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Icelandic president:

Icelandic president: "Let banks go bankrupt"

(2:58) Iceland is enjoying a recovery that the rest of Europe could only wish for. Icelandic President Olafur Ragnar Grimsson, speaking at the annual World Economic Forum in Davos, held his country as a model of economic recovery - with an interesting angle, that a strong financial sector could actually be detrimental to an economy, because it sucks the best expertise from where they are really should be, in the technology sector.

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cengland0 cengland0 (1758 days ago)
Where do people keep getting the idea that banks were bailed out? TARP (Troubled Assets Relief Program) authorized the expense of up to $700 billion to banks, that had low reserves due to new requirements created, of which $432 billion was disbursed. This was originally intended to increase bank capital, but banks quickly got their own capital because of the high interest the government charged on that loan, and paid back TARP money. Then TARP morphed into a bailout for AIG, FNMA, FHLMC, Chrysler, and GM – none of which is a bank. In fact, the tax payers made billions in profit in interest from that money loaned to the banks.
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Where do people keep getting the idea that banks were bailed out? TARP (Troubled Assets Relief Program) authorized the expense of up to $700 billion to banks, that had low reserves due to new requirements created, of which $432 billion was disbursed. This was originally intended to increase bank capital, but banks quickly got their own capital because of the high interest the government charged on that loan, and paid back TARP money. Then TARP morphed into a bailout for AIG, FNMA, FHLMC, Chrysler, and GM – none of which is a bank. In fact, the tax payers made billions in profit in interest from that money loaned to the banks.
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Guest: Dafuq (1758 days ago)
I cant speak for the US, but in Europe the banks got that money for free without any interest on it.
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I cant speak for the US, but in Europe the banks got that money for free without any interest on it.
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cengland0 cengland0 (1758 days ago)
Wow, that would be incredible then. Did they at least have to pay it back?
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Wow, that would be incredible then. Did they at least have to pay it back?
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Guest: Beau Guest (1758 days ago)
You are quite simply the dumbest SOB on teh interwebs. And off teh interwebs too. How is it you know so much without understanding any of it?
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You are quite simply the dumbest SOB on teh interwebs. And off teh interwebs too. How is it you know so much without understanding any of it?
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Guest: (1758 days ago)
Maybe... just maybe...people got the idea from the treasury secretary. Just sayin' LINK
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Maybe... just maybe...people got the idea from the treasury secretary. Just sayin' LINK
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cengland0 cengland0 (1758 days ago)
First comment. You have a problem with the banks paying interest based on LIBOR? If you have a credit card with a variable rate, it's probably tied to the Prime rate as published in the Wall Street Journal or the LIBOR rate. Think we should increase all customer's rates if they are on LIBOR to be fair to the banks now? Second. Did you even read the article that you linked to? It confirms my point that the banks were charged interest on the TARP money that they had to pay back. It was not free money for the banks. I will agree that the banks might have saved a little money because LIBOR was picked but that was just a matter of pennies. For example, if I said I'll give you a loan at 50% interest and for some technicality you ended up only paying 49%, that would still be a lot of interest. Third. Regardless of what interest rate was charged, the banks were forced to take the money even if they didn't want it. How would you feel if I told you that you have to borrow money and you have to pay interest on it even if you felt you didn't need the money? That's the situation with the banks. Banks pay their customers interest on their deposits. The amount the banks pay in the deposits is significantly lower than what they had to pay with TARP money so it was a huge loss for the banks and the banks wanted to pay that TARP money back as soon as they could get the required capital from their customers. The TARP program has given the tax payers $22.7 billion in profit from interest alone. So how can you say that's a bank bailout when the tax payers $22.7 billion more money back than they gave out?
