Uncharted Territory

October 10, 2008

So Long, And Thanks For All The Dosh!

Filed under: Credit crisis, Economics, Moral hazard — Tim Joslin @ 7:53 am

We should never have let them have all the cod!  It helped make Iceland one of the richest countries in the world, per capita.  And the law of unintended consequences has ensured only trouble has arisen from all this easy money.

I’m a bit pushed for time this morning – I have to find a bomb shelter to hide in before the UK stock market opens – but I can’t resist the temptation to make a few observations about the financial terrorism Iceland has unleashed on the UK.

You couldn’t make it up.  It is positively surreal watching the improbably named Icelandic PM Geir Haarde take on the great clunking fist of the strangely revitalised Gordon Brown (please send me a large supply of whatever he’s on this week).  I suggest they settle it by a duel in the snow with large wet cod.

I went to an old-fashioned grammar school where I studied Latin for 4 years.  I forgot all of it.  In fact, I never really learnt the language in the first place since it was easier to memorise Pliny’s letters, because one of them was always the only “unseen” translation included in the exam.  At some point, though, I did pick up the phrase caveat emptor – “let the buyer beware”.  Which may as well be Klingon as far as the average UK council is concerned.

For a while I thought Cambridge City Council had by some fluke (working really hard to keep up the fishy theme) avoided the blunder of putting my hard-earned cash in an account with SmellsabitoffBank.com.  But no, they’d been doubly incompetent, of course.  They’d lost our money and were about the last council to fess up.

I’ve always tried to make sure my savings are insured.  Admittedly, the main way I’ve achieved this has been by never having enough to exceed the limits guaranteed by the Financial Services Compensation Scheme.  I don’t know why I bothered even thinking about it, though, since it seems the taxpayer would have just bailed me out anyway.  Moral hazard, or what?

But our councils seem to have given absolutely no thought whatsoever to whether our money was safe.  Surely, given the suspiciously generous interest rates being offered by these banks, they could have protected us all by asking investment banks to write appropriate Credit Default Swap (CDS) contracts?  Oh, sorry, lost my head a bit there.  I forgot that offering that sort of insurance is evil greed and companies doing it should be vilified and bankrupted.

Still, silver clouds and all that.  I’ve wanted to visit Iceland for a while, but have been put off by reports of people having to pay £10 for a beer.

And, boy, are those Icelanders going to regret what they’ve done when all those previously priced-out hen-night parties start arriving on easyJet flights from Newcastle to Reykjavik.

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3 Comments »

  1. I think your humour here is misjudged, one could even say it was out of plaice.

    Comment by Mark — October 10, 2008 @ 10:53 am

  2. […] issues — Tim Joslin @ 10:17 am Several agendas – or should that be “agendae”?; I told you there was a brave attempt to teach me Latin at school: in fact, I now recollect, so dedicated was […]

    Pingback by Countercyclical Conundrums « Uncharted Territory — October 17, 2008 @ 10:17 am

  3. […] some more prefs (with a less punitive coupon than before – why give overseas banks an advantage, they cause even more problems?), the authorities will just have to muddle through, burying the biggest black holes in the […]

    Pingback by It’s the Short-Sellers - Do the Math « Uncharted Territory — January 22, 2009 @ 11:04 pm


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