http://www.oneworldchronicle.com/?p=5203
"The island's households were helped by an agreement between the government and the banks, which are still partly controlled by the state, to forgive debt exceeding 110 percent of home values. On top of that, a Supreme Court ruling in June 2010 found loans indexed to foreign currencies were illegal, meaning households no longer need to cover krona losses," Bloomberg News reported.
Lessons learned, but who's listening?
"The lesson to be learned from Iceland's crisis is that if other countries think it's necessary to write down debts, they should look at how successful the 110 percent agreement was here," Thorolfur Matthiasson, an economics professor at the University of Iceland in Reykjavik, told Bloomberg. "It's the broadest agreement that's been undertaken."
He went on to say that without the agreement, homeowners would have succumbed to their debt after the ratio of obligation to income skyrocketed to 240 percent in 2008.
Iceland's $13 billion annual economy declined 6.7 percent the following year, in 2009, but has since rebounded and will expand by 2.4 percent this year and in 2013, the OECD estimated. Meanwhile, in the rest of debt-ridden Europe, the economy will collectively expand by a paltry 0.2 percent this year and only 1.6 percent the next, OECD estimates said in November.
Housing is now just about 3 percent below values in September 2008, just before the financial collapse. So improved is the nation's economic and fiscal outlook that Fitch Ratings in February raised the country to investment grade with a stable outlook, stating the country's
"unorthodox crisis policy response has succeeded."
Here's a concept: People first
Analysts say Iceland's approach to solving its financial and economic problems put people ahead of markets at every step.
That said, Icelanders are still reeling from the financial carnage.
"There are still a lot of people facing difficulties; at the same time there are a lot of people doing fine," Kristjan Kristjansson, a spokesman for Landsbankinn hf, said. "It's nearly impossible to say when enough is enough; alongside every measure that is taken, there are fresh demands for further action."
That may come in the form of legal action. A new leadership coalition, led by Social Democrat Prime Minister Johanna Sigurdardottir that was voted into office in early 2009, has authorities looking into who was most responsible for the banking meltdown. And parliament is still weighing whether to move forward with an indictment brought against former Prime Minister Geir Haarde in 2009 for his role in the crisis.
A new coalition, led by Social Democrat Prime Minister Johanna Sigurdardottir, was voted into office in early 2009. The authorities are now investigating most of the main protagonists of the banking meltdown.
In all, a special prosecutor has announced that as many as 90 people may be indicted, while more than 200 others, including former chief executives of the country's three largest banks, will face criminal charges.
In the U.S., meanwhile, no top bank executives or lawmakers have faced prosecution for their roles in the subprime mortgage meltdown, though the federal Securities and Exchange Commission said in 2011 it had sanctioned 39 senior banking officials for conduct tied to the housing market collapse. Big deal.
Meanwhile, the smoke still has not cleared from the bursting housing bubble; so far, home values have declined 33 percent since peaking in 2006. Yet the best Americans can get from their leaders after being suckered into purchasing homes at what turned out to be hugely (artificially) inflated prices is a proposal by President Obama earlier this year to expand loan modifications that included "some" reductions in principal loan amounts.
Gee, thanks, guys.
on the other hand , if you are a bank , you just are given money at zero interest rates and not even required to pay it back apparently.....
http://beforeitsnews.com/economy/2012/09/first-audit-in-the-federal-reserves-nearly-100-year-history-were-posted-today-the-results-are-startling-2449770.html
Source: Sott
What was revealed in the audit was startling:
$16,000,000,000,000.00 had been secretly given out to US banks and corporations and foreign banks everywhere from France to Scotland. From the period between December 2007 and June 2010, the Federal Reserve had secretly bailed out many of the world’s banks, corporations, and governments. The Federal Reserve likes to refer to these secret bailouts as an all-inclusive loan program, but virtually none of the money has been returned and it was loaned out at 0% interest. Why the Federal Reserve had never been public about this or even informed the United States Congress about the $16 trillion dollar bailout is obvious – the American public would have been outraged to find out that the Federal Reserve bailed out foreign banks while Americans were struggling to find jobs.
