everything far.

Sun, 01/27/2013 - 06:54 | 3188852 q99x2
q99x2's picture

I had posted information that Jerome Corsi had talked about on Coast to Coast about HSBC's money laundering months before ZN started printing articles on their bust and subsequent fine. Of course HSBC's drug running goes back many hundreds of years but because Corsi's presentation on Coast was so compelling beforehand and it actually turned into a bust even though Holder and Lenny refused to prosecute crimminally I think it worth posting this link to Corsi and Alex Jones on Obama's takeover and bankrupting of the US for the Chinese HERE.

They (Obama and a rogue part of the FEDs and the Chinese) may be planning to send a nuke jointly to the Eastern US.

Sun, 01/27/2013 - 15:53 | 3189113 sunnyside
sunnyside's picture

Alien anal probes are not enough fun anymore?


Sun, 01/27/2013 - 09:43 | 3188941 Sean7k
Sean7k's picture

Britain maintains its' empire through the proliferation of the central banking system. A small group of international families own the important banks and control the rest. They all use a simple device: control over the currency. This is then tied to an income tax. 

The way to break this hold on universal labors is simple: end legal tender laws. In the US, it would merely require legislation to that effect. No amendments to the Constitution. 

The market would then be in charge of currency, not the banks, not the treasury, not a special group of advisors. It requires no warfare, no blood spilled, just a slow incremental movement towards sound money. Most of which would be untaxable. It would reward States that benefit the people, as they would be most willing to fund them, it would penalize all others by denying them funds. 

Banks could be bypassed in contract settlements if they fail to behave and relegated to a more conservative role in risk assessment, savings and capital development. 

Excess regulation exists because unrestrained funding from inflated currencies exist. It is simple, turn off the spigot. 

Sun, 01/27/2013 - 10:02 | 3188955 Inthemix96
Inthemix96's picture


I am a Britisher.  We Britishers over here are well aware (from the folk I speak to) as to who runs this shit show.  Through the "Square Mile" in London, via the parliament, and straight into the head quarters of HRH queenie.  The shit coming out over here day by day has got your average bloke spitting.

If the people at the BBC, and in said parliament could drag themselves away from protecting each other over the vile abuse of children which by the Mets own accounts jimmy saville abused 450 kids at least, and still running about trying to protect filthy peodophiles in all our big institutions, with our very own "Clown-Man" Cameron going on day time TV telling folk that to pursue this could be dangerous to gay people, to the fact that parliament, and 99% of its filthy contents are robbing us fucking blind with false expense claims and coming out with pearlers like "I didnt understand the system?"  And getting away with it, even claiming for absurd items like bath plugs and porn for husbands on our fucking coin while telling the general public to make do with less and live on a pittance, even the old gem "Make Do And Mend", then coming back on TV in these times of harsh "AUSTERITY", for the public of course, and proclaiming they deserve a 32% pay increase because we the people demanded it, taking away disabled peoples money to pay for their rent, leaving fuck knows how many poor folk on the street, with a surge in the number of food banks opening,

Maybe if they could deal with this first, perhaps they could think about whats right for the country, instead of fucking about fiddling the god damn fuck out of their expenses and finding interesting ways of avoiding prosecution, they could give a little time to trying to put this country right, maybe, just maybe, people like me wouldnt be so fucking livid with rage.

Sorry for the rant, but had to get that one off me chest.  The corruption runs deep and it starts in SW1.

Sun, 01/27/2013 - 10:10 | 3188961 Hannibal
Hannibal's picture


Just get out of that shit hole and move to Costa Rica.

Sun, 01/27/2013 - 10:13 | 3188965 Inthemix96
Inthemix96's picture

No chance Hannbal.

If it kicks off here I will be on live TV giving Nick Clegg a colonoscopy with a lampost, leave and miss the chance to vent my pent up violence on these in-bred, dickless wonders?

Not a fucking chance I would miss that.


