Thursday, October 16, 2008

What? WHAT?!?!?!

What the fuck is going on with the Icelandic banking thingummy? Having only gotten my "facts" from the three-monkeys BBC until now, I was utterly horrified to read this piece by Daniel Hannan:

Gordon Brown claims that the expropriation was necessary because Iceland planned to default on British Icesave accounts. How he got this impression is a mystery. Iceland's finance minister made clear in meetings with the British authorities that depositors would be paid. The Prime Minister, Geir Haarde, said in public: “We will immediately review the matter together to find a mutually satisfactory solution. We are determined to make sure that the current financial crisis does not overshadow the important and longstanding friendship that we have with the UK.”

OK. So the Gorgon fucked up, even though there was ostensibly no reason to do so. Hm. But here's the bit that doesn't make sense and certainly didn't come out of the BBC's reportage:

Brown's response? To seize the UK assets, not of the bank that ran Icesave, but of a wholly unrelated bank, Kaupthing, thereby collapsing it.

Huh? Erm, what? No matter how I fucking look at that statement, it just doesn't make any sense. Everybody had their money in Icesave, run by Landsbanki. I had assumed that Kaupthing were a) in the shit and b) somehow related to this. But according to Hannan, they weren't.

And as big a cunt as I think the Gorgon is, I can't seem him destroying the last standing bank in a friendly country just to make himself look tough. And this is where it gets really weird. Ian Parker-Joseph, head of the Libertarian Party of the UK, has the threads of an astonishing theory:

Follow the money my mind keeps telling me, follow the money. Where does government money flow. It flows not only to Local Authorities, but to NGO's, to Quangos, and to the thousands of shady 'Charities' and 'Registered Companies' that NuLab have pumped taxpayers funds into.

And why has Brown gone for Nationalisation of Banks rather than just pumping in liquidity as the experts have advised?

Then on Wednesday of last week a single act added luminescence to that dust ball. The use of Terror legislation to seize the assets of foreign banks.

The questions have been asked, why? The press has been speculative, the government dismissive, the opposition parties silent.

I was quite astonished at how we went from having a private banking system to one which is largely state-controlled in the space of less than a year.

It was that single event that triggered a thought, that misuse of terror legislation that made me ask why? When terror legislation is used, the government can claim that it was invoked in the national interest, it can suggest that for 'security' reasons, we must never know the real truth.

What was the urgency within the Cabinet Office and the Treasury that an 8 man delegation needed to visit Iceland to put the strong arm on the Icelandic government.

What is the truth here? Well we dont know, but we will ask the question:

Is it possible that government or corrupt officials have been running for the past 10 years a massive money laundering scam with taxpayers funds through NGO's, Quango's, Local Authorities, Charities and 'Registered Companies', a scam so big that the financial crisis was going to scupper and expose it, that the beneficiaries were going to lose the money or even worse get found out, or was it that receivers and auditors would be able to unravel it, and that only Nationalisation and the use of terror legislation could keep it under wraps.

The mind boggles. If this is true, it explains why the UK taxpayer has been getting reamed harder and harder with less and less to show for it. If the government was in on this, it would explain why MPs have been given such a sweet deal with salaries, expenses and the John Lewis list, not to rock the boat. How the fuckety fuck could Bliar & co afford all these fucking posh houses they were buying up?

It's hard to imagine that even Tony Bliar and Gorgon Brownshirt could go along with such blatantly criminal behaviour, but I must admit that when I read these two posts in full, some stuff felt like it was clicking into place.

I don't mind admitting that my mind is boggling. Please go read the linked posts in full and make your own mind up.

I've taken the unprecedented step of cross-posting this on DK and my own blog because I'm hoping that someone, somewhere will show me where this theory is wrong.


Nick said...

Bear in mind that IPJ is also apparently a 7/7 truther.

Guthrum said...

The 'independent' Audit Commission have also lost £10m, so can expect no untainted investigation from them.

As all the major parties are involved, if there is any justice they will be a judicial review.

By the way Nick, nice smear, and the relevence is ? £1Bn of our money has gone walk about, Brown panicked and used anti terrorism legistlation to seize assets of a foreign bank, and that is the best you can do. FFS

Anonymous said...

How large has the charidy sector got since it became funded by the taxpayer?(Via giftaid) And those charidies in receipt of Government money tend to start doing the Government's bidding on pushing certain agendas. Hell the Government even pays the likes of Greenpeace to lobby the Government.

