With 83,478 votes counted following Saturday’s referendum in Iceland, 78,092 are votes to reject December’s Icesave law and 1,284 (1.5 percent) have voted to keep the law in force. 2,830 empty ballots were cast in protest.
What’s it all about? Here:
Icelanders overwhelmingly rejected a bill that would saddle each citizen with $16,400 of debt in protest at U.K. and Dutch demands that they cover losses triggered by the failure of a private bank, first results show.
Got that? Brit and Dutch investors put money in to the overheated Icelandic banking system a couple years back and lost everything when the inevitable crash occurred. Naturally, the desire of governments – in Iceland, Britain and Holland – was to get the taxpayers to cover the losses suffered by greedy fools.
Nothing doing, says the people of Iceland, and good for them. Mish offers some advice:
Perhaps the best thing to do is default and suffer the consequences. Even if it is not the best thing to do, that is what 93% of Icelandic voters want to do, so that is what Iceland should do.
Fitch downgraded Iceland’s debt to Junk. Moody’s and the S&P threatened to do so. Note how pathetic Moody’s and the S&P are in threatening (not doing), even after the fact. Does anyone give a rat’s (expletive deleted) about that downgrade now?
Iceland does not need help from the IMF when it will saddle every citizen with $16,400 of debt. Fools in the UK and Netherlands rushed in to Icelandic banks and the fools in the UK and Netherlands are the ones who should suffer the consequences.
It was perfectly obvious Iceland was in an unsustainable situation so the prudent thing to do would be to get the (heck) out of the way.
By defaulting on debt, Iceland will send a much needed message “Don’t do stupid things”.
We, the people of the United States, are on the hook for all $12 trillion in federal debt. We let those idiots in DC do this, and now we’re going to have to pay. What is intolerable is to have the people bail out the banks and investors who screwed up. Bankruptcy is not the worst thing which can happen – and it might teach some worthwhile lessons about those who want to make a killing rather than set up long term, prudent investments.
I congratulate the people of Iceland on the clear eyed courage.
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