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First comment. You have a problem with the banks paying interest based on LIBOR? If you have a credit card with a variable rate, it's probably tied to the Prime rate as published in the Wall Street Journal or the LIBOR rate. Think we should increase all customer's rates if they are on LIBOR to be fair to the banks now? Second. Did you even read the article that you linked to? It confirms my point that the banks were charged interest on the TARP money that they had to pay back. It was not free money for the banks. I will agree that the banks might have saved a little money because LIBOR was picked but that was just a matter of pennies. For example, if I said I'll give you a loan at 50% interest and for some technicality you ended up only paying 49%, that would still be a lot of interest. Third. Regardless of what interest rate was charged, the banks were forced to take the money even if they didn't want it. How would you feel if I told you that you have to borrow money and you have to pay interest on it even if you felt you didn't need the money? That's the situation with the banks. Banks pay their customers interest on their deposits. The amount the banks pay in the deposits is significantly lower than what they had to pay with TARP money so it was a huge loss for the banks and the banks wanted to pay that TARP money back as soon as they could get the required capital from their customers. The TARP program has given the tax payers $22.7 billion in profit from interest alone. So how can you say that's a bank bailout when the tax payers $22.7 billion more money back than they gave out?
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Guest: (1758 days ago)
My problem with the 'bailouts' was simply this: There was another solution that would have had a similar result AND would have protected the little guy. Simply this: The government should have financed from the bottom up, not from the top down. How? Put a two-year moratorium on house foreclosures and organize a government loan program to those affected. a) Must be your primary residence---no speculative investments b) The loan (similar to student loans) is 'unforgivable' even in bankruptcy (it must be paid back). Results... stability in the housing market, people get to keep their homes. stability in the derivatives market, stability in the investment banks. The way it was done...sure it stabilized the banks, but the derivatives market has yet to stabilize fully, the housing market has yet to recover fully, and thousands (hundreds of thousands? ) have lost their homes. All the while banks took TARP money to pay bonuses (I understand the need to pay the bonus to keep good talent, but you must admit, the spin is not pretty to the guy that just lost his home).
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My problem with the 'bailouts' was simply this: There was another solution that would have had a similar result AND would have protected the little guy. Simply this: The government should have financed from the bottom up, not from the top down. How? Put a two-year moratorium on house foreclosures and organize a government loan program to those affected. a) Must be your primary residence---no speculative investments b) The loan (similar to student loans) is 'unforgivable' even in bankruptcy (it must be paid back). Results... stability in the housing market, people get to keep their homes. stability in the derivatives market, stability in the investment banks. The way it was done...sure it stabilized the banks, but the derivatives market has yet to stabilize fully, the housing market has yet to recover fully, and thousands (hundreds of thousands? ) have lost their homes. All the while banks took TARP money to pay bonuses (I understand the need to pay the bonus to keep good talent, but you must admit, the spin is not pretty to the guy that just lost his home).
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cengland0 cengland0 (1758 days ago)
You are incorrect about the purpose of the TARP money. None of the TARP money was used to pay bonuses. It was given to raise capital (a.k.a. reserves) so the banks had to keep that money -- not give it out as bonuses. Many banks were still profitable so they didn't need that TARP money but were forced to take it anyway. So why not use some of the profit money to pay executives that assisted in generating profit? Regarding foreclosures, that's a problem with the customers not the banks. The reason the houses get foreclosed on is that the person who borrowed money from the bank failed to pay it back. Why should the bank absorb that loss without being able to sell the house to get their money back? Besides, banks have lost billions due to devalued houses during these foreclosures. A customer borrows 250,000, pays back 2,000, the house is then worth $150,000 and the borrower cannot sell their house for as much as they have in it. The bank is still owed $248K but if they sell the house they will end up with only $150K less the costs to sell it. Why would you feel sorry for the person that didn't hold up their end of the bargain? The HAMP (Home Affordable Modification Program) program was designed to help people keep their homes. If they are foreclosed on now, the customer really screwed up. LINK
