"bite me"

is, loosely translated, what the leader of the opposition "red-green alliance" said to a government member of Alþing in Iceland, who claimed the opposition had been procedurally delaying the setup and start of investigation into the Icelandic banking crisis.

This came during a vote of no confidence in the government.

The vote failed by a huge margin.

Surviving Iceland is a new and interesting blog - anecdotal and free associating news "as it happens" from Reykjavík.

I was somewhat flabbergasted to also hear that just now has someone put a motion to use emergency powers to freeze the assets of the owners and managers of the commercial banks and investment firms who went bankrupt.

Oh, and Iceland had a riot - its second ever, the previous was when Alþing voted to join NATO after having explicitly expressed its intention to remain neutral.
This time it came when a small mob stormed the central police station, to try to get the release of a man arrested at a previous protest. He was arrested on an outstanding warrant - he had taken down the Icelandic flag flying over the Alþing building and replaced it with the flag of a major corporation.

So now we have teargas and pepperspray squirting about in downtown, again.

Oh, Iceland, in case you wonder, did get an IMF loan.
Then the UK, Netherlands and Germany gave them loans - basically enough to pay the insured depositors of the respective banks in the respective countries.
So now the whole country owes for the folly of the few, who still have their customized private jets, and yachts, and second homes in Surrey and Caribbean.
Be interesting to see if this liability will be assumed if and when Barclays, and ING and Citibank fail, and other countries face bankrupt banks with massive deposits from other countries.
Ah well.

At least Iceland has food and energy, and oil prices are down, for now, due to demand destruction.
Apparently 5,000 cars have been sold abroad, at a discount.
But Iceland still has an export sector, with high value food exports, energy intensive industries, and light high tech niche sectors in software, machinery, clothing and entertainment.
Construction, public works, import sales, financials etc have been crushed, and will take a long time to recover.

The really interesting outrage is developing over the asset sales of the bankrupt companies...
See, a lot of their funds went to private banking and direct investment, often in partnerships.
These weren't subprime mortgage bonds or suburban mall construction loans, they concentrated on high end commercial deals, funding for billionaire investors to cherry pick high end firms with long track record and good revenue deals.
These loans have not defaulted, they are paying their interest, but they are not callable.
And they have little market value in the current crisis.

So... private investors were making non-competitive bids for them to the regulators and bankruptcy courts - you guessed it, the people who held the loans. Including in some cases the Icelandic former bank owners.

Neat trick - take in a few billion in deposits, paying interest slightly over market, lend it to your billionaire friends, default leaving the government liable for the deposits, and have your friends buy back their own loans at 20% or less of the original loan - just 2-3 years interest gets you out of a decade loan at 8%.
Sweet.

Iceland has had no capital punishment, though I believe it is still formally on the books; but 300,000 counts of felony robbery should go along way - with sentences to be served consecutively.

Not the the Old Boys would ever do that to their new friends.