To place $16 trillion into perspective, remember that GDP of the United States is only $14.12 trillion. The entire national debt of the United States government spanning its 200+ year history is “only” $14.5 trillion. The budget that is being debated so heavily in Congress and the Senate is “only” $3.5 trillion. Take all of the outrage and debate over the $1.5 trillion deficit into consideration, and swallow this Red pill: There was no debate about whether $16,000,000,000,000 would be given to failing banks and failing corporations around the world.
In late 2008, the TARP Bailout bill was passed and loans of $800 billion were given to failing banks and companies. That was a blatant lie considering the fact that Goldman Sachs alone received 814 billion dollars. As is turns out, the Federal Reserve donated $2.5 trillion to Citigroup, while Morgan Stanley received $2.04 trillion. The Royal Bank of Scotland and Deutsche Bank, a German bank, split about a trillion and numerous other banks received hefty chunks of the $16 trillion.
Americans should be swelled with anger and outrage at the abysmal state of affairs when an unelected group of bankers can create money out of thin air and give it out to megabanks and supercorporations like Halloween candy. If the Federal Reserve and the bankers who control it believe that they can continue to devalue the savings of Americans and continue to destroy the US economy, they will have to face the realization that their trillion dollar printing presses will eventually plunder the world economy.
Norway writes down 90% of populations mortgage debt. Why not here?
Refreshing News -
In 1997, Norway instituted Debt Forgiveness and “Wrote Down” 90% of the Countries Mortgage Debt.
It’s been done, documented, and completely hidden from the World, through the World Media, until 19 April 2012.
Complete and Total Censorship of anything Debt Forgiveness Related, World Wide.
It’s been done, documented, and completely hidden from the World, through the World Media, until 19 April 2012.
Complete and Total Censorship of anything Debt Forgiveness Related, World Wide.
IMF SAYS TARGETED DEBT REDUCTION POLICIES CAN WORK
The IMF has said that targeted household debt reduction policies can deliver significant economic benefits.
Latest IMF report notes link between high levels of household debt and the effect on economic recovery
The IMF has said that targeted household debt reduction policies – including mortgage write-downs – can deliver significant economic benefits.
The IMF has said that targeted household debt reduction policies – including mortgage write-downs – can deliver significant economic benefits.
The International Monetary Fund made the comments in its latest World Economic Outlook.
The IMF said such policies can substantially mitigate the negative effect of household deleveraging on economic activity.
The report noted the well established link between high levels of household debt run up during a housing boom, and the effect of a high debt overhang on economic recovery.
It found that countries, like Ireland, that saw house prices and household borrowing skyrocket, saw a longer than average period of recession after the bursting of the housing bubble.
A large part of this protracted recession it said is due to households trying to reduce their debt levels, which in turn leads to less spending in the economy, driving the recession deeper and further.
“Because debt is acting as a brake on economic growth, it is important to unstick the brake” said the report’s author Daniel Leigh.
The IMF has studied the response of a number of countries to situations where large parts of the population are burdened with high mortgage debt in a recession, and finds that such programmes can help prevent self-reinforcing cycles of falling house prices and lower aggregate demand.
“Such policies are particularly relevant for economies with limited scope for expansionary macroeconomic policies and in which the financial sector has already received government report”, notes the conclusions. Ireland meets both these criteria.
The report highlighted what it calls the “bold ” household debt reduction programmes implemented in the US in the 1930′s and in
The report highlighted what it calls the “bold ” household debt reduction programmes implemented in the US in the 1930′s and in
Iceland in this crisis, which it said can “significantly reduce the number of household defaults and foreclosures and substantially reduce debt repayment burdens”.
It contrasted these examples with others that have not been successful, such as the current response to the crisis in the US and Hungary, and the policies pursued in Colombia and the Scandinavian countries in the 90′s.
