The global financial crisis has many victims, but over the past 24 hours the name of one small, northern victim has been on many lips, and, no, it's not "Estland"; it's Iceland.In what has become standard practice during the past few weeks, the Icelandic state nationalized two large banks, Landsbanki and Glitnir, while it attempted to rescue a third, Kaupthing.
Kaupthing has also received Swedish support to the tune of $702 million for its arm in Sverige, which is now looking for a local buyer. Perhaps the most interesting twist is the appeal by Reykjavik for a $5.4 billion loan from Russia. While it isn't a done deal, Russian Finance Minister Alexei Kudrin has said Moscow viewed the request "positively."
In Eesti, the banking system is moaning and groaning, but much of that is coming from Stockholm, home to Swedbank and Ühispank parent SEB. It's not hard to imagine anything at this point, but a Swedish bailout to cover Baltic losses could occur sooner than any spokesperson for the banks is willing to concede.
The second option though, of seeking Russian money to keep the country solvent, would be highly controversial in Eesti, where Russia is seen as still having political goals and meddling in domestic politics. But if the Icelanders have to turn to Moscow to keep their economy afloat, to whom could the Estlanders turn in a similar, hypothetical scenario? If not Stockholm and Helsinki, then who?
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Read somewhere that financial sector in Iceland had a leverage of 12 times of the national gross product while US banking sector is only 3% of the GDP. I got an impression that Iceland is so deep under water now that Russians can by their entire country for a bag of sunflower seeds.
Russia is using opportunity plant one's foot firmly on an important point of Europas edge. Keep on the alert!
Seems odd that Iceland would seek capital injection from Russia and not, say China, who have a massive 1.8 trillion US dollars in financial reserves and would presumably have less political strings attached....
Another question: if Russia was such a deep energy resource base, how come their stock market is tanking?
"If not Stockholm and Helsinki, then who? "
Well, there is the ideas going on at the moment in Estonia, to transform Aegna into an Casino Iceland, sorry Ireland.
Alleged, some German Bank is interested in such an investment.
I am not sure about that. I think the German financial system has enough problems at the moment.
Russia will be very complicated. I am even not sure, if any party is interested in backing up Estonian economy. I think, at the moment, Estonia and Russia are mutually not interested in any deals.
But what about China? That's where the U.S.-market is currently borrowing money from.
Any other markets, that does not have any serious banking crisis?
The Arabs maybe? Well, they even didn't helped the U.S.-market.
What about Turkey? Isn't Turkey the new rising star in whole Europe at the moment?
So, you see, I have no answer.
Does have anybody?
The answer, my friend, is blowing in the wind ...
Someone knows if and when Bob dylan & Band will come to the Baltics?
Anybody has does.
The problem started in the US, or at least that's what the Europeans say.
Namely: too many cheap, ugly houses in the US.
Solution: either let a lot more Mexicans in to increase demand, or burn down some of the houses.
I am thinking that McCain could be elected, then he could taunt Mexico and start a small war. Mexico could be allowed to invade Phoenix and Las Vegas. These are key, oversaturated markets. This would make the housing prices higher and bolster other sectors.
It's classic shock therapy. Anything else will look like a big-government bailout or fiddling while people's savings are wiped out.
We certainly seem to be living in very interesting times... It can't be said that this present crisis would not have been foreseen - there were many very prescient warning voices, but they were totally ignored in this hubristic and blind faith in the wisdom of almost unregulated markets. I think it is too early to draw any firm conclusions yet - no-one seems to have an idea of the extent of the fallout to real economy. I guess we'll eventually see whether this will turn out to be the 1930's or the 1970's. One is hoping for the latter...
Someone knows if and when Bob dylan & Band will come to the Baltics?
Bob Dylan was just here in Estonia a while ago. Nothing like this will never happen again, thanks to Estonian government who decided that 5% VAT (which enabled the concert organizers to manage with only a little losses and in some cases even with a little profit) should be raised to 18%. That means, no more Klaxons, Sigur Ros or Dylan for us.
:-(
Then I have to go to my home town in Germany to see him next time again.
Isn't Peeter Rebane now organising concerts in Riga for next year?
Maybe we hav luck not to fly/dirve that far away, to see some international artists.
So this is it? Looks like Wall Street is kaput. Will Katrina-like mayhem follow now? Should one invest in canned foods and ammo, before it is too late? Move to Canada. Live off the land?
I cannot believe the headlines these days. If it did not say CNN on it, I'd think I am reading some sensationalist alternative press ...
Has the shit hit the fan? Has the other shoe dropped or is this just the beginning?
It's the beginning for the simple reason that there is no trust in any institution, private or public. That is the real crisis; the crisis that says, "I don't believe my bank" or "I don't believe my government." As far as we know, they could all be lying, and they probably are.
That's a pretty dark picture.
I hope there is some more room for direct democracy in all this.
To me, any politician who isn't talking about devolving power and holding more online referenda is saying, "I don't trust my constituents" or "I think my constituents are stupid".
But in fact we have the technology for direct democracy, and although it would be hard to make the transition overnight, the first step is that politicians should be required to poll their constituency and vote the result. Congressmen and rahvasaadikud should ultimately have no more leeway than members of the electoral college.
This completely off-topic, but to go back to Georgia topic, I think it might be interesting for some of you to watch this program. It is mainly in Estonian, but there are some parts in English also.
All said - there are many shades of gray, but I maintain that Georgians are very different from Estonians. We should not support Shakasvili unconditionally like we have.
Watch this:
http://etv.err.ee/arhiiv.php?id=82946
One thing that always struck me about Saakashvili is that he looks like a grown-up version of the
kid in the Boys from Brazil. That should be a warning.
But Georgia seems like Estonia in 1993. If Estonia's Russian population were voting at the time and were Estonian, that is.
Loss of trust in institutions is nothing new.
Just looking at the constantly falling voter turnout at most elections since the 1970's, it has been obvious that people realized that their vote doesn't amount to much, because politicians will do whatever they please no matter what.
Then, successive economic downturns made people realize that they could not trust their boss either; someone who demands loyalty and yet won't hesitate to fire them on a whim cannot be trusted.
Now, the same thing is happening to banks. Not surprisingly, banks going into receivership and people loosing all their savings mostly happens after unsuccessful wars have been fought. We have the same situation now and the frequency of wars is such that we can actually notice the downward curve from one pointless egoistic war to the next.
Yes, this is indeed a series of "I don't trust you anymore" and probably the reason why people are so jaded with this "trust no one: deceive everyone" game. Unless you were born and raised to win this Liar's Poker, it's a game you always lose. People notice that the number of players keep on shrinking, because it really takes one heck of a sociopath to play this game and yet stay alive among the sharks. The very few owning the very many. You'll notice that politicians are the only ones that express surprise at the low level of trust. I wonder why? *grin*
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