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Icelandic billionaire, his glamorous wife and friends drown their sorrows
This was Icelandic billionaire Jon Asgeir Johannesson, dressed casually in black, legs outstretched, and his merry court at 1am yesterday, holed up in a chic hotel in the capital Reykjavik.
His failed bank Glitnir, of which he is the majority shareholder, owes millions of pounds to British investors, including companies, town halls, police authorities and charities.
But while Reykjavik burns and its assets freeze, The Mail on Sunday found Mr Johannesson still doing nicely – evidenced by the £85 bottles of white wine on his table.
The 41-year-old, who was found guilty of false accounting last year, drives a Bentley and lives in a three-storey Reykjavik mansion that boasts a bullet-proof room in case of attack. Some people half joke that he may yet need it.
He is one half of Iceland’s most glamorous couple: his 47-year-old wife is Ingibjorg Palmadottir, who owns a yacht which she moors in the Caribbean and drives a customized white Mercedes known in Reykjavik as the White Pearl.
They hosted an impromptu get-together for friends at Hotel 101 on Friday night as their island nation effectively went bankrupt, owing Britain £20billion and others £15billion.
That is £116,000 for every one of its 320,000 inhabitants.
‘It is like being in Hell and watching all the little devils enjoying the last days of normal life in Iceland,’ said an elderly diner.
Earlier on Friday, British tycoon Sir Philip Green, who owns Topshop, held talks with Mr Johannesson, his friend and former business partner, at the hotel.
Although Mr Johannesson refused to confirm that Sir Philip was buying a stake in his retail empire Baugur, the news channel he owns, TV2, said a deal would go ahead.
Baugur is the last private company standing amid the wreckage of Iceland’s economy but is struggling to stay afloat.
After the talks, floppy-haired Mr Johannesson, who looks more rock star than businessman, said: ‘We are looking at the state of business between Iceland and Britain and trying to calm the atmosphere that has become very hostile, as can be seen on the front covers of British newspapers.’ This was Icelandic billionaire Jon Asgeir Johannesson, dressed casually in black, legs outstretched, and his merry court at 1am yester... more -
Council salaries hit by bank collapses
Hundreds of thousands of council workers may not be paid this month because their earnings are frozen by the Icelandic bank collapse, it emerged last night.
The Local Government Association has just eight days to avert a catastrophe, senior sources warned. The LGA has urged the Treasury not to insist on prompt payment of nearly £1bn in business taxes owed by councils, and due on 20 October, to free up cash and allow staff to be paid.
It is understood that dozens of the 100-plus local councils that are victims of the Iceland banking crisis use their accounts for the payroll of everyone from the chief executive to frontline staff. Until now it was thought only capital savings, worth £840m, were locked in the failed banks. But the accounts were also used as a quick way to earn interest to pay wages.
And in a fresh blow to the banking industry, The Independent on Sunday has learnt that seven councils are to withdraw a total of £2bn from British and foreign banks because they fear the crisis could claim more victims. The money will be transferred to government bonds, leaving a gaping hole in UK banking assets at a time when the Treasury is struggling to prop them up with its £500bn bailout. Hundreds of thousands of council workers may not be paid this month because their earnings are frozen by the Icelandic bank collapse, ... more -
Cancer hospitals, universities - even cats - put their faith and cash in Iceland
Hospitals and universities yesterday became the latest victims of the collapsed Icelandic banks as the huge scale of taxpayers’ investments began to emerge.
At least ten universities have together invested tens of millions of pounds, and the Christie Hospital, the specialist cancer hospital in Manchester, was one of two foundation trusts that have admitted making deposits of £2 million, The Times has learnt.
The other, the Central and North West London, is one of the largest mental-health trusts in the country, serving eight London boroughs.
Chelsea Building Society also disclosed a £55 million exposure to Kaupthing and Landesbanki, the two Icelandic banks that failed this week.
Charity organizations revealed that more than £125 million had been deposited in the banks before an emergency meeting with Paul Myners, the City Minister, where they demanded protection for their assets.
Cats Protection emerged yesterday as the latest and biggest charity victim of the Icelandic banking crisis so far, with £11.2 million of its donations now at risk.
Earlier, senior officials from the Treasury, the Bank of England and the Financial Services Authority flew to Reykjavik for urgent talks with Icelandic authorities to try to sort out the crisis involving £1.2 billion of taxpayers’ money and 300,000 personal investors. But after the meeting with charities at the Treasury in London, ministers still refused to guarantee protection for public or voluntary bodies or pledge financial support.
