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Michael Lewis on Iceland

2009-03-05 13:46:06.654624+00 by Dan Lyke 4 comments

Michael Lewis goes to Iceland to muse about their financial system's collapse. There were three things about this that caught my attention, two of which revolve around

Iceland instantly became the only nation on earth that Americans could point to and say, “Well, at least we didn’t do that.” In the end, Icelanders amassed debts amounting to 850 percent of their G.D.P. (The debt-drowned United States has reached just 350 percent.)

First: As the value of home prices falls back to the historical range, how far from 850% are we?

Second: He keeps an "aren't these Icelanders amusing?" stereotyping tone that allows us as readers to keep a bit of distance between their follies and our own. I'm not sure if he's being dense, or subtle.

Third: His comments on what makes fishing profitable got some more gears churning about capitalism.

[ related topics: Politics Economics ]

comments in ascending chronological order (reverse):

#Comment Re: made: 2009-03-05 16:15:57.764351+00 by: Mark A. Hershberger

first: I wonder where he gets the 350% and 850% number. What sort of debt are we talking about? The 350% number seems way off from everything else I've read.

second: subtle.

#Comment Re: made: 2009-03-05 16:56:50.586485+00 by: Dan Lyke

I'm having trouble nailing down the exact statistic, but those look a lot like private debt levels. Public debt for the U.S. is down around a tenth of that. Or was until the stimulus orgy started.

#Comment Re: made: 2009-03-05 17:16:21.645968+00 by: Dan Lyke [edit history]

#Comment Re: made: 2009-03-05 17:48:43.911659+00 by: Dan Lyke

This article talks a little bit about how public debt levels are actually fairly sustainable, but private debt levels have become huge.

And here's Henry Blodget looking at a Credit Suisse report that tries to explain why that 350% number is meaningless.