Sun, 01/27/2013 - 12:54 | 3189126 knukles
knukles's picture

Ever so sad.  Not the Britain I remember fondly from my years there in the 60's.
But then again, London in those days was domiciled primarily by Englishmen, Scots, and the like, was a terribly civil place....
Than again, neither's the US or anywhere else for that matter.

Sun, 01/27/2013 - 13:24 | 3189159 Inthemix96
Inthemix96's picture


I will put this as polite as I can,

Forget the 60's mate, this place is a fucking shit hole of unknown quantitys.  You voice your opinions?  Racist.  You dont like the road we are headed?  Racist/far-right winger.  You dont like bailing out failed banks?  Far-right/anarchist.  And on and on and fucking on.

This country needs a full scale washout.  Its fucking toast.

Sun, 01/27/2013 - 10:34 | 3188977 smacker
smacker's picture

Dear comrade Britisher! ;-)

I agree with all you say. I might add that Britain's system of government is probably far more locked-stocked-and-barrelled than anybody realises. They have it completely sewn up. As I've said a million times: "it is systemically corrupt".

Sun, 01/27/2013 - 10:55 | 3189007 Inthemix96
Inthemix96's picture

Well said fellow man in restraints smacker.

And people are looking to the likes of Cameron, Clegg, Osbourne, IDS, Clarke to sort this shit out?

Lets not kid ourselves, these no-neck, never had a job in the real world outside of fucking politics cunts know how to right the ship?  Do they fuck.  I have ran my own business for 20+ years and could run rings round these retards, but the little mans opinions like mine count for nothing.

The only saving grace is when this jazz comes down, we can give these fuckers exactly what they deserve.

These cunts want war?  Well, I believe it is our right, nay duty to give the cunts exactly that.

See you on the front lines comrade.  Its gonna be a fucking blast.

Sun, 01/27/2013 - 11:24 | 3189028 smacker
smacker's picture

Cameron exposes his real political leanings when he says "we're all in this together" and then sanctions punishment on to savers and investors thru QE and Zirp.

But as a long-time saver and not a spender, I have never accepted his bollix. But it shows exactly how deep and widespread socialist thinking has spread throughout our corrupt political system: the good guys get punished and the bad ones get rewarded.

Sun, 01/27/2013 - 10:37 | 3188980 jimijon
jimijon's picture

They always wanted their crown jewel and in 1913 they figured it out ... again.

London rules us... sigh.

Sun, 01/27/2013 - 13:20 | 3189137 hooligan2009
hooligan2009's picture

the London you refer to is dominated by global (not British) players in the fund management, insurance and banking industries. The Queen has nothing to do with it.

there are more British insurance companies and fund managers than there are banks, but really, every financial institution with any regional or global ambitions is present in London.

There are only two banks that are left in private hands that could claim ot be "British". HSBC (who bought one of the big 4 UK banks, Midland) and Barclays. Lloyds Bank is 43% owned by the Government and RBoS is more than 80% owned by the Government. 

Your other US (JPM, GS, BoA, BoNY, MS, SSgA, NT etc) German (landesbanks, DB, CMZ) French (SGen, BNP, C.Ag) Canadian (BoM, RBC, TDom) and various riff raff (like Santander, BBVA, BMP, SEB, NAB, CBA, BoTM, Nikko, Nomura, etc) banks outnumber "British" institutions by a factor of 100's to 1, as do their balance sheets (even though RBoS tried manfully to inflate its balance sheet to the size of 5,000 zeppelins.

The square mile (City of London) is not English and has not been for decades. It is a cosmpolitan smorgasbord of entities that avail themselves of UK law to pay themselves very large amounts of money, lose it all, get their resepctive government bail-outs and PAY NO CORPORATE TAXES.

Their staff do pay income taxes and national insurance and that is what they show to the UK politicians, who are financially illiterate.

There is one point made by the Icelandic prime minister that I do agree with. Employing our best and brightest to become screen jockeys rather than inventors, engineers, scientists, designers, researchers and entrpreneurs is a side effect of allowing funny money to rob taxpayers.



