On Dec 27, 2008, at 1:14 AM, michael perelman wrote:
I'm trying to understand today's story in the Wall Street Journal
about Iceland. The article says that the banks were offering more
than 7% interest on deposits and the Icelanders were borrowing money
cheaply from places like Japan. To whom were the banks lending at
rates substantially more than 7%? Or were they just using the funds
to speculate on a domestic bubble?
Richard Portes
<http://www.leftbusinessobserver.com/Radio.html#081023>
told me that the Icelandic banks weren't doing anything aggressive
with their funds, and that the image of the country as a giant hedge
fund was a slur. An Icelander who listens to the show emailed me to
say that Portes was close to the banks and not inclined to be
critical. Unfortunately, the Icelandic MP I had on the week before
<http://www.leftbusinessobserver.com/Radio.html#081016>,
a union leader and chair of the Green delegation, couldn't say much
more about the origin of the situation than that the capitalists
caused it.
Doug
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