possible country bankrupt

[uobboss]

Financial crisis: Iceland's dreams go up in smoke
What a difference a year makes. Only last November, Iceland's status as one of the most successful economies in the West was underlined when it was judged the best place to live in the world.


By Andrew Pierce
Last Updated: 8:08AM BST 07 Oct 2008
Icelandic people at one of their most famous volcanic spas, the Blue Lagoon
Feeling the heat: Iceland's problems will have an effect in Britain, where many well-known brands have connections to Iceland had ousted Norway from the head of the UN's league table of 177 countries that compared per-capita income, education, health care and life expectancy – which, at 80.55 years for males, was third highest in the world.

This was only one in a string of glowing assessments of a country (population 313,000) which had pulled off a modern-day economic miracle. No wonder they are also said to be the happiest people on the planet. The inhabitants of this newly discovered Utopia, with its much-admired free health and education systems, bought the most books, owned most mobile telephones per head, and included the highest proportion of working women in the world.

Iceland had also presided over the fastest expansion of a banking system anywhere in the world. Little did anyone know that the expansion once so admired would go on to saddle the country with liabilities in excess of $100 billion – liabilities that now dwarf its gross domestic product of $14 billion.

Iceland overreached itself in spectacular fashion, and the party is coming to a messy end.

Yesterday, trading in the shares of six major financial institutions was suspended as the government sought to avert meltdown.

Sigurdur Einarsson, Chairman, Kaupthing Bank, warned against people being too alarmist.

 

[uobboss]

"Over the years we have built a strong and well-diversified bank. We have some of the strongest capital ratios in the European bank sector. We've got good asset quality and a highly diversified loan portfolio.

Kaupthing has and continues to manage its business prudently and, with our strong fundamentals, we are naturally concerned when we hear malicious rumours and sensationalism about Kaupthing being reflected irresponsibly. We ask people to look at the facts, not rumour and inuendo."

Meanwhile, Icelandic interest rates have been catapulted to 15.5 per cent, peaks not seen in Britain since Black Wednesday, in an attempt to rein in inflation. The krona's freefall on the international currency markets is surpassed only by the catastrophic failure of Zimbabwean currency.

One of the country's three banks, Glitnir, has been nationalised; another wants money from its customers. Foreign currency is running out as international banks refuse pleas to lend money.

No longer smiling, office workers hurry home wondering out loud if they will have jobs to go to by the end of the week. Car showrooms are deserted. Estate agents are closing early. There are few takers for the thousands of unsold houses on their books. An unexpected cold spell is keeping many people inside their homes, another reason why the shops, many of which have discount sales, are quiet.

The speed with which Iceland rose and then fell to earth has bewildered not just the islanders but also Geir Haarde, the Prime Minister who has spent the past four days locked away with his advisers in Reykjavik. He emerged on Monday to announce new powers for the country's financial regulator:

"We were faced with the real possibility that the national economy would be sucked into the global banking swell and end in national bankruptcy. The legislation is necessary to avoid that fate."

The dramatic change in Iceland, from the poor relation of Europe to one of its wealthiest and apparently most successful, and now back again, dates from the mid-1990s with the privatisation of the banks and the founding of the country's Stock Exchange.

The free market reforms unleashed a new generation of thrusting, young businessmen, many of whom picked up their banking trade in the United States. They were determined that their country would no longer have to rely on fishing for its principal source of wealth; they loathed the international perception of Iceland as a parochial nation of farmers and fishermen who could not hold their own on the world business stage.

 

[uobboss]

They had learnt at school all about the last Cod War with Britain, in 1976, when Iceland unilaterally extended its territorial waters, desperate to increase the financial yield from its trawler fleet. So, in keeping with the traditions of their Viking ancestors, the new army of corporate raiders went overseas to seek their fortune.

Kaupthing, one of the three banks at centre of the debt crisis, is not even in the top 100 of the world's biggest banks. But its influence on the British economy is out of all proportion to its 124th ranking. In five years it has underwritten more than £3 billion in debt to help finance British deals.