Sun, 01/27/2013 - 10:26 | 3188966 smacker
smacker's picture

It's difficult to know exactly what consequences would have flowed if the US-UK-EU had allowed their criminal banks to fail back in 2007-8. It's never too late! But few people would doubt that such action was the "right" thing to do. And as I mentioned elsewhere on ZH, unless and until the criminals are brought to account and prosecuted, ordinary people will have little confidence and trust in the elites and banksters. This manifests itself in people not investing and spending, thus a recovery will take much much longer.

The political elites have made a rod for their own back by bailing out criminal banksters and by lying on the floor with their legs in the air. Sovereigns - and therefore taxpayers - will now be raped by banks forever more.

This recent blog post attempts to explain what actually happened in Iceland:

Sun, 01/27/2013 - 13:05 | 3189140 hooligan2009
hooligan2009's picture

i have a sneaking suspicion that the sight of a few dozen trucks filled with cash would have averted the bank runs on Bradfor and Bingley and Northern Trust. A much more orderly "collapse" of the status quo could then have been arranged that woudl have prevented British taxpayers losing hundreds of billions of pounds and would have prevented non-UK banks paying not corporate tax FOREVER.

Sun, 01/27/2013 - 14:51 | 3189324 smacker
smacker's picture

You may be right.

Although I seem to recall that the overriding imperative in what was called Gordon Brown's "mind" at the time was to prevent TV footage of lines of people queuing up outside banks to withdraw their money (bank runs) in the run-up to a general election. The cost to the taxpayer of his decisions was of trivial importance to him and I'm sure he brushed it aside.

Sun, 01/27/2013 - 10:35 | 3188979 jimijon
jimijon's picture

Socialism or immigration.... you get to choose one.

Sun, 01/27/2013 - 10:52 | 3188989 Bokkenrijder
Bokkenrijder's picture

A couple of points;

1) the EU based company I work for has a lot of Icelandic employees, and NONE are positive about their home country and NONE of them want to go back.

2) the Icelanders had NO choice other than to 'overthrow' the banks, simply because 300k people can NEVER EVER pay back the mess that those three Icelandic banks made. It was not a choice made out of conviction of what's right or wrong, rather one made of of pure necessity.

It seems to me that this 'Icelandic mirracle recovery example' that some people are trumping on about is simply being used by some folks with their own deflationist agenda, hoping for a systemic crash from which they can profit.

However, just like the mass propaganda in the MSM, these fantastic 'recovery' claims are of course very difficult to refute because most people can hardly point out Iceland on a map, let alone that they personally know any of it's 300k inhabitants and hear the stories that contradict the '5 minutes of fame' points made by a Icelandic politician made on a forum in Davos.

Go to Iceland, or talk to some of their citizens and you'll get a TOTALLY different picture then that painted by a politician or some prop trader sitting behind a desk hoping to short the entire market.

Sun, 01/27/2013 - 12:18 | 3189085 espirit
espirit's picture

Nice +1

Sun, 01/27/2013 - 10:44 | 3188993 squexx
squexx's picture

The REAL problem is the Satanic Tribe that runs the banks, especially behind the scenes!

Sun, 01/27/2013 - 10:55 | 3189008 JEHR
JEHR's picture

The Prime Minister of Iceland is a politician:  do you believe politicians when they speak? I don't think that Michael Hudson would agree with this politician:


"Iceland provides another object lesson. Even more than Latvia, it became a rogue banker’s paradise – and also one for vulture banks. Their loans are indexed to the consumer price index – which means in practice to the foreign exchange rate. The krónur plunged after the banks crashed in 2008. The result a 1,000 krónur debt has become perhaps 1,800 – against property that has fallen from the equivalent of 1000 krónur down to perhaps 400 krónur. This leaves many families in negative equity. And they are personally liable.

"When the crooked banks of Iceland went under (and they’ve only recently begun to arrest some of the crooks) the government took them over and, on European advice, sold them to vulture investors, for around ten cents on the dollar. Despite the fact that Iceland’s constitution said that they were not allowed to increase debts by indexing, this is just what the banks did. If the government had taken over, it could have written down the debts to the ability to pay. But the new vulture banks have not done this. And the Social Democratic government backed their rights to make as much as they can, rather than giving priority to the welfare of the Icelandic people."




