A lot can happen in two months

It’s a recession when your neighbor loses his job; it’s a depression when you lose your own.

A month ago I wrote a post about the situation facing people I know. Above is a well known economic cliche attributed to Harry S. Truman. What would Truman make of what is happening in Iceland. Text in italics is from last month’s update.

A friend in his forties lost three jobs in the last year. A year ago he held a top level management position at a big financial institution. Now he says he is applying for every single job there is, jobs like managing a pizza joint.

A friend in her thirties lost her management position at a computer company. She is preparing to leave the country.

A relative in his fifties lost his job as a salesman.

Four acquaintances who lost their jobs at a bank have fled to Europe to work as unskilled labor.

A relative lost his job at a bank.

A friend who could count on 40-50 extra hours each month at his job has lost all the extra work, plus his regular work being cut down to 85%.

Another friend has had to accept a 15% pay-cut at a computer company.

A business that employed more than 30 people earlier this year has been shut down, everyone losing their jobs.

A girl in her twenties, saddled with debt on her apartment, who also lost her job has begun charging for sex to make ends meet.

I went to a party where 12 people in their twenties had lost their jobs, all with financial obligations. Many were extremely bitter, most were in shock. One guy cried. Their world had collapsed.

One girl in her twenties with three small children has been laid off from her bank call-center job. Her husband, a builder as well. They had taken a home-loan in a foreign currency and the payments had gone up to 230.000 ISK, a monthly wage. She was rehired in a smaller capacity but has to postpone her graduation from Engineering at the Unversity of Iceland. She is thinking of sending her husband to get a job abroad. I suggested Poland.

My friend, 32 has been laid off from his job as a car-salesman. This summer, he and his girlfriend bought a new home. They didn’t manage to sell their old one. He is seriously thinking about moving abroad but he has lived in the same area in his whole life and has had a good life there. His other source of income, laying parquet-floors is non-existent as well. They have an eight month old daughter.

A friend is going through bankruptcy proceedings. He is 31 and has basically lost everything.

Another friend’s car-payments went from being 33.000 ISK per week last Christmas to being 105.000 this month. His car was worth 3.5 million ISK last year and his loan was for 2.3m ISK in foreign currency. It is now 5.6m and he lost his job last week. He wants to go to school but probably will not afford it.

My girlfriend is studying in the UK. On October 8th she transferred her student loans to her British bank from her Icelandic bank, as you do. She had to pay tuition, rent, telephone, living expenses etc. She received the money a month later and had to use her savings to survive. Last year the GBP was around 130-140, now it has been between 190-220. Her tuition and living expenses have almost doubled, not because she is receiving better schooling, more classes or living more luxuriously, but because she was unlucky enough to have been born in the same country as the Icelandic Krona.

Another friend in his twenties bought a house in August, with a loan in a foreign currency. He and his wife cannot sell their old home. His job is in danger, their payments are through the roof. They have two young daughters.

A former workmate in his early thirties had to take a 10% paycut. He was one of the staff that kept their job at a computer processing company.

I met a buddy from soccer who lost his job at one of the TV stations. He has worked there forever.

I met another former workmate from a bank who lost his job. And then another. Both are in their forties, prime of their lives.

A relative lost her job at a real-estate agency.

I met a former workmate who lost his job at a bank but was hired to another company to clean up in there by firing just about everybody.

My friend’s father in law lost his CEO-job as well.

I met a cousin last month who went to college in the UK and has lived there since, starting a family, worked and bought a home. She is visiting Iceland and I tried explaining price indexation to her which is the common form of home loans in Iceland. She grasped for air and realized how royally screwed everyone in the country is.

And this is the second month of the crash. How is January 5th going to look?


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