This is why the bankruptcy is not only adding to the turmoil on London Stock Exchange – which at one point yesterday lost eight per cent of its value – but also sending ripples through the British High Street. Baugur, the Icelandic investment house, has amassed large stakes in retailers including Hamleys, House of Fraser, Oasis, Debenhams and Iceland the frozen food store. Question marks hang over their future.

Kaupthing lent the money to Baugur to finance its investment in Arcadia back in 2001, which it then sold on to the British billionaire Philip Green. It also snapped up the UK merchant bank Singer & Friedlander for £547 million in 2005 – a company which has helped bankroll some of Britain's best known entrepreneurs, such as Gordon Ramsay. It also advised the sportswear tycoon Mike Ashley on his troubled £134 million purchase of Newcastle United football club. Kaupthing was also a big investor in the London property market, which has become another millstone round the bank's neck.

The Icelandic bankers were able to raise billions for their expansion from the booming new Stock Market in Reykjavik and because of Iceland's extraordinary well-funded pension system.

For decades one of the poorest countries in Europe, Iceland could finally celebrate as the average family's wealth grew by 45 per cent in five years. GDP accelerated at between four to six per cent a year and the wealth was invested in property that, in turn, fuelled an unsustainable boom in house prices. In the good times, credit companies sprang up offering 100 per cent loans, many in foreign currency such as Japanese yen or Swiss francs. But with the krona in freefall, some loans have doubled in size and thousands are defaulting.

Some did counsel caution. In 2004, Bjorn Gudmundsson, an economist with Landsbanki, said: "We think the economy will cool rapidly in 2007. Much of the investment in infrastructure will come to an end then." But the dealmakers thought the good times would last for ever. In the same year that Gudmundsson sounded his warning, Icelandic investors spent £895 million on shares in British companies alone.

It was almost inevitable that when the international credit crisis unleashed the worst financial tsunami the world had seen since 1929, there was little that Iceland, which disbanded its armed forces 700 years ago, could do to repel the shock waves. Iceland has guaranteed all its savers deposits, but could not extend this guarantee to the hundreds of thousands of British savers who have invested money in their internet savings banks.

 

[uobboss]

The mood of crisis was heightened further when the Government suspended all public service broadcasting, a measure usually reserved for volcano warnings. The chairman of the opposition left-green party, Steingrimur Sigfusson, has called for a coalition government to lead Iceland through its financial emergency.

The trade unions, meanwhile, are pressing for Iceland to begin talks about becoming part of
the European Union, which the government has been reluctant to join for years. The pension funds have now also agreed to help the Government by selling assets.

It took a while, though, for the penny to drop. As recently as this spring, when questions were being asked about the economy, the country was in denial.

Dagur Eggertsson, a former mayor of Reykjavik, said: "Someone called it 'bumblebee economics' because it is hard to figure out how it flies, but it does, and very nicely, too." The bumblebee, though, like the billionaires who thought they could buy up the British high street, is no longer flying high.


http://www.telegraph.co.uk/finance/...al-crisis-Icelands-dreams-go-up-in-smoke.html

 

[uobboss]

东欧南美多国濒临破产边缘

金融海啸袭亚洲东欧南美 东欧南美多国濒临破产

　　中新网10月12日电 香港文汇报报道，金融海啸席卷亚洲、东欧和南美洲，巴基斯坦的外汇储备捉襟见肘，恐怕需要拖欠国债，其它国家如乌克兰、哈萨克和阿根廷亦濒临破产边缘，一些制造东欧地产泡沬的西方银行，股价亦是拾级而下。

　　根据担保国家有能力偿还债务的保险产品—5年期信用违约掉期(CDS)，市场预期乌克兰将有80%机会拖欠债务。

　　乌信贷崩溃 股市累跌73%

　　乌克兰除了要面对银行体系经过信贷狂增数年后濒临崩溃，导致经济裹足不前外，更要应付政治气候由差转坏的困境。该国上周没收当地银行 Prominvestbank，并宣布基辅股市停市，该股市本年至今已累跌73%。另一方面，总统尤先科上周因与国内亲俄阵营政见不合而解散国会，外交人士担心俄罗斯会卷入乌克兰的政治危机中，甚至翻用对付格鲁吉亚的做法入侵乌克兰。