Sun, 01/27/2013 - 12:23 | 3189087 tip e. canoe
tip e. canoe's picture

another crack in the dam of the "Miracle in Iceland" meme

Sun, 01/27/2013 - 11:15 | 3189023 MarcusAurelius
MarcusAurelius's picture

I will use a phrase that I rarely use in writing but in this case I will forgo my usually calm demeanor, "NO FUCKING KIDDING". Although the US is not Iceland and the unforseen consequences might be far worse than Icelands were the banks to fail the recovery would be in no uncertain terms much quicker. The question is not, "should we let the banks fail" but rather, "would we (as a North American Society) be willing to go through the short term pain of such a procedure". You see these fuckers have their hands in everything world wide. Like the president said they hire all these teams and all these specialists and throw up ridiculous barriers to new competition (as if a financial institution should have ever had the right to do this) to protect the interests of their TBTF investors (like the Warren Buffets of the world) who really never considered Icelandic banks as a value buy. They also are all in bed togather politically. Personally I do not have that much to lose so I would not necessarily give a "hoot in hell" if the shareholders and bondholders of these large TBTF institutions took a haircut. However I am not in power or own a potitician like some of these families do.

      Right now "Gresham's dynamics" rule the banking world along with a few other industries that are rules by Oligarchs. The bad have risen to the top and have gone unpunished. I would love to see a new beginning for our children's sake (my children). I would love to see new technology and new companies take the place of the old. I would love to see the religious morons get out of the way of bio-tech and other scientific companies that have proven beyond a shadow of doubt that their beleifs are flawed and immoral. I would love to see the 1% of the world forced to part with their insane amounts of guarded wealth so that the rest of the world could flourish. I woudl love to see the charities abolished so that people could get micro loans and regain pride. In fact there are many things I envision and dream of so that our resources are used in the best way to better mankind. However an ideological change has to take place in mass before that will ever happen. People sadly are afraid of change and change is exactly what we need.

Sun, 01/27/2013 - 11:41 | 3189039 Atomizer
Atomizer's picture

Well said Olafur. Wish you would have mentioned the stranglehold in cutting & dicing until no profits are left to pay back the interest owed.  Sadly, the ivy league skoolz teach students how to pencil whip numbers that cannot mathematically equate to its sum.


No commentary needed on link below.

Sun, 01/27/2013 - 13:35 | 3189182 logicalman
logicalman's picture

Most eat pre-packaged food and damage themselves and enrich others in doing so.

Why should 'investing' be any different?


Sun, 01/27/2013 - 12:02 | 3189065 resurger
resurger's picture

a sane voice in the wilderness

Sun, 01/27/2013 - 13:33 | 3189175 logicalman
logicalman's picture

Fractional reseve banking and interest are the cause of most the world's problems, leading to environmental damage, disease and starvation.

Money was invented by the rich and greedy to increase their own wealth at the expense of others - worked pretty well so far.

Money and wealth are not the same thing, but the control of money under our present system steers most of the wealth in one direction (we all know what direction that is)

All we need is honesty (a concept few politicians or bankers have even run across!) in the financial system and it will sort itself out.

<-- Not holding my breath for that one, however!

Sun, 01/27/2013 - 14:03 | 3189231 yogibear
yogibear's picture

Iceland defaulted and raised their middle finger to the banksters. They jailed them.

Now they have recovered. 

Iceland is the prime example of doing what's right!

An icon for everyone else!!!!

Play the bankster game and you will always loose.

Sun, 01/27/2013 - 14:23 | 3189272 hooligan2009
hooligan2009's picture


Sun, 01/27/2013 - 14:09 | 3189248 evernewecon
evernewecon's picture



Now honestly and capably overseen, 

Iceland banks potentially become a genuine, very

rare, safe haven, once they arrive at 

a smart currency decision.


Of course, if they simply make available

$US denominated accounts in addition to whatever-

denominated accounts they also later offer,

many Americans will see those as a way out from

worrying about bank tactics involving their 

own funds.


