Iceland ignored “too big to fail” – and won!

Iceland found another way to clean up the financial crisis…Unlike the U.S., the country let its banks fail and bailed out lots of consumers.


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❝ Last week, I was at an ETF conference in Reykjavík. As I was flying there, it dawned on me I know practically nothing of Iceland. What little understanding I had, had come second-hand, via Michael Lewis’ epic tale of Iceland’s financial collapse, “Wall Street on the Tundra.” His 10,000-word Vanity Fair missive is practically a Norse Saga of its own.

Lewis explores the Icelandic bubble in delicious detail. The short version is that the Icelandic banks scaled up their debts from a mere few billion dollars to over $140 billion, without growing the asset base at the same time. To quote Lewis quoting an economist, it was “the most rapid expansion of a banking system in the history of mankind…”

❝ Unlike here in the states or in Europe, the Icelanders told the bankers to piss off. Instead of bailing them out, they were sent into bankruptcy. The results were a fast and sharp decline, followed by a rapid, post-crisis economic recovery — faster and stronger than any other country in the world.

Excerpted from notes posted, today, on Barry Ritholtz’s blog…The Big Picture. At the end, he links to a larger piece he wrote for BLOOMBERG…Iceland Found Another Way to Clean Up a Financial Crisis. An interesting, educational read about an alternative solution to the Great Recession – that worked.

Completely separate; but, culturally important. Images of Iceland by Om Malik.

Shell and Exxon worried about the climate change they were causing – and told no one else…

❝ In the 1980s, oil companies like Exxon and Shell carried out internal assessments of the carbon dioxide released by fossil fuels, and forecast the planetary consequences of these emissions. In 1982, for example, Exxon predicted that by about 2060, CO2 levels would reach around 560 parts per million – double the preindustrial level – and that this would push the planet’s average temperatures up by about 2°C over then-current levels (and even more compared to pre-industrial levels).

❝ Later that decade, in 1988, an internal report by Shell projected similar effects but also found that CO2 could double even earlier, by 2030. Privately, these companies did not dispute the links between their products, global warming, and ecological calamity. On the contrary, their research confirmed the connections.

❝ The documents make for frightening reading. And the effect is all the more chilling in view of the oil giants’ refusal to warn the public about the damage that their own researchers predicted. Shell’s report, marked “confidential,” was first disclosed by a Dutch news organization earlier this year. Exxon’s study was not intended for external distribution, either; it was leaked in 2015.

I haven’t much concern for the excuses these firms and their peers raise to shield their greed, sophistry. Nor am I surprised at the culpability of our politicians, the ignorant acceptance of corporate lies by the US population in general. We are the poster child for advertising abuse and lies.

“Not a cough in a carload” indeed! Multiply that by millions and begin to comprehend the global crime we face – living in the belly of the beast that has been devouring the whole world for decades.