Wednesday, October 8, 2008

Russia to bail out Iceland

Russia's stock market is closed until further notice after being down over 80%. Now Iceland's central bank is looking for $5+ billion from Russia, to give liquidity to their banking system.

Iceland's second largest bank, Landsbanki was declared insolvent, and Glitnir, the third largest bank was transferred to financial recievership. Meanwhile, Britian is suing Landsbanki, because 300,000 UK customers had accounts at IceSave, it's subsidiary.

Looks like the Russians will now drink their Vodka at the ICEHOTEL in Jukkasjarvi!

The Absolute Ice Bar in JukkasjÀrvi probably enjoys more international fame than the trendiest bars in Stockholm. Twice mentioned in Newsweek as one of the most stunning bars in the world, it certainly leaves no-one cold.

That trend will probably last. But the selling of credit default swaps by insurance companies and banks are now, painfully over, as AIG and Iceland are just the tips of these boondoggle. It just shows that the lure of easy money in misunderstood products was systemic and worldwide.

But who peddled these misunderstood, esoteric products with egregious commissions that almost took down the financial system; the repurcussions of which we are acutely feeling with the shattered confidence in equities?

That's right Wall Street, who just got $700 billion!

Who's drinking to that?

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