I don't think the Icelanders should necessarily rush 

into the euro.  I'm clueless as to their 

attitude toward linking up with that from

which they became independent, but they

may be better off with a safe haven Scandinavian

currency.  They used to be part of Denmark.

So that would be the Danish Krone.


If they offered deposits, in honest banks, safely

reserved, in Danish Krone, those being quite

acceptable, thank you, to Americans, it would

be like the Mouse the Roared. Slammo bango--

bankers for Americans overnight.


Ironically, then they'd actually have the ability

to kite crazy bankers' mortgage bubble schemes.

But I think now they know to come with the 

butterfly nets instead.



People will want this reference, even if 

it's connected with one who also helped

create the euro.

Sun, 01/27/2013 - 14:44 | 3189316 Rentier
Rentier's picture

only sane place left on's a frozen island.

Sun, 01/27/2013 - 15:14 | 3189352 hooligan2009
hooligan2009's picture

and its built on a fault line with a lot of volcanic activity like this..which grounded flights throughout Europe as prevailing winds took the ash cloud as far as germany and 2010

Sun, 01/27/2013 - 17:39 | 3189527 Griffin
Griffin's picture

Its not just a fault line, its the Mid Atlantic ridge that cuts the country in half.

Because of this, there is considerable geothermal energy in Iceland.

Some Dutch political parties were discussing a few days ago the old idea to have Icelanders pay off the Icesave debt with electricity by a undersea cable from Iceland to Scotland and into the European grid.

Those people don't know that the estate of Landsbanki, the bank responsible for the debt, has already paid ca 70% of all priority claims, not just to individuals but also to charities and communities and others, the recoveries by the administrators will exceed priority claims, probably already have.


A new documentary on Icelandic volcanoes from the BBC


Sun, 01/27/2013 - 14:45 | 3189318 NoTTD
NoTTD's picture

I've read through the comments and, as usual, a certain percentage are moronic.  

I'd like to briefly address those of you who whine and complain that what Iceland has done isn't "final", that the "banksters" will screw them again and worse, that what they were put through was too awful.  While you may be right, as a resident of the US I would much rather we had taken our medicine in '08 rather than still be facing the coming financial apocaplypse.   Criticize them if you wish, but don't kid yourselves. Their leadership actually led during the crisis while ours, whom in one way or another the overwhleming majority of you elected, were a bunch of pussies.  Batten down the hatches.

Sun, 01/27/2013 - 15:21 | 3189361 monopoly
monopoly's picture

My goodness. What i would give to have someone like that running this country. I can dream.

Sun, 01/27/2013 - 15:47 | 3189390 Mad Muppet
Mad Muppet's picture

Olafur Grimmson for President 2016. Send me your (generous)donations, I'll see it goes to a good use!

Sun, 01/27/2013 - 15:50 | 3189396 highwaytoserfdom
highwaytoserfdom's picture

Bravo Bravo Bravo....      

Sun, 01/27/2013 - 17:53 | 3189454 Griffin
Griffin's picture

There was initially a attempt to save the Icelandic banking system, but it soon became clear that it would be a stupid thing to do, it would only make matters worse.

In a time frame of roughly one week, all 3 major banks fell, Gordon Browns Govt decided to use terrorist laws to "freeze the assets of Icelandic companies in UK" because of so called Icesave accounts of Landsbanki bank in UK and this decision froze all money transaction between Iceland and the  outside world.

That finished off Landsbanki, Kaupthing, Heritable bank and Singer and Friedlander, so just that action was enough to take down the system. It would always have crashed though.

The reason why this started could be a 400 million euro margin call on Landsbanki from the ECB  on Oct 3rd, something that was said that would be impossible to negotiate, but they changed their mind anyway and cancelled the margin call, but not before it has caused irreparable damage.

I happened to be in Iceland at the time and went to a health clinic to have some repairs made to my arm, and while i waited for service i listened to a nurse who was on the phone trying to order some medicine, like medicine for diabetic people and there was not much she could get of the stuff she asked for.