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You are incorrect about the purpose of the TARP money. None of the TARP money was used to pay bonuses. It was given to raise capital (a.k.a. reserves) so the banks had to keep that money -- not give it out as bonuses. Many banks were still profitable so they didn't need that TARP money but were forced to take it anyway. So why not use some of the profit money to pay executives that assisted in generating profit? Regarding foreclosures, that's a problem with the customers not the banks. The reason the houses get foreclosed on is that the person who borrowed money from the bank failed to pay it back. Why should the bank absorb that loss without being able to sell the house to get their money back? Besides, banks have lost billions due to devalued houses during these foreclosures. A customer borrows 250,000, pays back 2,000, the house is then worth $150,000 and the borrower cannot sell their house for as much as they have in it. The bank is still owed $248K but if they sell the house they will end up with only $150K less the costs to sell it. Why would you feel sorry for the person that didn't hold up their end of the bargain? The HAMP (Home Affordable Modification Program) program was designed to help people keep their homes. If they are foreclosed on now, the customer really screwed up. LINK
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Guest: (1758 days ago)
Re tarp money bonuses: LINK
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Re tarp money bonuses: LINK
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cengland0 cengland0 (1758 days ago)
Nowhere in that article did it stated that TARP money was used to pay bonuses. It just stated that several companies paid bonuses to companies that received TARP money. I assure you that any banks that received TARP money, that money was stored as reserve capital and not used to make any payments to employees. Separate money was used to pay employee bonuses. I work for a bank, our bank received TARP money, our bank made billions in profit, our bank payed back the TARP money, and I received a bonus every year in my career with this bank for a job well done. Why shouldn't I get my bonus if I accomplished all the goals I was given and exceeded most of them? That's what the bonuses are for. The TARP money, in my opinion, was a panic move by the government and not necessary in many cases. Because we were forced to take it, you feel our executives are not due a bonus even though we made huge profits? In the article you linked, the other companies were quoted as being "ill advised" to give bonuses. However, it might have been contractual and the company legally obligated to give them. You may not believe it but when a CEO is hired, they are given salary conditions that pretty much guarantees them money otherwise the CEO wouldn't leave their current position to come work for you. It's all in the company's annual report so it's no secret. Read the reports of any major company and see for yourself. I remember a company I worked for that hired a CEO, fired them 6 months later, and still had to pay out the rest of his contract. They were legally obligated.
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Nowhere in that article did it stated that TARP money was used to pay bonuses. It just stated that several companies paid bonuses to companies that received TARP money. I assure you that any banks that received TARP money, that money was stored as reserve capital and not used to make any payments to employees. Separate money was used to pay employee bonuses. I work for a bank, our bank received TARP money, our bank made billions in profit, our bank payed back the TARP money, and I received a bonus every year in my career with this bank for a job well done. Why shouldn't I get my bonus if I accomplished all the goals I was given and exceeded most of them? That's what the bonuses are for. The TARP money, in my opinion, was a panic move by the government and not necessary in many cases. Because we were forced to take it, you feel our executives are not due a bonus even though we made huge profits? In the article you linked, the other companies were quoted as being "ill advised" to give bonuses. However, it might have been contractual and the company legally obligated to give them. You may not believe it but when a CEO is hired, they are given salary conditions that pretty much guarantees them money otherwise the CEO wouldn't leave their current position to come work for you. It's all in the company's annual report so it's no secret. Read the reports of any major company and see for yourself. I remember a company I worked for that hired a CEO, fired them 6 months later, and still had to pay out the rest of his contract. They were legally obligated.
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Guest: Iseethroughthefog (1758 days ago)
So this is how history is created...you really think that everybody is as dumb as the teabaggers? Lets read your new explanation of bailout.
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So this is how history is created...you really think that everybody is as dumb as the teabaggers? Lets read your new explanation of bailout.
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cengland0 cengland0 (1758 days ago)
My explanation including the dollar amounts was in the paragraph that you replied to. What part of that was unclear to you?
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My explanation including the dollar amounts was in the paragraph that you replied to. What part of that was unclear to you?
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Guest: GerardB (1486 days ago)