Then you have the Quangos. Huge amounts of money are shovelled through their accounts now, and they employ a much larger number of people than before. Brown was very much sold a dummy in both keeping gold-plated pension provisions and being told that to get the best people you had to pay over and above private sector wages at a management level. This was done, but it was the same idiots as before who simply reapplied for their jobs! And if they ever do get sacked it's like a game of musical chairs but they add them instead of taking them away.

I readily subscribe to the idea that the taxpayer taps were turned on full blast without any oversight on how it was spent beyond it having to be spent (or you get less next year), and a great many people have made hay while the sun shines. This would include regional development agencies like wot David Abrahams was involved with.

'Why was Kaupthing shut down?' is a very simple question that deserves a rapid and clear answer. Much wiffle will be forthcoming instead.

Why nationalise the banks instead of just throw taxpayer money at them? Control. Can't nationalise any manufacturing. Can't nationalise the utilities. Can nationalise the companies that lend them money. It plays well to the socialists he now needs for support.

I'd be surprised if Brown has some nefarious plan. He's never struck me as a clever man. He is a swot who has got far above his station and is making it up as he goes along.(See: bank dividend cock-up)

John B said...

Daniel Hamman seriously has a chance of being in government in a couple of years? Given the complete ignorance and factual inadequacy of his piece, that's slightly scary.

First of all, it isn't anti-terrorism legislation. It's the "Anti-terrorism, Crime and Security Act 2001" - saying it's 'anti-terrorism legislation' would be like every measure in the London Olympic Games and Paralympic Games Act 2006 is 'disabled legislation'.

Secondly, Kaupthing's UK assets were never nationalised:

A letter sent from the Prime Minister's office to Iceland's authorities this weekend made it clear Britain had only seized assets belonging to the UK subsidiary of collapsed Icelandic Bank Landsbanki

"To clarify the situation regarding Icelandic companies, I am confirming it is only Landsbanki's assets that have been frozen in the UK... No other Icelandic company's assets have been frozen."

Thirdly, the Icelandic authorities only ever stated that domestic deposits in Landsbanki were guaranteed. I've not seen a quote that they explicitly refused to cover foreign deposits, but I've certainly not seen one that they did.

Fourthly, it is true that the UK government's freezing of Landsbanki's assets was one of the many factors that destroyed confidence in the Icelandic economy, and hence contributed to the demise of Kaupthing - but looking at Kaupthing's balance sheet, it was never going to survive no matter what the UK government did (remember, Iceland only had three banks, and two of them were bust already).

Finally, the relevance of someone being a 7/7 Troofer is pretty fucking obvious: if they believe patent bollocks against all factual evidence, then you can safely ignore their other gibbering rantings...

John B said...

'Why was Kaupthing shut down?' is a very simple question that deserves a rapid and clear answer.

Cos it was bust. This has been another exciting episode of "rapid and clear answers to very simple questions".

Old Holborn said...

I'm with John on this one. "something" had to be done so something was done.

Yes, it was crap but Kaupthing UK was going down the pan. A letter from their CEO appeared on Guidos site telling the staff to pack up their shite, they were skint.

Harry J said...

Finally, the relevance of someone being a 7/7 Troofer is pretty fucking obvious: if they believe patent bollocks against all factual evidence, then you can safely ignore their other gibbering rantings...

What 'patent bollocks' is that? How much investigation into the various anomalies surrounding 7/7 have you done? When we get to see actual moving CCTV pictures (they weren't working, a similar story to the one we got for 9/11 and Diana's 'crash'), of the 'bombers' rather than one questionable still from a camera in Luton I may begin to believe the government's version of events. I also can't help noticing how very convenient and statistically unlikely that on both 9/11 and 7/7 the authorities were involved in 'training exercises' based on the very same scenarios that took place.

That said I suspect the author of the story is barking up the wrong tree. Remember Brown and his 'New World Order' puppet masters are trying to manipulate us into a 'One World Government' with a global financial system. The Iceland thing is setting the stage for the inevitable global solution to (or at least a major step towards it) the 'global banking crisis'.

IanPJ said...


If you believe that asking questions makes someone a conspiracy nut, then the label quite obviously applies to every MP and Journalist.

Grow up.

Guthrum said...

against all factual evidence

And of course nobody ever conceals or changes evidence, when an innocent man gets his head blown off.

By the way I am a believer in the cock up theary of History, rather than a conspiracy theorist. I am sadly old enough to remember people pooh poohing Watergate as an insane conspiracy theory- but guess what.