Charities and town hall organizations were told to gauge the extent of the crisis and come back next week with detailed figures of the amounts invested and the impact this would cause. Hospitals and universities yesterday became the latest victims of the collapsed Icelandic banks as the huge scale of taxpayers’ invest... more -
Why did Iceland's banks go bankrupt?
For most of the last century, Iceland was little more than a rest stop for North Atlantic fishing fleets trawling the waters between Greenland and the Faroe Islands.
Reykjavik, where much of the island’s population of 320,000 is based, still feels like a provincial port. Taxi drivers wave to the president and there is a sense that most people are linked by blood, business or politics. But for all its sleepy air, the Icelandic capital has been transformed over the past decade. A headlong expansion into foreign markets brought the country influence out of proportion to its size and made its population one of the richest, per capita, in the world.
Now, after a week in which Iceland’s top three banks collapsed and were nationalised – putting more than €20bn ($27bn, £16bn) of depositors’ money in jeopardy across Europe – fame is turning into notoriety. As Geir Haarde, prime minister, warned this week: “The danger is real that the Icelandic economy would be sucked, along with banks, under the waves and the nation would become bankrupt.”
It is a sorry finale to what Mr Haarde’s predecessors hailed as an economic transformation that turned a poor, isolated community into a powerhouse of banks and entrepreneurs, with global investments ranging from pharmaceuticals to fund management.
The island erupted on to the world’s financial stage in the early years of this decade. Icelanders bought up swaths of eastern Europe’s telecommunications market, some of the best-known names on the UK’s high street, including House of Fraser and Hamleys, and much of the Nordic banking system.
Inevitably, observers questioned where the money had come from. Tales of strange links to Russia abounded. “It is often implied that there is something dubious or shady about the origin of Icelandic financial strength,” Ólafur Ragnar Grímsson, president, said in 2006, commenting on “far-fetched explanations” of Iceland’s sudden wealth.
Much of the mystery centred around the charismatic figure of Thor Björgólfsson, even now barely 40, Iceland’s richest man and founder of Actavis, the world’s fourth largest maker of generic drugs. He began his career by setting up a brewery in St Petersburg, which he sold to Heineken in 2002. The sale earned him $100m.
About the same time, Jón Ásgeir Jóhannesson, the youthful chief executive of Baugur, Iceland’s biggest retailer, suddenly materialised as the unknown acquirer of a big stake in Arcadia, the UK retail chain.
In reality, said Mr Grímsson, Iceland’s success was easily explained. The country had benefited from a fortuitous combination: globalisation and widespread removal of trade and financial controls, together with innovations in information technology that made its geographical isolation irrelevant.
At the foundation of Iceland’s success was aluminium smelting and a well-funded pension system based on the fisheries industry that had the money and a new appetite to invest in equities. This coincided with the deregulation and privatisation of the banking system, which allowed the island’s banks – Kaupthing, Landsbanki and Glitnir (then called Islandsbanki) – to diversify away from their traditional bases in farming and fisheries.
A class of 30-something business school alumni such as Hreidar Mar Sigurdsson, now chief executive of Kaupthing, the bank that until its nationalisation this week was Iceland’s biggest listed company, were quick to take advantage of these changes. As one banker says: “Kaupthing thought of themselves as the Goldman Sachs of the Arctic.”
Bankers and businessmen borrowed heavily abroad, invested in each others’ companies and expanded overseas. When asked where Bakkavor, the Icelandic food company, had got the money to buy Geest – a deal that turned Bakkavor into the UK’s largest ready-made food company – Mr Grímsson said: “The answer was very simple: ‘It comes from Barclays Bank’.” Much of Mr Björgólfsson’s backing came from Deutsche Bank.
(continues at link) For most of the last century, Iceland was little more than a rest stop for North Atlantic fishing fleets trawling the waters between G... more -
Björk and Thom Yorke team up for new single
Björk and Thom Yorke are joining forces for a good cause: protecting the Icelandic environment. On October 20, One Little Indian will release a new Björk single "Nattura."
The promo reads:
"Nattura" (which features Thom Yorke from Radiohead on backing vocals) highlights a grass roots movement in Iceland to reclaim the country’s natural ressources and wildeness from the hands of big business and polution. But Nattura is more of a protest and rallying cry rather than a lecture.
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Can't wait!
However, if I were Björk, I would be more concerned with Icelandic economy. Björk and Thom Yorke are joining forces for a good cause: protecting the Icelandic environment. On October 20, One Little Indian will ... more -
Iceland sells part of their land on eBay?
