links for 2010-09-28

Iceland’s main interest rate was lowered on Friday to 6.25 per cent, while its ten-year debt is also trading around this level. Ireland’s cost of long-term, borrowing rose on Friday to 6.5 per cent. So Irish interest rates are now higher than Icelandic interest rates. Icelandic interest rates are now lower than Irish rates: just take that in for a second. The country that defaulted on debts, shut down its delinquent banks, burned the bondholders, allowed its currency to fall and did everything ‘wrong’, according to the Irish establishment now, is regarded by the financial markets as a safer bet than Ireland. Think about it. Iceland is a country where the residents refused to allow international bankers bleed the country dry and put the policy of making the people stump up for the banks to a referendum. Obviously, the people rejected the idea of paying foreign banks what the banks demanded.