Police fighting protesters in Reykjavik

A New Years Eve tradition is an extremely boring talk show where the leaders of the parties in parliament gather to discuss the year at its end.

Two days ago word spread that protesters would appear outside the downtown hotel where the talk show has traditionally been held.

Channel 2 knew about this and wasn´t going to miss this great chance of historic television.

Of course the protests got out of hand. Right after Valgerdur Sverrisdottir, head of the Progressive Party and one of those who handed the banks to the politically connected businessmen had said that it had all been proven to be beyond doubt, when it hasn´t and Ingibjorg Solrun Gisladottir, foreign minister repeated her words about those who protested not being representatives of the nation, all hell broke loose.

A “disgraced” Sigmundur Ernir Runarsson, host of the talk show told how they had to cut the show after equipment had been damaged.

He must have been smiling on the inside because this was the most interesting New Years show ever. Fantastic television.

Violence should always be abhorred. But the government has been fortunate so far as the nation has shown them incredible patience in the twelwe weeks since the economic collapse. As I have predicted several times before on this site, this is what will happen if people don´t see any sort of reconciliation, which so far has been non-existent.

No resignations by politicians, no lawsuits against the businessmen who owned the banks, no action when those who bankrupted Iceland´s largest companies are allowed to buy them back for a fraction. When those who are elected to lead show extreme lack of action, they are bound to eventually face extreme actions by fed up citizens.

It all leads to people having no trust in the society the live in. And that is when things that have gone terribly wrong take a turn for worse.

The year of the fall

Photo from 123.is/jobbioggummi

The Independent Party and the Progressive Party privatized the national banks in the beginning of the century.

When Bunadarbankinn was handed to Progressive Party members on a silver platter by Valgerdur Sverrisdottir and Halldor Asgrimsson, the Independent Party´s David Oddson and Geir Haarde felt the need to hand Landsbankinn to Independent Party favorites Bjorgolfur Gudmundsson and Bjorgolfur Thor.

No one in those groups had any experience of running big international financial institutions. Within five years Bunadarbankinn had become Kaupthing, one of the world´s 100 largest banks and one of the 700 largest companies in the world.

It seemed like magic, it turned out to be sorcery.

Bjorgolfur Gudmundsson, Bjorgolfur Thor, Agust Gudmundsson, Lydur Gudmundsson, Jon Asgeir Johannesson, Olafur Olafsson, Finnur Ingolfsson, Karl Wernerson, Robert Wessman, Palmi Haraldsson, Hannes Smarason abused the power that came with owning a bank to purchase the rest of Iceland, and expensive acquisitions abroad with loans from their own banks. Bjarni Armannson, Larus Welding, Jon Sigurdsson, Hreidar Mar Sigurdsson, Sigurdur Einarsson, Ingolfur Helgason, Sigurjon Arnason and Halldor J. Kristjansson made this possible as CEO´s.

There was no competition, but pure oligarchy in Iceland.

The Independent Party, the Progressive Party and Samfylkingin turned a blind eye. Members of parliament got special treatments within the banks. The Financial Authority was crippled by limp Independent Party management.

The Left/Greens have failed as an opposition leaders for offering extreme solutions where sensible ones are needed.

The Liberals have cemented themselves as anything but sensible.

Iceland´s ruin has been extreme. The International Monetary Fund describes it as the worst in history, compared to the size of the economy.

No reconciliation has been made. None is apparant on the horizon.The politicians stay put in their offices. The businessmen are dumping debt inside the nationalized banks and buying their companies back for change.

The great battle of our time is at its beginning. The one between citizens and political parties.

Happy new year!!!

The poisoned chalice

No one applied for the job of Special Attorney who is supposed to investigate the fall of the Icelandic banks.

It might become a poisoned chalice for the person who would take the job. He/she would have to declare all of his/her connections to polticians, businessmen etc, as well as financial connections.

Goes to show how difficult it is to speak up in a small country where everybody knows your name.

The King is dead

Burger King is dead… in Iceland.

The fast food giant will shut its doors after today, its managing director saying that the current economic situation has made its operation unbearable.

Landsbankinn loved to party, with the Independent Party

The Althingi ombudsman has reprimanded Geir Haarde for hiring Bjorn Runar Gudmundsson from Landsbankinn to head the new position of managing director of Office for Economic and International Finance.

This is as people are noticing the pattern within Landsbankinn where Independent Party members were shoe-ins for top positions. Sigurjon Arnason CEO, Atli Atlason Head of Human Resources and Viggo Asgeirsson Head of Marketing. Thorlindur Kjartansson and Erla Osk Asgeirsdottir were the most high-profile of a host of members of the Association of Young Independent Party Members and members of deiglan.com, a webzine linked closely with the party.

The director of the board was Kjartan Gunnarsson, who was also managing director of the Independent Party. The owners were Bjorgolfur Thor and Bjorgolfur Gudmundsson who were handed the bank by David Oddson and Geir Haarde in the privatization of 2003 in spite of having the lowest offer. It caused such disappointment with one of the members of the privatization committee that he resigned. It was a well known fact in the banking world that you had to be a member to have a better chance of a good job at Landsbankinn.

Other banks were wary of the relationship. It came as a shock one day in 2005 to see Landsbankinn and the Student Loan Organization announce a new service in the bank where students could get student loans without someone guaranteeing them. Managing the student products at Kauphting I called the Student Loan Organization and asked why other banks on the free market had not been offered this opportunity from the official agency. The answer revealed that they had tried to let other banks know about it. The way they did it guaranteed that they wouldn´t. Landsbankinn got a photo opportunity with the head of the Student Loan Organization, an Independent Party official and the head of the Student´s Association at the University of Iceland, the wife of the marketing manager of Landsbankinn…and Independent Party member. The fund´s annual report even celebrates this milestone agreement with the bank and touts its meaning for students. Other banks had all copied the service by then, but Landsbankinn got the bragging rights in the market of being first.

Why this public institution did not announce such big news with all the banks did not come as a surprise.

We should also remember after the closing of markets on June 19, the government announced extensive new plans in the housing and financial markets. Landsbanki CEO Halldor Kristjansson sent an email to members of the board of the Association of Banks and Financial Institutions which proved that he knew about the plans before they were announced.That same day Landsbankinn traded heavily in housing bonds, making a handsome profit.

Could have been

All of this pain could have been averted if a sound monetary system were used.  Any recovery will be greatly hindered unless a sound monetary system is used.

From Run to Gold