With the recent collapse of Iceland stock market, it may seem that they are trying to sell part of their country to gain money and use it to try and restore their economy. They have also asked Russia for money to help save their economy.
Iceland will provide the winning bidder with a habitable environment, Icelandic horses, and a unstable financial situation.
It is located on the Mid-Atlantic Ridge and it is near the major cities.
And for some reason, Greenland and the Icelandic singer Bjork are to be not included in this auction. The highest bid currently as of October 10, 2008 is £10,000,000.00.
Any take on what is going on?
Edited 10/10/08 3:49pm Pacific Time:
It seems that the bidding has been cancelled and may have been a hoax. This may be a way to get people's attention about Iceland and their collapsed stock market. Either way, Iceland is in trouble with their currency and economy falling. With the recent collapse of Iceland stock market, it may seem that they are trying to sell part of their country to gain money and use... more -
Iceland's largest bank seized and entire stock market halted, doomed be the u...
Well after the third largest and second largest banks were seized.. Iceland is officially totally screwed...
The Iceland stock market has completely and totally collapsed.
Will Russia buy Iceland in time? Well after the third largest and second largest banks were seized.. Iceland is officially totally screwed... ... more -
Gordon Brown to sue Iceland over frozen bank deposits
Gordon Brown has revealed that the UK government is considering legal action over the conduct of Iceland's government following bank collapses. Gordon Brown has revealed that the UK government is considering legal action over the conduct of Iceland's government following b... more
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UK uses Anti-Terrorism Law to Freeze Iceland Assets
British investors were keen clients of Icelandic banks before the storm hit and Iceland was outraged when Britain used an anti-terrorism law to freeze assets in Landsbanki.
Prime Minister Geir Haarde warned earlier of the risk of national bankruptcy after the central bank tried then abandoned attempts to prop up the currency. "I want to emphasize...that people remain calm and understand that the transaction system is fully functioning and deposits are safe," he said.
The prime minister said he had spoken to British Chancellor Alistair Darling, who had assured him that transactions between the two countries would return to normal. British investors were keen clients of Icelandic banks before the storm hit and Iceland was outraged when Britain used an anti-terrori... more -
UK Government to sue Iceland over savings dispute
Alistair Darling has moved to reassure savers worried that they have lost their money with the firm's collapse.
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Does Britain Want to Kill Iceland?
Britain added to the financial chaos engulfing Iceland by declaring Wednesday it planned to sue over lost deposits held by thousands of Britons with Icelandic bank accounts. Britain added to the financial chaos engulfing Iceland by declaring Wednesday it planned to sue over lost deposits held by thousands o... more
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Holy crapo! Iceland's doomed to near bankruptcy
You think the U.S. economy and the dollar is screwed, Iceland has it worse...
And they don't have the Clinton-BarneyFrank-FreddieMacFannieMae-Bush-Enron-AIG-Iraq-Lehman mess to blame...
Last week, the country's third largest bank was nationalised. This week, the government dismissed the board of directors of Landsbanki, its second-largest bank, and put it into receivership. On Monday, the Prime Minister, Geir Haarde, warned its citizens the country faces bankruptcy.
On the bright note, with the krona, being devalued so much, vacation plans to beautiful Iceland are much more affordable?
(Hey, an Iceland story here not involving Sigur Ros) You think the U.S. economy and the dollar is screwed, Iceland has it worse... ... more -
Iceland nationalises bank and seeks Russian loan
Iceland's government has nationalised it's second largest bank, and appealed to Russia to give it £3bn to protect against "national bankruptcy". Iceland's government has nationalised it's second largest bank, and appealed to Russia to give it £3bn to protect against &#... more
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Iceland's Vanishing $5.4B Loan
Now you see it, now you don't: Russia's $5.4 billion loan to the Icelandic central bank went from being a done deal in the morning to a topic of "negotiation" in the afternoon on Tuesday.
The Icelandic central bank said Tuesday afternoon that Iceland and Russia had "decided to start" negotiations on financial issues in the next few days, a far cry from that morning's detailed announcement of a 4 billion-euro ($5.4 billion) loan approved at the very top by prime minister Vladimir Putin. (See "A Bank Falls Through Iceland's Cracks.")
A spokesman for the Icelandic central bank could not explain exactly why the announcement had changed so dramatically, but one banking source based in Iceland told Forbes.com that the central bank had quite simply "jumped the gun." He said that the detailed morning announcement had so upset the Russian ambassador to Iceland, Victor I. Tatarintsev, that he had called Icelandic premier Geir Haarde directly to clear up the matter.
