The unsupervised free market keeps rolling

The attention has been drawn to an interesting company called Stim, ehf. This small company managed to borrow 20 billion ISK from Glitnir last year to buy stock in the bank itself and FL Group which at the time was in a free fall.

Morgunbladid today implies that Jon Asgeir Johannesson and Hannes Smarason, owners of the bank and the investment company had founded Stim in order to buy shares in FL Group to stop its worth from detoriating on the market. Obviously this would be outrageously illegal and a text-book example of how thugs let loose unsupervised in a free market can be destructive. Their front, Jakob Valgeir Flosason is not answering the media.

It is also indicated that Glitnir lent FL Group billions after the latter had declared insolvency. So the losers in the whole thing are Glitnir’s other stock holders, its customers, competitors and the market.

Hannes and Jon Asgeir are hovering over ruined companies with the view to buy on the cheap. Meanwhile Kaupthing’s former boss, Sigurdur Einarsson is circling around Kaupthing’s operation in Luxembourg, backed amongst other by Landesbank from Germany. He like Jon Asgeir are obviously not concerned that the government will launch an investigation into what happened in Tortola.

And they might end up winning the lottery in the economic disaster. First they massively indebted, then bankrupted their companies after lending themselves money to invest elsewhere, getting away with bonuses and dividends aside from the company perks, then got the taxpayers to pay the bill and now are getting the companies back, stripped of the crippling debt.

Somewhere in heaven or hell, Milton Friedman must be laughing himself senseless.


4 Responses to “The unsupervised free market keeps rolling”

  1. 1 Allen Taylor November 23, 2008 at 9:46 pm

    Nice writing. You are on my RSS reader now so I can read more from you down the road.

    Allen Taylor

  2. 2 Roy November 24, 2008 at 9:19 am

    What´s the final toll going to be regarding the folks that have screwed us royally? How many will expatriate because they are no longer recognized as Icelanders but as vermin which they truly are. A lot of this screwing was coldly calculated by the financial in-crowd over a few glasses of wine. Sure, there were mistakes that were made and couldn´t be foreseen but the cross ownership bullsh_t and similar ploys was plannned deceit! What would Egill Skallagrímsson have done with these people?

  3. 3 drafnsson November 24, 2008 at 11:58 pm

    Roy, Egill would have shown them the axe. Literally. Geir will not. But it will be hard for him to show his face around for the rest of his life. Thanks for your many good comments, keep them coming.

    Thanks Allen.

  1. 1 Financial sorcery « Economic Disaster Area Trackback on November 30, 2008 at 1:10 pm

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