Skip to Content.
Sympa Menu

homestead - Re: [Homestead] Iceland -shortages, inflation, today's paper

homestead AT lists.ibiblio.org

Subject: Homestead mailing list

List archive

Chronological Thread  
  • From: bob ford <bobford79 AT yahoo.com>
  • To: Wendy <crazygardens AT verizon.net>
  • Cc: homestead AT lists.ibiblio.org
  • Subject: Re: [Homestead] Iceland -shortages, inflation, today's paper
  • Date: Sat, 4 Oct 2008 09:21:12 -0700 (PDT)

Wendy, I received and the computer told me how to open. You are right, that
is an excellent presentation, and funny. :) ....bobford


--- On Sat, 10/4/08, Wendy <crazygardens AT verizon.net> wrote:

> From: Wendy <crazygardens AT verizon.net>
> Subject: Re: [Homestead] Iceland -shortages, inflation, today's paper
> To: bobford79 AT yahoo.com, homestead AT lists.ibiblio.org
> Date: Saturday, October 4, 2008, 8:58 AM
> Bob, my daughter send me the most awsome powerpoint
> presentation which
> explains what is happening overseas. I wish I could post
> attachements on
> this board. And, no, I don't have a private webpage to
> post it on. If
> anyone would like it, send me your private email addy and
> I'll send it to
> you. My email is crazygardens AT verizon.net.
>
> Wendy
>
>
>
> >I read a list where a man from Iceland has been
> posting for a little
> >while. This is not from him, but from a news site in
> today's papers. But,
> >according to him, not only has the Icelandic currency
> lost half its buying
> >power in the past year (60% in the past month), but
> they are actually
> >having problems importing items, including to the food
> markets. Iceland
> >has always had a culture of frugality and strong
> savings.
> >
> ***************************************************************************
> >
> >
> > Iceland: When Too Big to Fail Becomes Too Big to
> Rescue
> >
> > by: Felix Salmon
> >
> > posted on: October 04, 2008 |
> >
> > We know that credit ratings agencies made enormous
> errors over the past
> > few years when it came to rating structured products.
> And of course it's
> > never easy to rate leveraged institutions, like banks,
> which are
> > susceptible to runs. But what about the more
> conventional credits, like
> > sovereigns?
> >
> > Last year, Moody's briefly gave all of
> Iceland's major banks, including
> > Glitnir, a triple-A rating, on the grounds that if
> they ever got into
> > trouble, the Icelandic government would bail them out.
> After much
> > ridicule, Moody's changed its mind. Clearly, it
> was silly to treat
> > Iceland's banks as though they were just as
> creditworthy as the sovereign.
> >
> > Fast-forward to today, and Iceland has indeed bailed
> out Glitnir. But
> > here's the thing: Iceland's credit default
> swaps are now suggesting that
> > the sovereign itself is a distressed credit.
> >
> >
> > Contracts on Iceland's debt jumped to 17.5 percent
> upfront and 5 percent a
> > year to protect 10 million euros ($13.8 million) of
> bonds.
> >
> >
> > This is not how triple-A sovereigns behave. It's
> as though the analysts at
> > Moody's (MCO) were only able to see one step
> ahead, and not two: They
> > could anticipate that Iceland would bail out its
> banks, but they couldn't
> > anticipate that when a tiny country bails out a bank
> whose assets vastly
> > exceed the country's own GDP, then the sovereign
> itself loses much
> > creditworthiness. One scary datapoint: The assets of
> Kaupthing Bank amount
> > to 623% of Iceland's GDP, which is possibly why
> its own credit default
> > swaps are trading somewhere over 2500bp.
> >
> > How bad can things get in Iceland? Here's what one
> local emailed Tom
> > Braithwaite:
> >
> >
> > They are fighting powers that they are powerless to
> fight. It's like
> > tackling a storm raging in the sea with a teaspoon.
> >
> > The main supermarket can't get imported goods
> because they have no
> > currency. The shops are half empty. One of the store
> managers has advised
> > people to start hoarding. We're running out of
> oil. And winter came last
> > night - about a month early.
> >
> >
> > Received opinion has it that if Iceland backstops the
> Icelandic banks,
> > then the other Nordic countries, or someone, will
> backstop Iceland. Which
> > might be true: we'll find out "very
> soon". But there's no news yet.
> >
> >
> http://seekingalpha.com/article/98477-iceland-when-too-big-to-fail-becomes-too-big-to-rescue
> >
> >
> >
> >
> > _______________________________________________
> > Homestead list and subscription:
> > http://lists.ibiblio.org/mailman/listinfo/homestead
> > Change your homestead list member options:
> >
> http://lists.ibiblio.org/mailman/options/homestead/crazygardens%40verizon.net
> > View the archives at:
> > https://lists.ibiblio.org/sympa/arc/homestead
> >
> >
> >







Archive powered by MHonArc 2.6.24.

Top of Page