As well as the “bold” approach, it said that ensuring a strong banking sector is crucial during the period of household deleveraging. It stated that the policies in Colombia and Hungary were not a success as they placed too much burden on an already fragile banking sector.
It also said the policies must be designed to have incentives for both banks and borrowers to participate, notably by offering a viable alternative to default and foreclosure.
The IMF noted that government support for household debt restructuring programmes involves clear winners and losers. “The friction caused by such redistribution may be one reason why such policies have rarely been used in the past, except when the magnitude of the problem was substantial and the ensuing social and political pressures considerable”,’ it stated.
It cited another study which found that political systems tend to become more polarised in the wake of financial crises, and raised the question of collective action problems – that distressed mortgage borrowers may be less politically organised than banks – and this can hamper efforts to implement household debt restructuring.
In the US in the 1930′s the Roosevelt administration introduced the Home Owners Loan Corporation, which bought distressed mortgages from banks with government bonds, with federal guarantees on principal and interest. It then restructured these mortgages to make them more affordable to borrowers.
In the US in the 1930′s the Roosevelt administration introduced the Home Owners Loan Corporation, which bought distressed mortgages from banks with government bonds, with federal guarantees on principal and interest. It then restructured these mortgages to make them more affordable to borrowers.
80% of the restructured loans (some 800,000) were protected from repossession by the measure, and the mortgages were subsequently sold on over time for a nominal profit at the time the programme was brought to an end in 1951. The mortgage purchases amounted to 8.4% of 1933′s GDP in the US.
The IMF said “a key feature of the HOLC was the effective transfer of funds to credit constrained households with distressed balance sheets and a high marginal propensity to consume, which mitigated the negative effects on aggregate demand” caused by the recession and need for household deleveraging.
The main mechanism to make loans more affordable was to extend the term of the mortgage – sometimes doubling the term – and converting it from a variable to a fixed rate. In a number of cases the HOLC also wrote off part of the principal to ensure that no loans exceeded 80% of the appraised value of the house.
In the case of Iceland the situation was more difficult, due in part to the much bigger proportion of the population that was affected, and to the wide presence of foreign currency mortgages.
The government and the newly constructed Icelandic banks developed a template to be used in case by case restructuring discussions between borrowers and lenders. The templates facilitated substantial debt write-downs designed to align secured debt with the supporting collateral (i.e bring the loan into line with the value of the house) and align debt service with the ability to repay.
The IMF found that such case by case negotiations safeguard property rights and reduce moral hazard, but they take time. As of January of this year, only 35% of the case by case restructuring applications had been processed. To speed things up, Iceland has introduced a debt forgiveness plan which writes down deeply underwater mortgages to 110% of the households’ pledgeable assets.It noted that only when a comprehensive framework was put in place and a clear expiration date for relief measures announced that debt write-downs finally took off. As of January 2012, 15 to 20% of all Icelandic mortgages have been or are in the process of being written down.
However, it said the jury is still out on Iceland’s plans, and said the extent to which Iceland can put its citizens back on their feet and minimise moral hazard remains to be seen.
and......
http://www.naturalnews.com/035779_Iceland_mortgage_debt_economy.html
(NaturalNews) It's probably not a concept that most U.S. banks and lawmakers want to think about, but the fact is, Iceland's economy has grown by leaps and bounds since the government there implemented widespread debt forgiveness for many of its citizens.
The initiative came about http://www.bloomberg.com " target="_blank">following protests by Icelanders in 2008-2009 who were angry at the country's leaders and bankers for its fiscal and economic collapse. At one point, protestors gathered around the Parliament building and pelted it with rocks.
In the ensuing months, Iceland banks have forgiven loans equaling 13 percent of the country's annual gross domestic product, which has eased the debt burden for more than 25 percent of Iceland's population, according to a February report published by the Icelandic Financial Services Association.
