Leatherhead Matters

Another day in Gordon Browns “world class” Britain. and another public sector fiasco. We now find that that council have hundreds of millions of our money swilling around in Icelandic banks. Why, why why?

The public sector numpties in councils are supposed to be providing local services not playing the international money markets. It now looks as if councils, police authorities & Transport for London have over £1,000,000,000 on deposit in bust Icelandic banks.

Surrey County Council has £20m tied up (£10m deposited in both Glitnir and Landsbanki, both failed Icelandic banks) for 2 years. Mole Valley Council don’t appear to have owned up yet and conveniently their web site has been down for several hours now! (Update 10 October. MVDC web site is back on line & they have confirmed they have no Icelandic bank deposits. Well done MVDC!)

Today councils from all over England have been pleading with the Government to save them from the wrath of council tax payers. Their defence is that they “were being prudent and getting the best deposit interest rate for local citizens“, and “how  could we possibly know that this was risky when the Icelandic banks all had good ratings?”.

Of course this is absolute twaddle!

Did they not ask how a country of only 300,000 people & a GDP of only $13billion (Gordon Brown sneezed this pittance on Monday) could bankroll billions of international deposit accounts, buy West Ham FC and large chunks of the West End of London?

As early as February 2008 warning signs were being flagged

16 March this year, the Daily Mail wrote:

“The real horrors are in Iceland.
Credit insurance for debts at Iceland’s biggest bank, Landsbanki, is priced at 610 points while that for Kaupthing is priced at a hair-raising 856. Given that these two have taken billions in UK retail deposits, it may be a sobering thought for savers to consider where they are putting their cash. These banks are now seen as the most unsafe in the developed world.
Of course, no one can be sure that disaster looms for anyone, but the figures on credit default swaps show clearly where investment professionals think the big risks are. You have been warned.”

And the credit rating agencies were also formally giving negative ratings to Icelandic banks such as Glitnir (see HERE) from April 2008.

And there were other warnings that Icelandic banks Topped the Riskiness League

Icelandic banks were even outed on the telly:

Councils forgot that their basic purpose was to provide services to local citizens and lemmings all, they got sucked into a global financial bubble.

Fools, Idiots, imbeciles! It was our money they were playing with in the global casino!

If you want to know more about Iceland and the background to their financial problems read THIS interesting article