　　环球股市从去年10月的高位下滑，不少人曾相信新兴经济体如中国、印度、巴西和俄罗斯可在金融风暴中独善其身，现在看来这只是一厢情愿的想法。

　　有鉴于最新一轮的冰岛财政危机，法国巴黎银行警告该国政府正逐步迈向破产，同时亦会传染到其它赖以外债为生的经济体系。国际货币基金组织(IMF)亦宣布将动用数千亿美元紧急资金借贷程序，以阻止环球经济骨牌式崩溃。

　　匈牙利政府在当地最大的信贷商OTP银行出事后出手托市，但布达佩斯股市上周四单日跌幅仍达13%，财政部不得不取消国债拍卖。由于匈牙利福林兑瑞士法郎急跌，令当地以瑞士法郎作房屋按揭货币的业主百上加斤。

　　巴国债垃圾级 哈地产泡沬爆破

　　在巴基斯坦，其货币卢比亦跌至纪录低位，标准普尔把该国的国债评级下调至近“垃圾级”的CCC+级，巴基斯坦中央银行的外汇储备更下降至只有 47亿美元(约365亿港元)。分析指，巴国基本上已无力偿还国债或入口任何物品，而且亦不能假定该国将因“战略因素”而获拯救。

　　至于哈萨克的地产泡沫爆破，令当地主要几间大银行要靠向外国借贷度日，估计它们有70%拖欠债务风险。由于该国将经济前景押在油价上，但前天期油价格跌穿每桶80美元大关，触发一篮子的商品期贷抛售潮。若原油价格进一步下跌，就连石油大国俄罗斯的情况也不会乐观。

　　巴西、阿根廷、墨西哥等拉美国家亦受到全球金融危机冲击，股市滑坡，货币汇率跌至多年低位。阿根廷股市Merval指数周五一度下跌10%，收市跌5.54%。

http://finance.sina.com.cn/world/gjjj/20081012/03435380567.shtml

 

[makapaaa]

Peesai is next on the firing squad with such MASSIVE LOSSES charged to Sporns by the Familee! Your SeePeeF is safe? Think again! The $20k bank guarantee itself is very telling already!

 

[uobboss]

usa FDIC limit officially raised to us$250,000

FDIC limit officially raised to $250,000
Federal regulators formally approve the temporary increase from $100,000.

October 10, 2008: 6:18 PM ET

WASHINGTON (AP) -- The Federal Deposit Insurance Corp. (FDIC) on Friday formally approved the increased insurance limit of $250,000 per regular account that was part of the financial rescue legislation enacted last week.

The FDIC board approved the temporary increase per account in a vote at a meeting. The new limits, which extend through the end of next year, also provide for an increase in the insurance ceiling on joint deposit accounts to $200,000 per co-owner of the account from the current $100,000. The limit for retirement accounts held in banks remains at $250,000.

The FDIC board on Tuesday approved a new plan for rebuilding the deposit insurance fund that would more than double the banking industry's average premiums next year. It could be formally adopted sometime after a 30-day public comment period.

The proposed increases in bank premiums would cover only up to the previous insured $100,000 limit per regular deposit account.

Thirteen federally insured banks and savings and loans - including two major thrifts - have failed this year, and more collapses are expected. The deposit insurance fund is now at $45.2 billion - below the minimum target set by Congress and the lowest level since 2003.

The FDIC plan aims to rebuild it within five years to an even higher level than the law requires.