"You could safely say that Iceland holds the world record in household debt relief," Lars Christensen, chief emerging markets economist at Danske Bank A/S in Copenhagen, told Bloomberg News. "Iceland followed the textbook example of what is required in a crisis. Any economist would agree with that."
By any definition, the initiative has been a success.
Iceland's slow ascent out of the economic abyss began in 2008, following an $85 billion default by the country's banks. Its economy in 2012 will surpass that of the entire euro zone, as well as the developed world on average (including the world's largest economy, the United States, whose economy grew at an anemic 2.2 percent in the first quarter of this year), according to an estimate by the Organization for Economic Cooperation and Development (OECD).
The initiative came about http://www.bloomberg.com " target="_blank">following protests by Icelanders in 2008-2009 who were angry at the country's leaders and bankers for its fiscal and economic collapse. At one point, protestors gathered around the Parliament building and pelted it with rocks.
In the ensuing months, Iceland banks have forgiven loans equaling 13 percent of the country's annual gross domestic product, which has eased the debt burden for more than 25 percent of Iceland's population, according to a February report published by the Icelandic Financial Services Association.
"You could safely say that Iceland holds the world record in household debt relief," Lars Christensen, chief emerging markets economist at Danske Bank A/S in Copenhagen, told Bloomberg News. "Iceland followed the textbook example of what is required in a crisis. Any economist would agree with that."
By any definition, the initiative has been a success.
Iceland's slow ascent out of the economic abyss began in 2008, following an $85 billion default by the country's banks. Its economy in 2012 will surpass that of the entire euro zone, as well as the developed world on average (including the world's largest economy, the United States, whose economy grew at an anemic 2.2 percent in the first quarter of this year), according to an estimate by the Organization for Economic Cooperation and Development (OECD).
And, while the rest of the continent continues to drown in debt, most polls now indicate that Icelanders don't want any part of joining the European Union, which is in its third year of debt crisis.
"The island's households were helped by an agreement between the government and the banks, which are still partly controlled by the state, to forgive debt exceeding 110 percent of home values. On top of that, a Supreme Court ruling in June 2010 found loans indexed to foreign currencies were illegal, meaning households no longer need to cover krona losses," Bloomberg News reported.
Lessons learned, but who's listening?
"The lesson to be learned from Iceland's crisis is that if other countries think it's necessary to write down debts, they should look at how successful the 110 percent agreement was here," Thorolfur Matthiasson, an economics professor at the University of Iceland in Reykjavik, told Bloomberg. "It's the broadest agreement that's been undertaken."
He went on to say that without the agreement, homeowners would have succumbed to their debt after the ratio of obligation to income skyrocketed to 240 percent in 2008.
Iceland's $13 billion annual economy declined 6.7 percent the following year, in 2009, but has since rebounded and will expand by 2.4 percent this year and in 2013, the OECD estimated. Meanwhile, in the rest of debt-ridden Europe, the economy will collectively expand by a paltry 0.2 percent this year and only 1.6 percent the next, OECD estimates said in November.
Housing is now just about 3 percent below values in September 2008, just before the financial collapse. So improved is the nation's economic and fiscal outlook that Fitch Ratings in February raised the country to investment grade with a stable outlook, stating the country's
"unorthodox crisis policy response has succeeded."
Here's a concept: People first
Analysts say Iceland's approach to solving its financial and economic problems put people ahead of markets at every step.
When it was judged in October 2008 that the country's banks could not be saved, the government stepped in immediately and fenced in domestic accounts while leaving international creditors out of the loop. "The central bank imposed capital controls to halt the ensuing sell-off of the krona and new state-controlled banks were created from the remnants of the lenders that failed," said Bloomberg.
That said, Icelanders are still reeling from the financial carnage.
"There are still a lot of people facing difficulties; at the same time there are a lot of people doing fine," Kristjan Kristjansson, a spokesman for Landsbankinn hf, said. "It's nearly impossible to say when enough is enough; alongside every measure that is taken, there are fresh demands for further action."
