Iceland Is Screwed

The Icelandic government seized the nation’s largest lender, Kaupthing Bank. “Effectively the krona can’t be traded at the moment because there are no more banks to clear the trade,” a foreign-exchange trader told Bloomberg. Things have gotten so bad there that Bjork was forced to take out a second mortgage on her collection of screaming children made of glass hiding under a field of sugar.

(Photo: Zach Klein)

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  1. MonkeyMonk says:

    Hopefully you weren’t lured in by any of those enticing 16% APR CDs.

    • Megladon says:

      @MonkeyMonk:

      I saw some of those deals, I just didnt have the 10k minimum needed to invest with the bank I saw. Likely a good thing too, now I’ll just leave my money in an American bank, where it will devalue itself on American soil!

  2. Ben, weren’t you interested in trying to get a hold of some of their 15.55% rates less than two months ago? [consumerist.com] I guess it’s good you couldn’t find a bank to invest in!

  3. mabus says:

    i think the witty comment about Björk should have been that the crisis has caused to have to reunite with the sugarcubes and play second banana to Einar Örn’s more-annoying-than-björk’s vocals.

    God save us all.

  4. HRHKingFridayXX says:

    Screwed investment wise, but aren’t they one of the few sustainable countries (energy wise)? If I lived there, I wouldn’t be too worried. I would take free energy for life over investments any day.

  5. …her collection of screaming children made of glass hiding under a field of sugar.

    OMG BJORK HAS A NEW ALBUM COMING OUT?!???!!?

  6. cmdrsass says:

    I find it amusing that the bank’s name begins with “Kaput” just like the Icelandic economy.

  7. Farquar says:

    This is the first article on a Gawker site I’ve ever seen that has less text after the jump then on the main page..

    How does that even work.. technically speaking?

  8. no.no.notorious says:

    i’m not surprised about the bjork thing. maybe “famous” artists waste their advancement on lavish homes, cars, and other luxuries….which is supposed to be paid back to the record company after selling bunches of albums. unless you tank (which, to this day, i have no idea why bjork didn’t)…then you don’t have to pay it back.

  9. stopNgoBeau says:

    I think the title should be “Iceland is Frozen”… you know, frozen as in assests frozen… OK… maybe its not that funny.

    • P_Smith says:

      @stopNgoBeau: I think the title should be “Iceland is Frozen”… you know, frozen as in assests frozen… OK… maybe its not that funny.

      How about “the debt will Reykjavik on their economy”? ^_^

  10. Corydon says:

    So does this mean that a nice vacation in Reykjavik might actually be affordable?

    Course with winter coming on, that may not be as attractive…

  11. quagmire0 says:

    20 bucks says Warren Buffet owns Iceland by the end of business today. :D

  12. toddkravos says:

    Forget about Björk.com. I’m more concerned for the guys in Sigur Rós ;)

  13. RichardHespera says:

    Yes, very funny to joke about Iceland… but I have the equivalent of approx $15,000 in a UK savings account (I’m in the UK) that was ultimately owned and operated by an Icelandic bank (Icesave).

    That money is now locked up, I can log in but no transactions can be made. Just so we’re clear – it was a UK based savings account run by a company registered in the UK but owned by/part of the Icelandic bank. A lot of people seem to be equating these banks with some shady offshore account, but this was UK regulated and the UK government collected taxes on my interest payments.

    In theory I should claim my savings back from the Icelandic protection scheme in the first instance (first 20,000 euros) and after that the UK protection scheme (roughly each country’s FDIC equivalent). Except that there is no way the Icelandic government/regulator is going to honour the commitments to depositors. The banks had been allowed to get many times bigger than even the whole Icelandic GDP let alone the protection scheme. The country could be bankrupted.

    Thankfully the UK government have announced that they will payout in full and pursue Iceland centrally. I await details on how to claim, but jokes about Bjork aside… a lot of normal everyday savers are losing access to their money. It may take months to get it back. Maybe we never will. In the meantime people will suffer.

    So how many US banks are ultimatly controlled and owned from overseas? Several UK ones are and the regulators (worldwide) have been giving banks a lot of freedom in recent years… Iceland’s problems are very close to home for me, maybe some other country will prove to be closer to you than you thought! Time to very carefully check who you’re doing business with and exactly what protection you have, and from who is behind that pledge of protection.

  14. azntg says:

    Be suspicious when a bank raises the APR for CDs to an unusual/uncharacteristically high level. Got it!

  15. blueballstreet says:

    What can we learn from Iceland’s crisis response? When your world comes crashing down, sometimes your best and ONLY option is to tap back into your main strength that sustained you for the long haul. You also might have to leave your pride at the door, to find a less appealing but stable job that can keep you afloat until the storm calms.