Iceland Says NO!
Research for Online Investors

by John Dalt

3/10/10

Over the weekend, Icelanders voted 93% against reimbursing the British and Netherlands governments $5.3 billion dollars.  This was money paid to Icesave account holders of Iceland’s Landsbanki bank which collapsed in the 2008 credit crunch in Britain and Holland.

The bank offered higher interest rates than local banks and attracted deposits in those countries with their branches.  European banking regulations required banks be covered by an insurance fund to operate in other countries.  Iceland had such a fund (like our FDIC) and Landsbanki was current in its payments.

The bank had grown so large with the high interest rate offers, there was not enough money in the fund to cover all depositors.  EU regulations do not require a country to dip into its treasury to make depositors whole if the fund is short, but politics got involved.  Britain is facing elections, and depositors losing money to a foreign bank would have presented Gordon Brown, England’s Prime Minister, with an unhappy electorate.

Britain made every depositor whole, even above the insurance limit of 35,000 Euros at a cost of $3.5 billion dollars.  Now they want Iceland to pay the government back.  Britain and Netherlands are threatening to block Iceland entering the EU if the ‘debt’ is not repaid.

Iceland is waiting on the second half of a rescue package of $2.1 billion dollars from the International Monetary Fund (IMF).  Britain and Holland have hinted at slowing this money if Iceland does not pay them back.

Iceland has no legal obligation to pay back depositors in a private bank, and should not. They regulated it, and taxed it, and insured it.  Britain and the Netherlands wrote checks to their citizens for political reasons, and are trying to force Iceland to pay them back. Hooray for Iceland for saying NO.

How much of the U.S. TARP funds paid to AIG went to foreign banks?  How many mortgage backed securities did our FDIC buy back from foreign banks?  Taxpayers did not owe them a dime, but the congress was bum rushed into a bail-out that spread money around far and deep.

Your editor happily drove to the pharmacy yesterday to pick up a $12.50 plastic (tamper proof) bottle of pills.  While discussing health care the last few weeks, I have contracted a nasty nasal infection.  The first round of antibiotics cleared the symptoms but evidently didn’t kill the germ.

For less than a meal out, I have been given a new lease on life.  All cheerfully supplied by my neighborhood pharmacist, after my doctor called in the prescription.

For less than the cost to fill the car with gas, I received a cutting edge pharmaceutical that may save my life.  You see, the infection has migrated to my upper jaw.  From the jaw area, it can easily move to your heart.  A bacterial infection can cause damage to the heart muscle.

This warning was given to me by my former brother-in-law, the pharmaceutical salesman.  My doctor doesn’t talk in such dire tones, except when he warns me about some of my bad habits.

For the last 25 years J.H. has been our family doctor.  He is a former Division 1A football player, great kids, and works like a dog.  Why does anyone become a general practitioner?  The hours are terrible; truthfully it has to be a calling to help people.  After seeing patients all day, he spends evenings and weekends managing his practice.  We talked about leaving medicine if the present bill passes.  He is sad about it, because over 50 families are supported by his practice. He works harder than 90% of us and then gets vilified and hassled by our government. Crazy.  I am taking him a copy of “Atlas Shrugged” next time I see him.

For twelve bucks, I saved my wife the unpleasantness of planning my last rites.  And our jokers in Washington want to double down on their great experiment with socialized medicine.

The medicine has many side effects, one is difficulty sleeping.  And when you do sleep, dreams are vivid.  I will tell you about some of the characters I met last night another time.  I need to get to know them better first.  I will probably do more research tonight.

To the Mailbag:
“We have one of the highest infant mortality rates in the industrialized world and our life expectancy lags behind most of the countries with universal health care.   If your name is Rockefeller or you are the prince of Dubai, this is the place to go when ill.  Is best for the rich best?” ---subscriber P.D.

John’s response: Best for the rich is not best, but that is not the point, except from a class-warfare standpoint.  Best for those that pay is the best.  Why is it better (fair) to reduce my health care so people that won't pay for their own can have it free?  When you use World Health information without understanding why it is skewed you cause concern.  Infant mortality?  Where would you like your grandchild born?  In the U.S. a premature birth has a wonderful chance at survival.  In most other countries?  Our doctors deliver preemies that cannot survive on their own, some with terrible handicaps. Many must remain in intensive care for months.  Most survive, but some do not make it.  Thus our infant mortality rates are higher, and U.S. life expectancy is less.  I would rather have the 'fighting' chance.

My father turns 90 this month, Medicare is socialized medicine.  Is this causing our life expectancy to be less than other countries?  It is run by the government.  Should we drop it?  Fine with me.  The government should only guarantee equal treatment under the law, not equal medical treatment, nor equal results.  Life expectancy?  It's not health care, it is lifestyle.  Look at fat Americans.  Our poorest live like kings on government largess.  Gorging themselves on junk food.  Do you see 300 lb. poor people in other countries?  I don't wish anyone ill, I just don't wish anyone to profit from others work.  We are not a country of moochers; at least I hope we are not there yet.

Now back to my dreams.

The information presented in this newsletter is based on generally available news releases, corporate filings, current events, interviews and the editor’s opinions.  It may contain errors and you should not make investment decisions based solely on what you believe you have read here.  Do your own research, it is your money.  If you lose it, it is your responsibility, not ours or your grandmothers!  The editor may or may not have a position in any securities discussed.  The editor may have held a position in a security earlier, or in the future.

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