You forgot a few things... "Screw some depositors, but not others; break your own laws; renege on international treaties". It's working beautifully indeed.
Euro-area depositers in search of high yields by throwing money into Iceland banks should have known what they were getting into. Make bad decisions and lose your money. That's all a part of it. "Renege on international treaties" ... please, you sound like those yahoos who still say the U.S. must follow SALT to the letter Iceland's economy is doing very well. Central bank is hiking rates.
"Break your own laws" ... was that a joke? Let's give an ambitious (and unshackled from politics) prosecutorial team subpoena power over Treasury and the Fed (not to mention the Eurogroup) and we'll see what laws have been broken.
Well, how would you like the FDIC to say the exact same to you when the bank you have your money in goes down? To reiterate, I am not referring to the large institutional deposits made by various local council idiots across the UK. I am talking about the individual Ma & Pa accounts that were supposed to have been covered to a common EEA minimum, according to both international treaties that Iceland was signatory to, as well as Iceland's own laws. Well, the EEA is governed by a set of treaties that outline the minimal duties of the member countries. Delivering on these commitments is the price members of the club pay to recv the benefits of membership (i.e. free trade, etc). I don't know anything about SALT, so I cannot comment. Point is that Iceland and all its citizens (not just the bankers) have enjoyed years of unprecedented prosperity, which was partly a result of the country's membership in the EEA. The cost of this membership was well-known to everyone upfront. When Iceland was asked to deliver on its promises, it took the easy way out and reneged. If you perceive this as "doing very well" and that taking responsibility for one's actions isn't necessary at every level of society, what possible hope is there for any sustainable economic development? What does this have to do with anything? I am talking about Iceland's very own laws that govern the depositor protection provisions.
What do you think a bankruptcy is? It's reneging. I'll ask you again, do you think US and EU officials have not skirted/broken a few rules and laws as the game was being played since the crisis hit? As far as I'm aware, the guarantees given to overseas depositors was nothing like the FDIC guarantee. In any case, this is being litigated, isn't it. Let's hear what a judge has to say about this supposed guarantee being screamed about by the Brits and the Dutch. When you're bankrupt, the best thing to do is admit it, deal with it, crash, and rebuild.
It has everything to do with everything!!! What do you think governments do when times get tough? They twist, bend, break rules/laws to achieve whatever means they like. You would hold Iceland true to every letter on the books while looking the other way at what US or EU officials have done?
No, I don't. As I mentioned, the guarantee offered to overseas depositors, according to EEA law, HAS to be the same as the one offered to domestic ones. However, as you rightly point out, it is being litigated/negotiated. I agree w/you about the best thing to do about bankruptcy, in theory. However, you're forgetting another important element of it, namely, the avoidance of moral hazard. Bankruptcy is supposed to be costly for the borrower to make sure they don't make stupid decisions over and over again. How do you propose dealing with that in the case of Iceland? Along these lines, let me ask you this. Who should bear responsibililty for a complete failure of regulation and foresight that has allowed the Icelandic banking system to get so completely and utterly out of hand? Moreover, I would point you to the Irish example. They doing the completely wrong thing in not refusing to pay for their past excesses? Not at all... But I do draw a line at reneging on your very basic promises made to the retail depositors of banks that you're supposed to be regulating and overseeing.
The bankruptcy for Iceland was costly for the country. The economy suffered a horrible crash. Moreover, Iceland has demanded accountability from its bankers, charging several with real crimes. Instead of elevating those who oversaw the disaster to even greater positions of power (think Geithner and Bernanke in the U.S.), it has disposed of or jailed those fools. The world was going to have to eat a giant shit sandwich following the credit bubble - the only question was how to do it. Put it on the backs of citizens for another generation or two and have economies flatline for years, or wipe the debts clean, suffer a quick crash, and build from there. As an apartment building and commercial space owner, I've been privvy to thousands of credit reports and stories of individuals and businessmen. Bankruptcy isn't the bad thing. It's the things that happened that led to the situation that made bankruptcy necessary that's the bad thing. Bankruptcy at that point is actually a good thing. There's a reason bankruptcy has been part of society for as long as there's been society. Yes I'm aware that people aren't countries so the comparison isn't totally apt, but it's important nonetheless. Now, I'm going to enjoy this beautiful meltdown of a day and await the next market-saving rumor!
covered my AUD short at 1.0205. I am pretty positive it will end up lower, but typically I am a short term trader, and getting 160 pips in one day with full-size on is very good for me!!!! Another of my logic to cover now was employment report coming tomorrow. My logic is if the number is against me, I would get an opportunity to possibly re-load my short. And the good thing about trading discipline is that I am not gambling before a market moving number. However, yesterday I wrote that I will keep the position through the employment number. When I wrote yesterday, I was expecting AUD to be somewhere in the range 1.035-1.045 during the unemployment number and so didn't want to lose potential profits by exiting my position - thinking about Livermore's quote - "I could see a clear rally coming and I still sat through my position and half my profits went away, but it didn't occur even once to me to close my position since it would have meant that I might have lost my position." Probably in all truth what this change of thought illustrates is an important psychological bias "People tend to cut their winners short". But I won't be so harsh on myself as I did increase the AUD short position 3 times at different levels today before closing it all.