Its amazing how quickly the terrorist laws paralyzed the economy, students abroad could not get money sent from the Icelandic terrorist state, and so on.

Shortly after the crash, the British and Dutch authorities demanded a guarantee from the state to ensure that the Icesave debt would be paid, a agreement was delivered to the parliament to be signed.

Icesave accounts had been opened in the Netherlands on May 29th 08.

Fortunately Wikileaks published this document and in it Iceland would agree to take over the responsibility of paying this debt of the privately owned Landsbanki bank and would also waive all sovereign rights, making all property of the state collateral for the debt. 

That deal went trough parliament with major amendments, defusing the sovereign rights issues in the deal among other things, the UK and NL rejected the amended deal.

When this deal fell trough, the British recommended Allistair Campell as a "mediator", i dont think that suggestion was answered, i suppose they could hear the roaring laughter across the pond.

Icesave 2 was negotiated and then leaked by Wikileaks, it turned out to be a turd in disguise like the first deal, so a referendum was demanded by the people and the deal was smoked.

Icesave 3 was negotiated and this time and this time a experienced negotiator was hired to negotiate on Iceland's behalf.  Lee Bucheit from Canada.

A interview with Lee Bucheit about Iceasve

The Icesave III deal was also shot down in a referendum, and the people chose the court option.


Its quite clear that there was never a state guarantee on the Icesave accounts, the general public were never accountable for the mistakes or crimes of privately owned banks.

So this matter was referred to EFTA court. Alain Lipietz explains the disputed EU directive

Tim Ward delivered the defence on behalf of Iceland last year.


This case is a clear cut win for Iceland, and the opponents, UK, NL and EU simply don't have a case, assuming Iceland was dealing with a fair law abiding entity. 

The verdict will be announced tomorrow, Jan 28th.




Sun, 01/27/2013 - 17:51 | 3189547 Richard Whitney
Richard Whitney's picture

Icelanders were extremely smug prior to the collapse. They were confident that they were succeeding, such as it was, due to their natural superiority. Their head of state even wrote a book detailing how Iceland could teach the world about finance. They promoted Icesave and the two other banks as 'transparent', with 'guaranteed savings', even though that wasn't true. Just check Max keiser videos made in Iceland before the collapse to see how tghe ordinary Icelander was convinced that their prosperity was due to their natural superiority. And check the Internet history site for Icesave homepages from back then. All of that happened on this guy's watch.

So now they are smug again, feeling their oats telling off the world. I could care less about criminal bankers, but you have to be careful who you canonize.

Sun, 01/27/2013 - 18:07 | 3189572 Griffin
Griffin's picture

The Icelandic financial system was based on a lie, it would always have crashed.

just like the systems of a large part of the western world slowly falling apart or already dead but kept on life support to prolong the life of the system as a whole, just one major event is enough to crash the whole thing, because its all interconnected, like a spiders web.

The Icelandic banking system begun to crash in ca 2001 when the sale of the 3 banks from the state to private individuals, who unfortunately turned out to be rather dodgy and very stupid.

This song describes the chain of events.

Sun, 01/27/2013 - 18:47 | 3189608 HoaX
HoaX's picture

This indeed, the Icelanders all moved into the financial sector, driving the most expensive cars and having a major property bubble when the going was good.

Then when it all came crashing down they basically just told the world to go sod themselves and let the British and Dutch taxpayers foot the bill. The hypocrisy is shocking.

Now you can say people were stupid to put their savings with Icesave but you have to realize the way they promoted themselves, with high-end commercials featuring John Cleese. Also it is a bit silly to blame people who did actually save money instead of going into debt, even though they went for higher margins. These were saving accounts not investment portfolios after all.

Sun, 01/27/2013 - 20:28 | 3189663 Griffin
Griffin's picture

You should know Hoax, that when you deposit money into a savings account, you are actually lending the money to the bank, its goes on the banks balance sheet as the banks property.

So in fact you are investing in the bank.

The only guarantee you have is the minimum guarantee from the insurance fund, who is by the way a fraction of total deposits and also overseen entirely by the bank itself.

