Iceland

Is Iceland the New “Cuba of the North”?

by Richard Morrison on October 8, 2008 · 1 comment

in Economy

Former CEI Warren Brookes Journalism Fellow Neil Hrab has an interesting take on Russia’s offer to help out Iceland with its own personal portion of the current global financial meltdown.

The West’s list of grievances against Russia is long…

But one can hear no peep of opposition today from any western country following Moscow’s offer to lend 4 billion euros to Iceland. Full Comment reported on that tiny nation’s current financial difficulties yesterday. Of all the countries affected by the crisis, Iceland may be hurting the worst.

Western elected officials, academics, professional diplomats and military high commands have spend the years since the USSR’s breakup laughing at the very idea that Russia might ever again be a great power. They might have to start stifling that laughter. In Iceland, at least a few people are openly wondering why it is that their old foe of the Warsaw Pact era (Iceland is a NATO member) is solvent enough to afford to advance them a loan in their hour of need — while no other western democracy was willing or able to do so. One Icelandic newspaper editor is even referring to Russia’s loan as a major “PR coup” for the Kremlin.

If the Russian government wants to drop some assistance on the Icelanders that’s fine with me, but I’d advise them that such gifts rarely arrive string-free. If Putin and his Kremlin lieutenants are confident enough to play hardball with nearby major powers, I doubt they’ll be subtle about dropping the other shoe on their newest NATO friends.

EverBank Can Multiply Your Financial Woes

by Hans Bader on October 7, 2008 · 74 comments

in Legal

Is any of our readers an expert on banking laws and customs?  The reason I ask is that recently, EverBank World Markets, after agreeing to renew a CD denominated in Icelandic Krona, suddenly closed it, purportedly because the “currency stopped trading.” 

The bank then “converted” my CD from Icelandic Krona into dollars at an eye-popping rate of 171.98 per dollar on October 6, cutting the value of my CD from $5691.11 to $3744.68 — a loss of two thousand dollars — by assigning the krona an extraordinarily low value.

What is extremely odd about this is that the exchange rate that EverBank recorded — 171.98 per dollar — is strikingly different from the rate of 112 Krona per dollar cited on EverBank’s own web site yesterday, and the rates cited by other financial information sources, like exchange-rates.org.   (Even those rates were themselves a huge drop for the Krona, which traded at around 60 per dollar at the beginning of 2008).   The net result of EverBank’s using this bizarre currency exchange rate was to reduce the value of my CD by nearly $2,000.  Icelandic currency traded at much higher rates on October 6 than the rate that Everbank used.

The rate EverBank used also finds no support at Bloomberg, the nation’s leading source of financial information, which shows the Icelandic Krona ranging from 96.68 per dollar to 128.17 per dollar in the period of October 3 through October 7.

Can any of our readers explain why EverBank did this?  And what remedies may exist under banking or contract law for what it did?

ADDENDUM, NOVEMBER 11: To all the folks who have emailed me about this: I apologize for this, but I am so busy now that I can’t respond to all your emails. I believe that one avenue for you to pursue is to file a complaint with the Office of Thrift Supervision. Another option would be to file a class action lawsuit in court. I received an email a long time ago from an attorney, Mike Millen of 119 Calle Marguerita #100, Los Gatos, California 95032, expressing interest in learning more about this situation (MikeMillen-at-aol.com). Mr. Millen might be able to provide you with some advice or assistance if you write to him.

SECOND ADDENDUM, DECEMBER 12: Attorney Mike Millen asks if anyone who suffered at the hands of EverBank lives in California. Please let me him, or me, know if you are. You can reach him at MikeMillen-at-aol.com, or me at hbader-at-cei.org. Thanks.