The Left Green party wants to abolish the price-indexation, “when Iceland has reached financial stability”!
Good one.
Next on their list of campaign promises is a sunny day…sometime.
Archive Page 2
The “Notice of statement of affairs” document shows that Baugur took the box at St James’ Park on a two-season basis. The £225,000 owed would have been higher but the company agreed to a “payment plan” at an unspecified point in the past and around £40,000 was paid down.
From The Telegraph
Hard times have hit Iceland, as they did in 1875. And as they did in 1875, Icelanders are looking to Manitoba for a better life.
Recently, about 500 people attended a seminar in Reykjavik, put on by the Icelandic Directorate of Labour and the Canadian Embassy. The topic was on a recent agreement regarding work opportunities for Icelanders in Manitoba, and on temporary work permits and permanent-resident permits in Canada.
“I’ll take anything that’s on offer,” said Ragnheidur Gunnarsdottir, a single mother of three children, who has a degree in commerce. She last worked as a hair stylist, has been unemployed since last fall and hopes she will get a job in Manitoba. “I’m ready to go anytime,” she said.
From the Winnipeg Free Press
Then M.E.G.A. surprised me by asking what people thought of his country — he was wondering if people viewed Iceland as a punch line .
and
“We had so many positive things to write about. Suddenly all we had was bad news,” Georg said.
The economic crises had at least one silver lining for Sprengjuhollin.
After we spent an hour talking about the Icelandic economy over drinks and snacks, I picked up the tab, figuring I could expense it under “Icelandic economic bailout.”
From the Statesman
Inexplicably, nearly all of the bank executives, board members, and “experts” remain. Although the government has nationalized all of the banks, it has made no apparent effort to control or investigate the individuals who provided such stellar advice. They are obviously indispensable.
Simon Johnson and James Kwak wrote in the New York Times that the lesson of the 1997 Asian financial crisis is that “when insiders have broken a financial institution, the most direct remedy is to kick them out. … We should not let people think that the best way to guarantee job security is to lose lots of money in a really complicated way.”
From Iris Erlingsdottir at the Huffington Post
A mortgage reduction plan would be cheaper than the alternative
Published March 21, 2009 Uncategorized 1 CommentVilhjalm A is back on the subject of mortgage reductions. Sounds a whole lot more thought through than the throwing around of percentages that the politicians running have been offering.
Here goes:
Back to the costs of such a mortgage reduction plan for Iceland:
“Tryggvi Thor Herbertsson and the Progressive party have introduced ideas of 20 percent write off of the debts of the homes and companies… The twenty percent write off of the debts of the homes and companies would cost 800 billion krona according to the calculation of the Frettabladid. It may be expected that the housing debts of roughly 78 thousand homes are in total around 1300 billion krona and that was calculated from information about the distribution of housing debts which the central bank of Iceland has published. There of are close to half, or around 600 billion krona housing loans of homes in poor position of owners equity, that is homes that have little or negative financial part of their homes.
The owners equity says nothing about the payment ability of the homes. As well as the fund loans of the pension funds 165 billion krona. 20 percent write off of the housing debts only would so cost 300 billion krona.
The debts of the companies in the new banks are around 2500 billion krona and the same write off of their debts would cost 500 billion krona. Around 3000 billion krona of company debts were left behind in the old banks.
Only the part of housing debts are in the three banks. As well as the 165 billion krona from the pension funds are the loans of the housing financing fund at least 140 billion krona. Then the savings funds banks loans are still left out. The part of the three banks in real estate matters is less than half of the housing loans and so most of the write off would be used to pay off loans elsewhere, not the banks. ”
So – a minimal mortgage-reduction plan for homes most in danger of default would cost:
– at 20% reduction, 120 billion ISK
– at 50% reduction, 300 billion ISK
A larger mortgage-reduction plan would cost:
– at 20% reduction, 260 billion ISK
– at 50% reduction, 650 billion ISk
Even with the large mortgage deduction, the write-off is not all that large. It’s a little less than the Icesave debt.
If you add conditions to the debt-reduction, then the amount would be smaller. For instance, the total assets of the homeowner could be factored in. If the homeowner has eg more than 200 thousand euros total assets, then they wouldn’t qualify, or if they have 100 thousand euros assets then they they would only get a 25% reduction. Or mortgage debt would be forgiven as a percentage of the homeowners’ total assets.
Or the mortgage write-down could be concentrated on those homes purchased during the bubble years, say, 2004-2008.
Also, those owing a relatively small amount of mortgage debt are not likely to trade 50% of future profits for a reduced mortgage.
You get the idea – it’s possible to alter the formula so that mortgage relief goes to those who need it the most, or according to what would be acceptable to the government’s budget.
One objection might be that homeowners would just immediately sell their house and buy the house next door, or buy no house at all. I suppose this could be fixed by putting in a condition that the mortgage-reduction is nullified if the house is sold within, say, 2-3 years.
Also, factor in the costs of lost state revenue if large numbers of people emigrate or go bankrupt:
– if the owners in danger of default go bankrupt, then the state would lose at least 300 billion
– if 40,000 working people emigrate, then the state could lose, for instance 20 thousand euros tax per year @ 30 years = 800,000,000 euros
– if lots of people go bankrupt or emigrate, then this drives down the housing market even more, and then there will be more defaults, banruptcies and emigration.
Spegillinn, a radio show on the state channel reported last night that a business owned and registered by Landsbankinn had been dissolved in November. The business called Nerée, formed in Luxembourg by a business owned by Landsbankinn in Sweden and worth 145 million EUROS was shut down by a French lawyer who acted with the power of attorney from the then bankrupt Landsbankinn.
The lawyer does not want to comment on who asked her to dissolve the company or where the money went. According to Spegillinn’s information she was not asked to act on the behalf of the committee in charge of Landsbankinn’s bankruptcy.
So where did the money go?
For years it was only a question of when the two would become one but the circumstances could hardly have been predicted by many.
SPRON, Reykjavik’s Savings & Loan has been taken over by the Financial Authorities and the customers transferred to Kaupthing.
The IceBank central processing unit will be moved to the Central Bank of Iceland. Altogether six Savings & Loans asked for assistance from the state, including BYR where its owners paid themselves extraordinary dividends last year.
The minister of commerce predicts more unemployment to come out of the financial sector as a result.
What kind of a political party would seek and accept a 300.000 ISK donation from the 112 Emergency Phone Service (what would be Rescue 911 in the US)?
The Independent Party. And now they await the verdict on whether this donation is legal or not, as 112 was majority owned by the state at the time.
Donations to political parties have been made public and there are a lot of interesting things to see. The Independent Party receives the most by far and the Progressive Party has its backers amongst the companies owned by those who were given Bunadarbanki at privatization.
A curious donation of 90.000 ISK was made by the Foreign Ministry to the Progressive Party? It is the only instance of a Ministry supporting a political party and questionable to say the least.
We are deeply disturbed by the former Minister of Fisheries and Agriculture’s decision to authorize the hunting of sei whales and minke whales over the next five years, along with a dramatic increase in Iceland’s whaling quota.
From the letter sent from Whole Foods president AC Gallo to Steingrimur J. Sigfusson, Minister of Fisheries.
Now, I am against whaling. The reason is that I think it is done in the interest of few at a great cost for so many others. And this letter is an example of that.
But I like so many others in Iceland would like to get to the bottom of why Americans and Europeans are so particularly against whaling?
Is it because they are endangered species? Or is it because they look cute and cuddly and are supposed to be smart?
Economic Disaster Area 