Sg only 20k

 

[makapaaa]

Re: usa FDIC limit officially raised to us$250,000

Sg only 20k

While

[FONT=Verdana,Courier,Monaco][SIZE=-1]Who gets what [/SIZE][/FONT][FONT=Verdana,Century Schoolbook,Georgia][SIZE=-1](without performance bouses)[/SIZE][/FONT]
<TABLE cellSpacing=2 cellPadding=0 width=64 align=right border=0><TBODY><TR><TD>

</TD></TR><TR><TD>

[FONT=Verdana,Courier,Monaco][SIZE=-1]President Nathan, a Japanese collaborator during WWII.[/SIZE][/FONT]​

</TD></TR></TBODY></TABLE>
[FONT=Verdana,Century Schoolbook,Georgia][SIZE=-1]Singapore President's Basic Salary raised to S$3,187,100 (24.9% increase), Singapore's current President, Nathan, was a member of the dreaded Japanese Kampeti (uniform, sword and all) during the Japanese occupation of Singapore.[/SIZE][/FONT]

• [FONT=Verdana,Century Schoolbook,Georgia][SIZE=-1]Singapore Prime Minister's Basic Salary raised to S$3,091,200 (25.5% increase). This is US$2.04 million, or about five times more than U.S. President George W. Bush, who currently takes home US$400,000 [/SIZE][/FONT]
• [FONT=Verdana,Century Schoolbook,Georgia][SIZE=-1]Senior Minister – S$3,043,300 (13.5% increase) or US$2.01 million. [/SIZE][/FONT]
• [FONT=Verdana,Century Schoolbook,Georgia][SIZE=-1]Minister Mentor – S$3,043,300 (13.5% increase) or US$2.01 million[/SIZE][/FONT]
• [FONT=Verdana,Century Schoolbook,Georgia][SIZE=-1]Deputy Prime Minister – S$2,452,500 (18.8% increase) US$1.62 million.[/SIZE][/FONT]
• [FONT=Verdana,Century Schoolbook,Georgia][SIZE=-1]Minister and Senior Perm Sec – S$1,593,500 (32.5% increase) or US$1.06 million . [/SIZE][/FONT]
• [FONT=Verdana,Century Schoolbook,Georgia][SIZE=-1]Entry Superscale Grade – S$384,000 (3.3% increase) [SR9 Grade][/SIZE][/FONT]
• [FONT=Verdana,Century Schoolbook,Georgia][SIZE=-1]Member of Parliament – S$216,300 (23.2% increase) [/SIZE][/FONT]
• [FONT=Verdana,Century Schoolbook,Georgia][SIZE=-1]Average Singaporean: US$26,000 (S$43,104 or S$3,592 per mo) Source: Singapore Ministry of Manpower[/SIZE][/FONT]
• [FONT=Verdana,Century Schoolbook,Georgia][SIZE=-1]The poorest 10% in Singapore earn S$3,600, or S$300 a month.[/SIZE][/FONT]
• [FONT=Verdana,Century Schoolbook,Georgia][SIZE=-1]Welfare payments to the needy S$290 a month.[/SIZE][/FONT]

 

[Ah Guan]

This is quite funny:

http://techie-buzz.com/friday-fun/iceland-for-sale-on-ebay.html

No offence to our readers from Iceland, and neither are we trying to make fun of their recent economic problems, but we could not stop laughing when we saw a lunatic put up Iceland for sale on eBay.

The sale started at 99 pence and was heavily bid on receiving 84 bids from 26 people, the last bid was a whipping 10 million pounds. The bid read:

"Located in the mid-Atlantic ridge in the North Atlantic Ocean, Iceland will provide the winning bidder with — a habitable environment, Icelandic Horses and admittedly a somewhat sketchy financial situation,"

There were several funny question being asked by bidders which included "Do you offer volcano/earthquake insurance?", "Is it possible that my payment will be frozen?", and "Will you accept C.O.D. as a form of payment?"

The bid has been taken off by eBay as of now, but this definitely shows how a unregulated market can have lunatics selling things that do not belong to them. What next, do we see this blog on sale at eBay.

 

[DIVISION1]

This would not be the first time a government has declared bankruptcy. Please refer to 1982 Mexico

 

[makapaaa]

This would not be the first time a government has declared bankruptcy. Please refer to 1982 Mexico

What about a govt, which is leegally corrupt, morally bankrupt, and possibly financially insolvent? Probably 1st in history?