Keep an open mind at all times, be sceptical, and never believe anything anybody tells you who is in Authority.

This mess is largely I think the result of laziness and ineptitude of public servants, who were allowed to believe they were financially geniuses by the deregulation of LA investments in 2004 by speculating with out money. Clearly Brown panicked when virtually every public body seemed to have lost huge amounts of our cash.

Anonymous said...

So what do we know / suspect / need to know:

1) Many local autorities have made deposits with Icelandic banks, sometimes (how often not yet known but confirmed in respect of Kent CC) on the advice of a Capita subsidiary. Need to know how many deposits were made on Capita advice and what did Capital collect in fees from depositors and (potentially) commisions from the banks.

2) In order maintain high levels of spending while keeping Council Tax rises within political limits Local Authorities have been allowed to set up PFI like schemes to spread payments over future years and keep the liability off the books. How much, if any, of this was financed by Icelandic banks?

3) The FSA allowed IceSave to raise deposits from the UK retail market at 6.5% interest when it was unable to raise wholesale funds at 15% from banks that understood the situation (see todays FT). This sounds like a major failure to look after depositors interests, one of the FSA's primary functions.

4) We have a range of UK politicians (Mandleson, Blair, etc) who have made property investments that have required funding at substantially higher levels that could reasonably be raised based on their publically declared incomes. Did any of the funding for these purchases come from Icelandic Banks and if so were the terms the sort of commercial level available to the general public?

5) Are there any other soft loans or commisions paid by Icelandic Banks to think tanks, charities or other organisations that can do work on behalf of or in the general interest of the Labour party but which if funded directly by the govenrment would be consider to be political and / or illegal?

Clearly by acting tough Brown has reduce the scope for accusing the government of not acting in depositors interests despite the abject failure of the FSA.

If any of 1, 2, 4 or 5 are found to be true there will be at least a scandal and possibly criminal charges that would mean that the government would want to minimise the risk of any open independent examination of the books of the Icelandic Banks. If the Anti Terrorism, Crime and Security Act 2001 can be abused to restrict such examination then I fully expect this shame free government to use it.

However most of this is speculation, and a lot of hard digging will be required to establish whether there is sufficient evidence to consider it a reasonable theory.

Anonymous said...

I love a conspiracy theory as much as the next man but you really are spinning off into the realms of fantasy with this one

John B said...

@ RobertD:

1) very very unlikely Capita made anything from the banks, as that would be jail time if so (= not worth it for a company with fingers in so many profitable PFI pies...)

2) KSF did some PFI work but not very much, and sold the relevant business at the beginning of this year. Landsbanki never had the same UK investment banking focus that KSF did

3) Can't find the relevant FT article, but wholesale funds are supposed to cost a bank more than retail funds, surely?

4) Very unlikely - none of the Icelandic banks offered UK consumer/mortgage finance (also, have you paid a lawyer recently? The idea that a family with two successful lawyers and 25 years on the property ladder wouldn't be afford a few buy-to-lets is frankly bizarre...)

5) This is the only option listed which is even within the realms of the possible - but I'd still be surprised if it were the case, and frankly amazed if that had any bearing on the PM's decision.

In any case, surely if the Icelandic banks were involved in a Gigantic! Corrupt! ZaNu Liebour! stealing scheme, the conspirators would have bailed them out - rather than pulling the plug on their co-conspirators and giving them an incentive to talk?

Old Holborn said...

Anonymous said...

According to ING the UK government handed them the assets of Kaupthing Edge and Heritable Bank after they had grabbed them.. ING seem pleased on their website.
I think johnB has some catching up to do.
This has nothing to do with HankiPankiBanki (Littlejohn)

Anonymous said...

Then you have the Quangos. Huge amounts of money are shovelled through their accounts now, and they employ a much larger number of people than before.

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pagar said...

Let's be fair.

After the Icesave collapse the Icelandic Prime Minister was sending a clear message that Iceland did not have the resources to repay UK savers. If he could have got away with it, he would not have done so. Following Brown's action in seizing assets it would seem that these are now guaranteed. It's a big bad world out there and Brown's swift intervention has protected the interests of UK citizens. In such circumstances, that is what he is supposed to do.

Let's be fair.

Anonymous said...

Financial, but otherwise O/T: did anyone hear the Today item on pensions at about 08:20? It made my blood boil. ******* unbelievable if you weren't aware of it.