Where that leaves the loan is not clear: The central bank's spokesman said that an Icelandic delegation would travel to Moscow to "finalize" the financial situation. He refused to confirm or deny the reported phone conversation between Tatarintsev and Haarde.
This incident may prove central in highlighting the political stakes at the heart of Iceland's economic crisis. Despite Iceland's status as a member of the pro-Western North Atlantic Treaty Organization, and as an initial supporter of the war in Iraq, it has found itself appealing to Eastern countries like Russia--and, reportedly, China--in a desperate bid for cash.
The Icelandic central bank said Tuesday morning that the Russian loan was needed to help bolster its foreign exchange reserves, which have dwindled to around 1.6 billion euros ($2.2 billion). The central bank also said it would peg its plunging currency at a level of 131 kroner to the euro, or a trade-weighted index of 175, in the inter-bank market.
The Icelandic government seized one of its biggest banks, Landsbanki, on Tuesday, after agreeing to guarantee all banking deposits in the country. This is the second effective nationalization in the space of a week in Iceland, and marks a dismal end to the past decade's international growth spurt for Icelandic banks. Now you see it, now you don't: Russia's $5.4 billion loan to the Icelandic central bank went from being a done deal in the m... more -
Iceland tells British investors 'We can't safeguard your cash'
More than 200,000 British investors in the internet bank Icesave were last night shut out from a guarantee to protect 100 per cent of their savings.
In a short statement, the Icelandic government said it would fully guarantee deposits in domestic banks.
But heads of Landsbanki, which runs Icesave, admitted that its UK-based savers would not get the same protection for their £4.5billion investments should it go bust. More than 200,000 British investors in the internet bank Icesave were last night shut out from a guarantee to protect 100 per cent of ... more -
Iceland's currency, is in freefall and is rated just above those of Zimbabwe ...
Iceland is on the brink of collapse. Inflation and interest rates are raging upwards. The krona, Iceland's currency, is in freefall and is rated just above those of Zimbabwe and Turkmenistan. One of the country's three independent banks has been nationalised, another is asking customers for money, and the discredited government and officials from the central bank have been huddled behind closed doors for three days with still no sign of a plan. International banks won't send any more money and supplies of foreign currency are running out.
This North Atlantic volcanic island, which is the size of Cuba, with a population of 320,000 - the size of Coventry's - is an unlikely player on the global financial stage. It is famous for its fish, geysers and for winning the UN's 2007 'best country to live in' poll. But Iceland built its extraordinary wealth on the crest of the worldwide credit boom and now the crunch is sweeping it away, bankrupting a people for whom the past eight years have been, for most of them and by their own admission, one long party.
The nation's celebrated rags-to-riches story began in the Nineties when free market reforms, fish quota cash and a stock market based on stable pension funds allowed Icelandic entrepreneurs to go out and sweep up international credit. Britain and Denmark were favourite shopping haunts, and in 2004 alone Icelanders spent £894m on shares in British companies. In just five years, the average Icelandic family saw its wealth increase by 45 per cent.
But, as a result of the international banking crisis, the billionaires who own everything from West Ham United football club to the Somerfield supermarket chain, Hamleys toy shops and the House of Fraser, are in trouble and the country is drowning in debt.
Iceland's cheap labour force, the Poles and Lithuanians, have left already - there's little point in sending home such a worthless currency, and the tourist season is over. Iceland is on its own. Iceland is on the brink of collapse. Inflation and interest rates are raging upwards. The krona, Iceland's currency, is in freefa... more -
Iceland's economy on the brink of collapse
Europe shivers as credit freeze hits Iceland.
Iceland's economy is on the brink of collapse, after the krona fell 27 per cent against the dollar last week. The fall sent fresh shockwaves through the UK financial system, as Icelandic banks have invested billions in the British economy. One of the biggest, Kaupthing, is estimated to have underwritten about £3bn in debt to finance deals in this country, and just two of the banks have more than 150,000 British internet customers.
The Icelandic government is believed to be considering a bailout plan after it was revealed the three largest banks have liabilities eight times greater than the country's GDP! Europe shivers as credit freeze hits Iceland. ... more -
Country Fast Facts: Iceland
Settled by Norwegian and Celtic (Scottish and Irish) immigrants during the late 9th and 10th centuries A.D., Iceland boasts the world's oldest functioning legislative assembly, the Althing, established in 930.
