Iceland Jails Bankers, Erases Citizens’ Debt, Recovers STRONG !!

[kathy88]

I have no clue what you are talking about.

I NEVER have any idea what unc is talking about. Makes me feel dumb.

[Dr.3D]

I have no clue what you are talking about.

And all this time, I thought I was the only one without a clue.

[Philhelm]

Alright, let's come up with a game plan. At what level do we start prosecuting guys? Branch manager? Regional manager? I once had a teller look at me like a terrorist because I withdrew $4,000 at once. I want her to be tried as well.

Don't forget their families too!

[ShaneEnochs]

Totally against the Iceland model.

It will not work out in the end. Forgiving debt only encourages more people to take on more stupid debt. Instead, people who can't pay need to go bankrupt. You aren't entitled to $#@! and have such paid for by others. Very bad model.

Also, why brag about a 2% growth and out growing the Euro area? Socialism is collapsing all around Iceland due to massive debt loads so in essence it's not hard to outgrow the rest of Europe.

Besides, Iceland's GDP is a whopping $15 billion. Apple alone makes more money than that. So there really isn't much to brag about.

I <3 bankruptcy. I just wish it cleared student loans as well.

I have a couple friends who live in Iceland. They were telling me that a Big Mac there costs the equivalent of $12 USD.

[DEGuy]

The Federal Reserve and the elite are the ones who have been getting the free lunch. Not the everyday working folks in America trying to just survive one day at a time. The bankers got a debt reset to the tune of trillions while the people who work for a living did not. Do you understand now why bankers should be arrested and prosecuted for their crimes?

Advice from Office Space: Just fix the "glitch" and stop the paychecks, and once that's done, it'll work itself out naturally.

[jmdrake]

Your local bank did not steal from the homeowner. The homeowner sought them out for a loan and willingly signed a contract. The deal was struck and because of the loan they had received, they chose to buy a house.

Your local bank did not cause the housing boom and bust cycle.

Borrowers should honor their contracts. There is no free lunch, even if people want it REALLY badly.

Actually in some cases the homeowners were sought out. My mother is in real estate. She told me of one real estate broker that talked about how he convinced an elderly lady who was comfortably renting to go in debt to buy a house. He had to prod her into it. Oh sure, she "willingly" signed the contract, the same way someone "willingly" buys crack...at least the first time. But it's not fair to say that all homeowners just forced themselves on the banks. Also the meltdown wasn't caused simply by homeowners. There's the whole derivatives scheme. http://seekingalpha.com/article/1981...nancial-crisis

Edit: And once you understand derivatives (and I admit I only partially understand them) you can see why predatory lending was a necessity for the shell game the international banksters were playing. Derivatives (as I understand them) are "bets" as to whether or not an actual security is valuable. Remember the 9/11 airline "put" options? Same thing here. In order to place a 'bet" on whether or not someone will default on his mortgage, you have to have someone at risk for defaulting on his mortgage.

[jmdrake]

You cannot just put all bankers in one group.

What about John Allison, the libertarian CEO of BB&T now in charge of CATO.

His bank was FORCED by the government to take bailout money. They protested against it. Not all bankers are evil.

I'd be happy with seeing Hank Paulson go to prison. Seriously, how did he get away with engineering a bailout for Goldman Sachs when he had half a billion invested in Goldman Sachs?

[Zippyjuan]

Iceland was also helped by allowing their currency to collapse- that increased demand for their exports and made imports more expensive. They also imposed very strict controls on the flow of capital.
http://www.nytimes.com/2012/07/08/wo...pagewanted=all

But not even Mr. Arnason says he believes that all is perfect. Inflation, which reached nearly 20 percent during the crisis, is still running at 5.4 percent, and even with the government’s relief programs, most of the country’s homeowners remain awash in debt, weighed down by inflation-indexed mortgages in which the principal, disastrously, rises with the inflation rate. Taxes are high. And with the country’s currency, the krona, worth between about 40 and 75 percent of its pre-2008 value, imports are punishingly expensive.