That may come in the form of legal action. A new leadership coalition, led by Social Democrat Prime Minister Johanna Sigurdardottir that was voted into office in early 2009, has authorities looking into who was most responsible for the banking meltdown. And parliament is still weighing whether to move forward with an indictment brought against former Prime Minister Geir Haarde in 2009 for his role in the crisis.
A new coalition, led by Social Democrat Prime Minister Johanna Sigurdardottir, was voted into office in early 2009. The authorities are now investigating most of the main protagonists of the banking meltdown.
In all, a special prosecutor has announced that as many as 90 people may be indicted, while more than 200 others, including former chief executives of the country's three largest banks, will face criminal charges.
In the U.S., meanwhile, no top bank executives or lawmakers have faced prosecution for their roles in the subprime mortgage meltdown, though the federal Securities and Exchange Commission said in 2011 it had sanctioned 39 senior banking officials for conduct tied to the housing market collapse. Big deal.
Meanwhile, the smoke still has not cleared from the bursting housing bubble; so far, home values have declined 33 percent since peaking in 2006. Yet the best Americans can get from their leaders after being suckered into purchasing homes at what turned out to be hugely (artificially) inflated prices is a proposal by President Obama earlier this year to expand loan modifications that included "some" reductions in principal loan amounts.
Gee, thanks, guys.
on the other hand , if you are a bank , you just are given money at zero interest rates and not even required to pay it back apparently.....
http://beforeitsnews.com/economy/2012/09/first-audit-in-the-federal-reserves-nearly-100-year-history-were-posted-today-the-results-are-startling-2449770.html
First Audit Results In The Federal Reserve’s Nearly 100 Year History Were Posted Today, They Are Startling!
Saturday, September 1, 2012 12:50
Rep. Ron Paul (R-Tex.) wins (again) the most significant victory of his congressional career. He has taken his pet issue since the 1970s–the unwarranted power and secrecy of the Federal Reserve–from something pretty much no one but him cared about six years ago, through a bestselling book and mass movement by 2009, the second time he’s gotten the House of Representatives to vote to widen the government’s powers to audit the Fed’s activities.
Huffington Post with details about the vote , and on Paul’s Democratic ally equally upset with the Fed’s lack of transparency, Rep. Dennis Kucinich (D-Ohio):
In a rare moment of bipartisanship, the House overwhelmingly passed a bill by Rep. Ron Paul (R-Texas) to audit the Federal Reserve.
The first ever GAO (Government Accountability Office) audit of the Federal Reserve was carried out in the past few months due to the Ron Paul, Alan Grayson Amendment to the Dodd-Frank bill, which passed last year. Jim DeMint, a Republican Senator, and Bernie Sanders, an independent Senator, led the charge for a Federal Reserve audit in the Senate, but watered down the original language of the house bill(HR1207), so that a complete audit would not be carried out.Ben Bernanke (pictured to the LEFT), Alan Greenspan, and various other bankers vehemently opposed the audit and lied to Congress about the effects an audit would have on markets. Nevertheless, the results of the first audit in the Federal Reserve’s nearly 100 year history were posted on Senator Sander’s webpage earlier this morning.Huffington Post with details about the vote , and on Paul’s Democratic ally equally upset with the Fed’s lack of transparency, Rep. Dennis Kucinich (D-Ohio):
In a rare moment of bipartisanship, the House overwhelmingly passed a bill by Rep. Ron Paul (R-Texas) to audit the Federal Reserve.
What was revealed in the audit was startling:
$16,000,000,000,000.00 had been secretly given out to US banks and corporations and foreign banks everywhere from France to Scotland. From the period between December 2007 and June 2010, the Federal Reserve had secretly bailed out many of the world’s banks, corporations, and governments. The Federal Reserve likes to refer to these secret bailouts as an all-inclusive loan program, but virtually none of the money has been returned and it was loaned out at 0% interest. Why the Federal Reserve had never been public about this or even informed the United States Congress about the $16 trillion dollar bailout is obvious – the American public would have been outraged to find out that the Federal Reserve bailed out foreign banks while Americans were struggling to find jobs.