I recorded the relevant bit as an MP3 and each time listened to it I became angrier. This should be a Government-toppling scandal. Try the following:

John Humphrys:
“...people are going to pay more into the public sector pension pot even if they are in the private sector, through their taxes, than they pay into their own pot.”

Dr. Ros Altman:
“Public sector pensions increasingly and starkly generous relative to what everyone else has...completely and utterly legally safe in away that everyone else’s pensions are not. “

“Huge liability, which we cannot get out of...there is no money building up to pay for it.”

“Levels of pay in the public sector have soarded beyond the pay levels private sector for equivalent jobs”

Bishop Brennan said...

Whilst I wouldn't put anything past Brown (who is even less likely than Blair to tell the truth, e.g. "I only ever said 'an end to Tory boom and bust'"), I think this is more cock-up than conspiracy...

The truth is that, under Gordon the Great, the Treasury has been emasculated: anyone who dared suggest that there might be an alternative to Gordon's / Ed's / Ed's proposals was, ahem, not so politely told to go forth and multiply, whilst yes men (and women, for PC purposes... although they were mostly men...) advanced. A lot of good people, frustrated, left (might be worth an FOI request on staff turnover, average staff experience at diferent grades, etc...).

Unfortunately, the Nu-Labour cronies that succeeded in Brown's Treasury shared Nu-Labour's inability to understand how markets actually work, or the need to properly regulate banks. Rather, those who were in charge of banking policy were experts in schmoozing the City (and being ripped off under PFI deals).

So, it's conspiracy as far as Brown is concerned - conspiracy to fuck up the part of Gov't charged with protecting the taxpayer (not that it's always been great at that, of course); but incompetence in the case of Treasury officials.

George ought to be planning to, ahem, seek new blood when he becomes Chancellor.

John B said...

"According to ING the UK government handed them the assets of Kaupthing Edge and Heritable Bank after they had grabbed them.. ING seem pleased on their website... I think johnB has some catching up to do."

a) Heritable Bank is Landesbanki.

b) Kaupthing Edge's retail liabilities were transferred to ING under the Banking (Special Provisions) Act 2008 - i.e. the 'not having runs on bust banks' act - *after* KSF went into administration.

c) Only Landsbanki's assets were ever frozen

d) If you're a bank, money that you owe people isn't an asset...

Unknown said...

There's a simpler reason for Brown's actions, which I will get to in a moment. But first some facts and a little background. Bear with me.

Like all EEA members (and Switzerland also), Iceland is signed up to the EU directive 94/19/EC - a minimum deposit guarantee for savers of EUR 20,887 (£16,300) for each account holder, foreign or not. Note the word minimum. Darling (current) and Brown (previous) Chancellor of the Exchequer of course know this.

Darling lied about being told different by the Iceland government when cornered in a BBC radio interview, and the subsequent actions of Brown were based on this lie - that Iceland's government had said it would not honor its obligations.

In fact the Icelandic government has always maintained they would pay. Further, Landsbanki was not transferring any assets away from the UK, in fact the opposite.

You may wonder therefore why Brown decided to escalate based on such an obvious lie. A lie that led to the freezing of assets of Landsbanki, and the seizing of Kaupthing Singer & Friedlander by the UK's FSA, ironically at almost the same hour that Kaupthing's management was awaiting incoming wires that would have without a shadow of a doubt demonstrated its solvency.

Well, as well as the obvious "Falklands moment" his actions serve a further purpose. That purpose is to crush the credibility of the Scottish Nationalist Party (SNP) in time for the Scottish Glenrothes by-election, and beyond. Brown is MP for next-door Kirkcaldy & Cowdenbeath, and the SNP now hold a minority government in the Scottish Parliament. This has been a huge thorn in Brown's side for over a year.

One of the SNP's planks for Scottish independence is joining the "arc of prosperity", of which Iceland is a large part. Brown (as he did* in The Times) can now attack Salmond with vigor after having conveniently demolished Iceland's economy.

Brown took a lie by Darling and opportunistically turned it into British government policy in order to gain political capital against the Scottish Labour party's enemies in Scotland. Depositors in Landsbanki Guernsey and Kaupthing's Isle of Man subsidiary and all the others hurt by this are just acceptable collateral damage to Brown. Q.E.D.

* "Gordon Brown says bailout was not possible without Union" by Angus Macleod, Scottish Political Editor, in The Times, 15th Oct 2008:

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