They placed a bet, they lost and should be hung out to dry?
One thing that nobody seems to be saying about the Icelandic saving bank situation is that those who invested with the banks were either stupid or greedy or both.
Didn’t any of the individual or institutional investors stop to think and ask why the banks were ready and willing to pay interests rates that were way ahead of anything else that was available in the UK? Didn’t they consider just for one moment that this might have meant that their investments were more risky?
Those who handed over their cash to these banks were not normal savers but gamblers who were getting odds of up to 2/7 that their money would be safe. Alas they lost so if it had been Ladbrokes and not Kaupthing it would have been tough shit.
To put that price in context the best you can get on Barack Obama this morning is about 1/5.
Surely Darling and Brown have got to think of those who were not seduced by the amazing returns that were being offered who now through their taxes and the costs of the industry bail out scheme will be forced to fork out to help cover the losses of the interest rate gamblers who were stupid enough, in many cases, to put their life savings on.
I’m a gambler but this was too risky a bet for me. Late last year I took early retirement so I could work full-time on PB and now look partly to the interest from my pension lump sum to live on. I checked out the 7% with Kaupthing which simply did not make sense compared with the 5% that was available from HSBC. The result was a big cut in my possible income but a much safer bet.
But those who took the Icelandic gamble have been enjoying the vastly inflated returns and now, thanks to Brown and Darling, could get most of their money back.
There’s something wrong somewhere and what an appalling example.