Wednesday, October 8, 2008

You know things are bad...

... when instead of people in Iceland asking you about the situation in Lebanon, it's your family in Lebanon asking about the situation in Iceland.

So yeah, Iceland is in deep trouble. The banks had grown so much in the last few years, borrowing money left and right, expanding into foreign markets, and whatnot. And with the credit crunch... It all fell to pieces. The main 3 banks in the country are pretty much failing, and the state is taking over. However the liabilities of the banks amount to 9 times the country's GDP (!!) so that's not reassuring at all.

Everybody knows that the party's over in Iceland, and that hard times are coming. But no one knows how bad things will be, yet.

The ISK (Icelandic Króna) was trading at 60-something to the dollar a year ago. It reached 120/$ the other day. The government has tried pegging the currency but it has failed to do so... Today's displayed rates have varied between 90 and 140, and apparently real market rates have been much worse. So... hello inflation!

Otherwise, not much is new, except that the weather has been getting colder. But there's still light on my way to and from work, so the onset of SAD will not happen for another couple of weeks...

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