So its not like they are keeping it for you, they invest it, so you can have interests on your investment. Money can not grow on its own.

Its a system that works quite well, until it doesn't, thats bad news for you unless you put your savings in a bank that has a state guarantee. If not you must rely on the assets of the bank to cover your losses.

Its also good to know that in the event of a crash, some banks use accounts who they can use at will, like mutual funds, to invest in bonds or similar products, for example to buy trash from companies belonging to special friends, toxic stuff they need to unload.

Its better in uncertain times to get lower interest rates and keep the money safe, rather than let bankers play with it at will, because they just might rip you off.

Sun, 01/27/2013 - 21:10 | 3189934 HoaX
HoaX's picture

Dude, I know, and it´s not like I feel sorry for the fucks that invested their money with IceSave that much.

Feel more sorry for myself since I´m dutch and we had to foot the bill.

Rest about the hypocrisy of Iceland and its citizens still stands tho.


Sun, 01/27/2013 - 18:42 | 3189603 HoaX
Sun, 01/27/2013 - 18:56 | 3189621 Catullus
Catullus's picture

Major Sabotage attack on Iran nuclear facility?

Sun, 01/27/2013 - 19:35 | 3189707 dearth vader
dearth vader's picture

Hi Tyler,

Please, read this blog from an Icelandic source.

The talking head in the clip is a politician. Should we believe him on his word?

This Icelandic blogger is sketching a completely different reality and the reactions on it are mostly from... make a guess... Spain!

Sun, 01/27/2013 - 21:31 | 3189993 neutrinoman
neutrinoman's picture

Unbelievable what he said at the end: that the fake, overleveraged profits of the financial sector attracted the talented STEM (science-technology-engineering-mathematics) people out of productive work in STEM and sapped innovation in the real (goods and services) economy.

This guy is very smart. I've never heard anyone important tell the truth publicly about what happened to STEM innovation in the UK and US in the last 20 years -- how it all went up in smoke in 2008. Talk about malinvestment!

Sun, 01/27/2013 - 22:11 | 3190097 alentia
alentia's picture

He is Ron Paul of Iceland and he made it to be PM. Big credit to the people of Iceland to vote for smart guy!

Sun, 01/27/2013 - 23:55 | 3190359 ZeroFreedom
ZeroFreedom's picture

President Olafur Ragnar Grimson can he be our next Fed Chairman?

Mon, 01/28/2013 - 02:54 | 3190626 Lord Of Finance
Lord Of Finance's picture

The prime minister asked, "Why do we consider banks to be like holy churches".


   The answer is because greed and arrogance, not money, are the roots of all evil. And the greedy, moraly depraved bankster union also lacks something called a conscience. And the sheep herds believe that the lawyers, who turned into policy makers and who also lack a conscience, have their best interest in mind and will serve them well. The sheeple do not realize, as they drive their cars that they really can't afford, and drink their starbucks lattes they can't afford either, that the lawyers they elected to represent them have only THEIR own self-interest in mind, and these devils advocates are in collusion with these devils agent bankers.

   It is the way it has always been. But, unlike years/centuries past, there were not forums of instant communication such as this one. And, just like years/centuries past, we have that precious relic that has with stood every cultural decline, movement,revolution,collapse and annihilation.


And now, once again, a message from the second most interesting man in the world:


   "I don't always buy gold coins, but when I do, I buy gold eagles. Stay patient my friends."


   The church of the holy fed, IMF, and World bank, among all the others, have created the ultimate moral hazard, because they have no concept of morality and have corrupted, if not; flat out dead consciences.



Tue, 01/29/2013 - 12:00 | 3194974 loveyajimbo
loveyajimbo's picture

How come they got that smart, good guy and we got stuck with a corrupt muslim failure, coward and liar...??

Wed, 01/30/2013 - 01:00 | 3197821 rbblum
rbblum's picture

And, the TRUTH shall (truly) set you free.       H A L L E L U J A H

Do NOT follow this link or you will be banned from the site!