Global Market Commentary, Analysis and Investments
Yesterday, McKinsey released a new report showing that the combined public and private debt in the UK is now 449 Percent of GDP. It’s actually the biggest debt to GDP jump of any western nation over the span of the past ten years.
Given that recently-imploded Dubai World is still top of mind, and the Iceland meltdown was really not so long ago, it must make a mighty bitter pill for them to swallow.
[Read more...]Throughout the financial crisis we’ve witnessed governments stepping in to backstop and rescue failing corporations with loans and bailouts… now imagine the reverse. For the first time, judging by the cost of insuring against a debt default, “the market has started to price in a bigger probability of default among industrialised countries than among investment grade companies.”
[Read more...]In 2008, when the Icelandic economy imploded and Landsbanki’s Icesave division went under, the UK and the Netherlands rode to the rescue of their own citizens caught up in the collapse by reimbursing their lost deposits. The Icelandic deposit insurance fund had promised to make EU account holders whole in the event of a bank failure… but it didn’t. Hence the British and Dutch insistence that Iceland now pay up.
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Iceland’s Government on Verge of Collapse, Again
Today, Iceland announced it will start its referendum on January 28th to determine whether or not it will pay back its lenders, the UK and The Netherlands. The vote will be finalized on March 6th. Iceland’s already been considering how to potentially ditch its British and Dutch debts for some time. As we described earlier this month:
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