I love the writings on the financial stupidity by Michael Lewis in Vanity Fair. One of the earlier ones was regarding Iceland which I tried to summarize in September this year. The article was called Wall Street on the Tundra.
Message 27643411
Ruminating on banks gone awry, Greece, etc reminds me of collective stupidity of Iceland detailed in 2009 by Michael Lewis...Wall Street on the Tundra.
"Iceland’s de facto bankruptcy—its currency (the krona) is kaput, its debt is 850 percent of G.D.P., its people are hoarding food and cash and blowing up their new Range Rovers for the insurance—resulted from a stunning collective madness. What led a tiny fishing nation, population 300,000, to decide, around 2003, to re-invent itself as a global financial power? In Reykjavík, where men are men, and the women seem to have completely given up on them, the author follows the peculiarly Icelandic logic behind the meltdown........"
It went something like this: My dog is worth $1 billion Kroner...your cat is worth $1 billion Kroner. I sell you my dog and you sell me your cat. We are no longer pet owners but are now Icelandic banks each with 1 billion in assets. Fake value with astronomical asset inflation. I remember laughing at this at the time, but it was going on world wide.
Iceland is a really interesting study as it is so small and isolated from the world. One of the earliest implosions and not really linked to any "global miracle".
Link to most interesting book, a compilation of various stories about the Great Worldwide Stupidity (my words)
harpercollins.com
Cheers MoneyPenny |
