A couple of years ago I researched CDs in foreign counties as an
investment. Iceland had the highest interest rates -- above 10
percent, if I recall correctly. My weak knees kept me from going for
it, fortunately. I suppose overpaying on cash deposits is a flip side
of loaning to unqualified borrowers.
Dan
Http://www.coolhanduke.com
On Dec 27, 2008, at 7:20 AM, "Robert Naiman" <[email protected]
> wrote:
Isn't it the case that a big part of what sets Iceland apart is the
ratio of the international exposure of its banks to the size of its
economy. That is, even if it were true that Iceland's banks weren't
more aggressive than say, U.S. banks - which is sort of like saying
that you didn't have any more to drink than the other alcoholics at
the party - the difference was that the international exposure of
Iceland's banks was much greater than the capacity of the Iceland
government to bail them out. They were too big to fail, but they were
also too big to save.
--
Robert Naiman
Just Foreign Policy
www.justforeignpolicy.org
[email protected]
Promote Concrete Steps to Engage Iran
http://www.change.org/ideas/view/take_concrete_steps_to_engage_iran
(follow the link, click the blue box at left to vote for this idea to
be presented to President Obama)
On Sat, Dec 27, 2008 at 8:47 AM, Doug Henwood <[email protected]>
wrote:
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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