CRASHLAND
What these guys did makes Enron look like a school prank – they took down a whole country.
Pitch-Trailer:
When the Icelandic economy collapsed last October, the country of Iceland went from having one of the world’s highest living standards to being one of its most indebted. The currency lost half its value and the country is now de facto bankrupt.
How did this happen? Inspired by Milton Freedman Icelandic politicians privatized all banks, telecom companies etc. When cash became cheap a handful of risk-seeking guys (the smartest guys in the room, apparently) started borrowing money, buying companies in different countries, inflating stock prices, splitting them up and selling the pieces.
Once they got rich enough they bought the banks and tried to re-invent Iceland as a global financial power. Soon they started lending money to themselves, friends and even politicians, in order to buy stock in the banks in an attempt to raise the stock prices.
When they needed more cash to keep the machine going they bought banks in the UK and Holland and persuaded individuals and organizations to deposit billions in high-interest accounts. When Lehman-Brothers went down the cash flow stopped and it all came tumbling down.
What is beginning to emerge from the rubble are stories of money laundering, corruption, bribes, extortion, private jets, Manhattan penthouse apartments and fake Arab sheiks.
An investigation due to “suspicions of criminal actions” has been launched and famous Norwegian-French investigator, Eva Joly, has been hired.
One of many shocking facts is that almost half of all the loans made by Icelandic banks were to holdings companies, many of which are connected to those same Icelandic banks.
There are suspicions of market manipulation, insider trading, all kinds of breach of trust with shareholders about whether senior executives took loans or invested money for the people they were serving, buying their own shares without having any contract that allowed them to do so and manipulating pension funds.
The economic miracle was a scam – and many say Iceland is just the canary in the coal mine.
This Vanity Fair article captures it well.