Independent for over 300 years, Iceland was subsequently ruled by Norway and Denmark.
Fallout from the Askja volcano of 1875 devastated the Icelandic economy and caused widespread famine.
Over the next quarter century, 20% of the island's population emigrated, mostly to Canada and the US.
Limited home rule from Denmark was granted in 1874 and complete independence attained in 1944. Literacy, longevity, income, and social cohesion are first-rate by world standards. Settled by Norwegian and Celtic (Scottish and Irish) immigrants during the late 9th and 10th centuries A.D., Iceland boasts the world&... more -
United Kingdom Talk Tuesday 30th September 2008
Tuesday's edition of my three times a week talk show.Watch the show here on CURRENT TV on Tues, Thurs & Sats.
In today's show :
A package arrives.
"Visions".
A nice smell.
Trying to find excuses.
Berkshire sounds of the countryside at http://www.chrisreardon.co.uk
Banks wanna borrow my money ! LOL.
Half in the sun, half in the shade.
A new dog.
Overwhelmed.
Richard knows these things.
A terrible waste of fish.
Does a long distance relationship work ?
Maybe this time.
Other "Disneyland's".
You could have saved £10,000 - £15,000.
London Symphony Orchestra.
He must drive his wife mad.
Strange names for dogs.
Controlled by our pets.
How do spiders attach their webs at each end ?
E.T.Phone home.
Love on the internet.
It's all wrong dear.
Your favourite Disney film ?
If you shot yourself in the head, would you feel it ?
An Icelandic event just gone.
Nothing other than earth.
chris@unitedkingdomtalk.co.uk
WWW.UNITEDKINGDOMTALK.CO.UK Tuesday's edition of my three times a week talk show.Watch the show here on CURRENT TV on Tues, Thurs & Sats. ... more -
What Iceland can teach America
I traveled to Iceland this summer to explore that nation’s unique use of alternative energy sources.
It was like journeying through time as much as space—as though we had gone back a full century to when the human impact on the environment wasn’t so harsh.
And yet while Iceland’s otherworldly landscape evokes prehistoric times, the small island nation’s energy use is state–of-the-art.
Iceland's commitment to harnessing renewable energy resources is absolutely inspirational. Their use of geothermal power is groundbreaking.
As much as 70% of Iceland's total energy (and 100% of its electricity and heat) comes from renewable energy. This is the highest percentage of any country in the world and puts Iceland on track to meet its goal of providing 100% of its energy needs from zero-emission renewable energy sources before mid-century.
To complete their mission, Iceland plans to use geothermal electricity to split hydrogen from water and use hydrogen fuel cells for its fishing fleets and transportation sector, the last industries in Iceland still using fossil fuels.
The Iceland story shows what's possible and serves as an example of what's possible here in the U.S. if our leaders take action.
It's true that Iceland's geography and geology is much different than America's. It's a small island in the middle of the Atlantic, sitting atop the Mid-Atlantic Ridge. It is home to hundreds of volcanoes and hot springs.
Icelanders are therefore blessed with rich geothermal and hydroelectric resources. But so is America.
A 2006 MIT study concluded that about 100 Gigawatts of economically viable energy could be developed in the lower 48 states. That's enough energy to power 50 million homes.
Iceland's ability to tap their renewable energy resources and maintain a modern, growing economy is a remarkable case study in how we can break free from our addiction to fossil fuels.
During my trip, my wife and daughter joined me for a visit to Iceland’s remote Northwest. There, our guide led us across rugged open lands to the very edge of a tall cliff overlooking the cold north Atlantic.
We peered cautiously over the edge and were dazzled to see that the cliff was home to an incredible sea bird colony. I found I was mere inches from an Atlantic puffin, which was gazing back at me with an expression of mild curiosity.
Iceland has taken care to protect its wildlife from exotic predators; so this puffin with its absurdly oversized and colorful beak knew it had no reason to fear me. And so we looked at each other. Next to me, my 12-year-old daughter Nicole was breathless with wonder.
I’d wanted Nicole to see an unspoiled part of the world —and here we were. That one cliff was a reminder of all that we’ve already lost due to carelessness and environmental abuse, and, at the same time, it was a symbol of all that we can regain.
That’s when I was reminded once again on a most personal level why our work is so important and why it is so important for America to follow Iceland's lead toward a clean, renewable energy future.
And to get there, we need a national cap on global warming pollution to unleash our clean energy inventors and spur technological innovation. I traveled to Iceland this summer to explore that nation’s unique use of alternative energy sources. ... more
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