Strict currency controls, imposed during the crisis, mean that Icelandic companies are forbidden to invest abroad. At the same time, foreigners are forbidden to take their money out of the country — a situation that has tied up foreign investments worth, according to various estimates, between $3.4 billion and $8 billion.

“The capital controls are worse and worse for companies, but the fear is that if we lift them, the value of the krona will collapse,” Professor Matthiasson said.

He said the only solution would be for Iceland to dispense with the krona and join a larger, more stable currency. The choices at the moment seem to be the euro, which is having its own difficulties, and the Canadian dollar.

Not everyone buys into the rosy picture presented by officialdom. Jon Danielsson, an Icelander who teaches global finance at the London School of Economics, said that both the I.M.F., which bailed Iceland out during the crisis, and the government had a vested interest in painting a positive picture of the situation.

“When I hear people say that everything is fine, it’s colored by P.R.,” Mr. Danielsson said. “They have clearly stabilized the economy and gotten out of the deep crisis, but they have not yet found a way to build a prosperous country for the future.”

A visit to Iceland late last month revealed a far different place from the shellshocked nation of 2008. Stores and hotels were full. The Harpa, a glass-and-steel concert hall and conference center designed in part by the artist Olafur Eliasson and opened in 2011, soared over the Reykjavik skyline, next to a huge construction site that is to house a luxury waterside hotel. Employers said that instead of having to lay off workers, they were in some cases having trouble finding people to hire.

[Brian4Liberty]

Your local bank did not steal from the homeowner.

Some of them stole from the taxpayers: TARP. Many of them engaged in fraud by giving out ultra-high risk loans and selling the crap off as triple A rated investments. The biggest Wall St firms engaged in wholesale fraud by packing the crap and reselling it as AAA.

As far as forgiveness of mortgages, that is just another bailout, and more theft. Houses that are in default need to be sold. Of course the bankers and the homeowners believe they have a vested interest in restraining the supply of houses on the market so that prices can be artificially raised. In reality, this once again only benefits the largest Wall St banks, who are sucking up all that property behind closed doors in Washington.

[seraphson]

Actually in some cases the homeowners were sought out. My mother is in real estate. She told me of one real estate broker that talked about how he convinced an elderly lady who was comfortably renting to go in debt to buy a house. He had to prod her into it. Oh sure, she "willingly" signed the contract, the same way someone "willingly" buys crack...at least the first time. But it's not fair to say that all homeowners just forced themselves on the banks. Also the meltdown wasn't caused simply by homeowners. There's the whole derivatives scheme. http://seekingalpha.com/article/1981...nancial-crisis

Edit: And once you understand derivatives (and I admit I only partially understand them) you can see why predatory lending was a necessity for the shell game the international banksters were playing. Derivatives (as I understand them) are "bets" as to whether or not an actual security is valuable. Remember the 9/11 airline "put" options? Same thing here. In order to place a 'bet" on whether or not someone will default on his mortgage, you have to have someone at risk for defaulting on his mortgage.

And that right there is one of wicked functions of our debt-based, central bank controlled monetary system. It's actually designed so that no matter what someone will default. Money as Debt explained this pretty well and I thought it was a very enlightening learning experience. Theoretically if given sufficient time the banks would eventually own everything. Of course in reality the system will bust far before that occurs.

[MJU1983]

I'd be happy with seeing Hank Paulson go to prison. Seriously, how did he get away with engineering a bailout for Goldman Sachs when he had half a billion invested in Goldman Sachs?

Tax cheat Tim Geithner (who was President of the NY Fed and Vice-Chairman of the FOMC helping fuel the housing bubble) as US Treasury Secretary hires a former Goldman Sachs lobbyist as his chief of staff to dole out bailout money to......Goldman Sachs.

LOL

You can't make this $#@! up!

[thequietkid10]

This is so stupid and devoid of libtertarian thought

Nobody makes anyone take out a morgage, nobody made the old lady buy a house. No one made anyone buy a house if the fed makes the interest rate 3 percent, 5 percent, 10 percent or 0 percent interest rate. If you dont have the income to pay off a house you shouldnt sign the CONTRACT promising to pay a bank 150,000 over the next 30 years peroid.

