Re: [Pen-l] Iceland

[Doug Henwood <dhenwood@xxxxxxxxx>]

On Dec 27, 2008, at 1:14 AM, michael perelman wrote:

> I'm trying to understand today's story in the Wall Street Journal  
> about Iceland.  The article says that the banks were offering more  
> than 7% interest on deposits and the Icelanders were borrowing money  
> cheaply from places like Japan.  To whom were the banks lending at  
> rates substantially more than 7%? Or were they just using the funds  
> to speculate on a domestic bubble?

Richard Portes

<http://www.leftbusinessobserver.com/Radio.html#081023>

told me that the Icelandic banks weren't doing anything aggressive  
with their funds, and that the image of the country as a giant hedge  
fund was a slur. An Icelander who listens to the show emailed me to  
say that Portes was close to the banks and not inclined to be  
critical. Unfortunately, the Icelandic MP I had on the week before

<http://www.leftbusinessobserver.com/Radio.html#081016>,

a union leader and chair of the Green delegation, couldn't say much  
more about the origin of the situation than that the capitalists  
caused it.

Doug
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