The gov’t of Iceland wasn’t smart. It just couldn’t afford to bail out its banks, so they failed and foreign creditors including the UK and the Netherlands got badly burned, to the tune of $6 billion. While Iceland has suffered, their economic performance has been fabulous compared to Greece, Ireland or Portugal. The lesson, bailing out investors can kill your economy.
Tag Archives: investors
Bifurcation
The key reason investors believe the economy is improving is because the surveys; the ISMs, consumer confidence and regional Fed polls of manufacturing sentiment have been strong. Auto and chain store sales were also decent. But other data reports like industrial production, single-family starts, real consumer spending, core capex orders and shipments and construction spending were all down. Think bifurcation.