[RickyJ]

This is so stupid and devoid of libtertarian thought

Nobody makes anyone take out a morgage, nobody made the old lady buy a house. No one made anyone buy a house if the fed makes the interest rate 3 percent, 5 percent, 10 percent or 0 percent interest rate. If you dont have the income to pay off a house you shouldnt sign the CONTRACT promising to pay a bank 150,000 over the next 30 years peroid.

Nobody makes you or I post here either. However anyone that would turn down a 0, or very low interest rate loan would not be thinking clearly when inflation is about 10 percent a year at bare minimum.

[LibertyEagle]

Of course there is no free lunch, but no one in their right mind is going to turn down super low interest rates even below inflation and 60 year mortgages to buy a house. Nope, smart thinking people will jump on that. The banks knew they would, they knew the situation it would produce, they knew they would never recover their money created out of think air and didn't care, they wanted their land and assets on their balance sheets.

Actually, if they were in their right mind, they would have known that it was a huge bubble getting ready to burst and wouldn't have bought something they couldn't afford to pay for, if and when the bubble burst.

If they did, they CHOSE to sign the contract. No one forced them and they should honor that contract. Local bankers did not create the bubble. They were providing a service that you paid them to provide.

smart thinking people will jump on that

How "smart thinking" were the people whose houses are now under water, eh?

[LibertyEagle]

Some of them stole from the taxpayers: TARP. Many of them engaged in fraud by giving out ultra-high risk loans and selling the crap off as triple A rated investments. The biggest Wall St firms engaged in wholesale fraud by packing the crap and reselling it as AAA.

As far as forgiveness of mortgages, that is just another bailout, and more theft. Houses that are in default need to be sold. Of course the bankers and the homeowners believe they have a vested interest in restraining the supply of houses on the market so that prices can be artificially raised. In reality, this once again only benefits the largest Wall St banks, who are sucking up all that property behind closed doors in Washington.

True, but the vast majority of them did not.

Regardless, giving away houses free of charge is not the way to address this. This is just so wrong.

[thequietkid10]

Nobody makes you or I post here either. However anyone that would turn down a 0, or very low interest rate loan would not be thinking clearly when inflation is about 10 percent a year at bare minimum.

I dont know why you are so fixated on interest rates. What matters is the monthy bill. if the morgage is 1000 per month and you make 1500 per month, you shouldnt have gotten the house. Whether it is a cheaper house with a high ingerest rate or a nicer house with a low interest rate, makes no difference

[RickyJ]

No one forced them and they should honor that contract. Local bankers did not create the bubble. They were providing a service that you paid them to provide.

I disagree. Contracts can be terminated legally in the USA at any time, corporations do it all the time when it suits them, the general public is entitled to do the same. Filing for bankruptcy is not just for corporations. And you are very wrong that bankers did not create the bubble, they were primarily responsible for it with their low interest loans given out to people they knew couldn't pay them back. This created an artificial housing bubble that could only have occurred with their lending practices. They knew exactly what they were doing and what the result would be.

[RickyJ]

How "smart thinking" were the people whose houses are now under water, eh?

The smart ones got out early before the bust, the others just let the banks take it. The bust didn't happen till about 2008, if you bought mid to late 1990s and sold around 2006 or 2007 you did fairly well.

[anaconda]

What did laws did the "bankers" in the U.S. break?

Mortgage fraud up the yin yang. Document forgery up the yin yang.

[Hospitaller]

There is alot of support for government in this thread and i would put forth a vountaryist argument into the mix

[specsaregood]

This is so stupid and devoid of libtertarian thought

Nobody makes anyone take out a morgage, nobody made the old lady buy a house. No one made anyone buy a house if the fed makes the interest rate 3 percent, 5 percent, 10 percent or 0 percent interest rate. If you dont have the income to pay off a house you shouldnt sign the CONTRACT promising to pay a bank 150,000 over the next 30 years peroid.

The problem is you are trying to build a libertarian argument on top of an unstable, non-libertarian foundation. That foundation is the money. The interest rate is important because it is related to how they are constantly devauling the currency through inflation. Taking a long term loan beneath the inflation rate just makes perfect investment sense.