Credit union registration is becoming the “in” thing lately, as the previous two years were filled with individuals ditching big banks for community based ones. They aren't exactly running in droves, but a steady stream is pouring out of the banking industrial complex into credit unions. Resource for this article: <a href="https://person almoneynetwork.com/" >why now don't appear find people presently with this blog?</a>
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Credit union registration is becoming the “in” thing lately, as the previous two years were filled with individuals ditching big banks for community based ones. They aren't exactly running in droves, but a steady stream is pouring out of the banking industrial complex into credit unions. Resource for this article: <a href="https://person almoneynetwork.com/" >why now don't appear find people presently with this blog?</a>
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cengland0 cengland0 (1486 days ago)
I work for a bank but still do business at a local credit union. I spread out my financial services amongst several institutions to avoid putting all my "eggs in one basket." I have money in both banks and credit unions. Today, credit unions are considered non-profit organizations to avoid having to pay taxes so they can offer loans at lower rates and offer deposit interest at higher rates than banks can. Some politicians are trying to reclassify credit unions so they are no longer considered non-profit organizations. If it ever happens, you will probably see credit union offerings being very similar to banks.
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I work for a bank but still do business at a local credit union. I spread out my financial services amongst several institutions to avoid putting all my "eggs in one basket." I have money in both banks and credit unions. Today, credit unions are considered non-profit organizations to avoid having to pay taxes so they can offer loans at lower rates and offer deposit interest at higher rates than banks can. Some politicians are trying to reclassify credit unions so they are no longer considered non-profit organizations. If it ever happens, you will probably see credit union offerings being very similar to banks.
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Guest: Luanaros (1758 days ago)
Well this is pretty funny statement considering Iceland owes Britain billions in money we provide them every year for some reason I do no understand .
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Well this is pretty funny statement considering Iceland owes Britain billions in money we provide them every year for some reason I do no understand .
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Guest: (1758 days ago)
Yeah exactly! Iceland people enjoyed the fruits of their financial economy from foreign investment, then voted not to pay ordinary people back when they ****** up!
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Yeah exactly! Iceland people enjoyed the fruits of their financial economy from foreign investment, then voted not to pay ordinary people back when they ****** up!
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Guest: (1758 days ago)
if they had decided to replay those debts, each tax payer in iceland would have had a personal debt of £100,000. Would you have been ok with that? I wouldn't. and it seemed to have worked, while george osborne has us in a triple dip recession, they are well on the way to recovery.
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if they had decided to replay those debts, each tax payer in iceland would have had a personal debt of £100,000. Would you have been ok with that? I wouldn't. and it seemed to have worked, while george osborne has us in a triple dip recession, they are well on the way to recovery.
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Guest: Money Honey (1758 days ago)
Not exactly true.. we just happened to use them as a clearing house for cheap loans, so when the shit hit the fan, the UK got caught.. sounds like they're learning from their mistakes by employing a little bit more financial acumen and caution
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Not exactly true.. we just happened to use them as a clearing house for cheap loans, so when the shit hit the fan, the UK got caught.. sounds like they're learning from their mistakes by employing a little bit more financial acumen and caution
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Guest: GGGGGman (1758 days ago)
The Irish banks were bailed out twice I do believe. And the austerity measures affect the tax payer more than anyone else. Also drives me mental that Greece's austerity measures were reduced as they just wouldn't meet them where as Ireland is still being screwed! (rant over) Let's move to Iceland!
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The Irish banks were bailed out twice I do believe. And the austerity measures affect the tax payer more than anyone else. Also drives me mental that Greece's austerity measures were reduced as they just wouldn't meet them where as Ireland is still being screwed! (rant over) Let's move to Iceland!
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Guest: (1383 days ago)
Latest comment:

You can view it on yt LINK

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Latest comment:

You can view it on yt LINK

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