To place $16 trillion into perspective, remember that GDP of the United States is only $14.12 trillion. The entire national debt of the United States government spanning its 200+ year history is “only” $14.5 trillion. The budget that is being debated so heavily in Congress and the Senate is “only” $3.5 trillion. Take all of the outrage and debate over the $1.5 trillion deficit into consideration, and swallow this Red pill: There was no debate about whether $16,000,000,000,000 would be given to failing banks and failing corporations around the world.
In late 2008, the TARP Bailout bill was passed and loans of $800 billion were given to failing banks and companies. That was a blatant lie considering the fact that Goldman Sachs alone received 814 billion dollars. As is turns out, the Federal Reserve donated $2.5 trillion to Citigroup, while Morgan Stanley received $2.04 trillion. The Royal Bank of Scotland and Deutsche Bank, a German bank, split about a trillion and numerous other banks received hefty chunks of the $16 trillion.
“This is a clear case of socialism for the rich and rugged, you’re-on-your-own individualism for everyone else.”- Bernie Sanders (I-VT)When you have conservative Republican stalwarts like Jim DeMint(R-SC) and Ron Paul(R-TX) as well as self identified Democratic socialists like Bernie Sanders all fighting against the Federal Reserve, you know that it is no longer an issue of Right versus Left. When you have every single member of the Republican Party in Congress and progressive Congressmen like Dennis Kucinich sponsoring a bill to audit the Federal Reserve, you realize that the Federal Reserve is an entity onto itself, which has no oversight and no accountability.
Americans should be swelled with anger and outrage at the abysmal state of affairs when an unelected group of bankers can create money out of thin air and give it out to megabanks and supercorporations like Halloween candy. If the Federal Reserve and the bankers who control it believe that they can continue to devalue the savings of Americans and continue to destroy the US economy, they will have to face the realization that their trillion dollar printing presses will eventually plunder the world economy.
The list of institutions that received the most money from the Federal Reserve can be found on page 131of the GAO Audit and are as follows..
Federal Reserve Chairman Ben S. Bernanke participated in a live webcast of a town hall meeting with educators on Thursday, September 30, 2010 from 2:30-3:30 p.m. EDT. During this session, Chairman Bernanke answered teachers’ questions about the Federal Reserve and the economy.
Citigroup: $2.5 trillion ($2,500,000,000,000)View the 266-page GAO audit of the Federal Reserve (July 21st, 2011):
Morgan Stanley: $2.04 trillion ($2,040,000,000,000)
Merrill Lynch: $1.949 trillion ($1,949,000,000,000)
Bank of America: $1.344 trillion ($1,344,000,000,000)
Barclays PLC (United Kingdom): $868 billion ($868,000,000,000)
Bear Sterns: $853 billion ($853,000,000,000)
Goldman Sachs: $814 billion ($814,000,000,000)
Royal Bank of Scotland (UK): $541 billion ($541,000,000,000)
JP Morgan Chase: $391 billion ($391,000,000,000)
Deutsche Bank (Germany): $354 billion ($354,000,000,000)
UBS (Switzerland): $287 billion ($287,000,000,000)
Credit Suisse (Switzerland): $262 billion ($262,000,000,000)
Lehman Brothers: $183 billion ($183,000,000,000)
Bank of Scotland (United Kingdom): $181 billion ($181,000,000,000)
BNP Paribas (France): $175 billion ($175,000,000,000)
and many many more including banks in Belgium of all places
Federal Reserve Chairman Ben S. Bernanke participated in a live webcast of a town hall meeting with educators on Thursday, September 30, 2010 from 2:30-3:30 p.m. EDT. During this session, Chairman Bernanke answered teachers’ questions about the Federal Reserve and the economy.
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