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by Rob Horning

19 Nov 2008

Paul Kedrosky linked to this FT article describing life in Iceland after their banking system completely collapsed. The whole thing makes for some unsettling reading, unless you hate Sigur Ros or something and can extract some schadenfreude from the whole situation.

The Icelandic krona’s freeze in the capital markets had now spilled over into the day-to-day transactions of Icelanders abroad. Holidaymakers and business travellers venturing “til Útlanda”, as it is called, found their credit cards refused, and those wishing to buy foreign currency could not find willing sellers, aside from one or two who limited their purchases to €200.
Trust in the banks had evaporated and people were trying to find a safe haven for their cash. One man had waited for six hours in a bank while his life savings, more than £1m in kronur (at IKr200 to the pound), were counted out in cash in front of him. “I feel like an innocent man dragged from his bed, put in a barrel and hurled over Gullfoss!” wrote one journalist that morning.

This is why people used to stuff money into mattresses.

Naturally, Iceland (just like the U.S.) had an irresponsible housing boom alongside its overleveraged banking system.

Easy access to 100 per cent mortgages has seen a change to the traditional pattern of young Icelanders living with their parents until their mid-twenties. The suburbs of Reykjavik have grown by a third in the past decade, most of it housing for first-time buyers. Whole new neighbourhoods have emerged. New streets house young couples, many with children, most with two cars in the drive and furnished with the best that Ikea can provide. All bought with 100 per cent loans, many in foreign currencies.

Also mentioned are the “viking raiders”—brash Icelandic bankers like Jon Ásgeir who have now destroyed their nation.

One of the most telling images was the departure of Jon Ásgeir’s private jet on news that the government had nationalised Glitnir Bank (in which his investment vehicle Stodir was a leading shareholder), wiping out his shareholding and rattling the debt-burdened house of cards that is his Baugur business empire. Painted black and as sleek as a Stealth bomber, the aircraft was photographed taxiing from its hangar by Morgunbladid, a daily newspaper. Like the last helicopter out of Saigon, the departure of Ásgeir’s jet symbolised the end of an era, the last act of Iceland’s debt-fuelled spending spree.

An article from Spiegel also explores what happens when nations go bankrupt. It highlights Argentina’s experience, when people scurried to Uruguay with suitcases full of dollar bills and others slept in front of ATMs waiting for a chance to withdrawal money, if any was left. And it looks at Hungary, the first European nation to be bailed out by the IMF.

Much of the blame for Hungary’s current debacle lies with the failings of the past. The once-successful nation of 10 million people lived beyond its means for years. With government finances spinning out of control, the national debt ballooned to two-thirds of the country’s GDP. “The funding for our excessively high standard of living came from other countries,” admits András Simor, the governor of the central bank, not without a dose of self-criticism.
The Hungarians have always been considered shopaholics. Hundreds of thousands bought themselves big cars and went on shopping sprees in the chic boutiques on Váci Utca in Budapest—all on credit. The real estate market boomed, turning close to 90 percent of Hungarian apartments are privately owned.

This all sounds very familiar. How long will it be before we have to say, “We are all Hungarians now”?

by PopMatters Staff

19 Nov 2008

Check out the PopMatters tribute to the 40th anniversary of the White Album. Side Two songs highlighted below posted today.

Side Two


Andie Forgie from the recreation of the White Album at Abbey Road on the River 2008
Martha My Dear [Video]

 

Kasabian
I’m So Tired [Video]

 

Bobby McFerrin
Blackbird [Video]

 

Carly Simon
Blackbird [Video]

 

The BeaTrips (Japanese Beatles cover band)
Piggies [Video]

 

Andy Fairweather Low
Rocky Raccoon [Video]

 

Phish
Rocky Raccoon, Don’t Pass Me By [Video]

 

Grateful Dead
Why Don’t We Do It in the Road? [Video]

 

Of Montreal
I Will [Video]

 

Ari Hest
Julia [Video]

 

by Rob Horning

18 Nov 2008

One of my favorite features of the Financial Times are the special sections devoted to relatively obscure regions that assess the politics and investment possibilities. Today’s edition included a four-page section on Belarus, home to Europe’s last dictator, Alexander Lukashenko. Yes, you can learn a great deal about the city of Grodno, and Belarus’s dependence on Russia’s gas, and its thriving tractor-building industry. But the only must-read is this interview with Lukashenko, in which he proudly, if ironically, seizes the “last dictator” mantle.

You are so lucky to have a chance to talk to the last dictator of Europe. You could only dream of meeting with the last dictator of Europe and see what kind of dictator he is. Touch him, sit at the same table with him. You only read this in books, but now you’ve seen it for real.

It’s probably a stereotype I’ve absorbed from 1980s Cold War films, but this is exactly how I expect Eastern European dictators to sound, contemptuous of Western journalists to the point of mocking them to their faces. (It makes me want to reread the New Yorker article about the mad dictator Saparmurat Niyazov of Turkmenistan, the self-styled “father of all Turkmen,” or this classic about chess-loving dictator Kirsan Ilyumzhinov of Kalmykia.) Lukashenko dismisses his political opponents (“if they come to power they wouldn’t know what to do ... They feel good being eternal oppositionists”) and declares Belarusian elections “transparent without precedent” before dispensing this brilliant piece of parenting advice.

It is very important for a father to teach his son a real man’s life. And when [my youngest son] Kolya turned one year old, I took him by the hand and brought him to a steam room. Of course he complained and ran out. But now he is four years old, he can endure temperature differences from 100 degrees [Fahrenheit] in the steam room to 28 degrees in the swimming pool. Plus he endures ice baths. I taught my [two] elder sons to do that. We would cut a hole in ice on the river, dive into it, and then run along through the snow to the steam room.

No wonder my adult life has seemed so inauthentic and unreal—it’s been distinctly lacking in drastic temperature swings and ice baths.

by Rob Horning

18 Nov 2008

In this LRB essay, Slavoj Žižek ponders the significance of Obama’s election. While it seems to represent a temporary triumph over political cynicism—“what the cynics don’t see is their own naivety, the naivety of their cynical wisdom which ignores the power of illusions”—does it also imply some sort of decisive break in historical continuity? Has Obama introduced a whole new game rather than merely adjusting the rules of the existing politics? (See Larval Subjects’ thoughts on that here.) As the transition has been assembled, we’ve seen some of the same Washington power players from the Clinton era shuffled back into prominence, which has led to articles (like this one) pronouncing that nothing’s really changed. This allows some pundits to dismiss the outpouring of emotion when Obama won as overdramatic self-congratulation by liberals who will deserve to be disappointed by politics as usual. (Update: See leftist philosopher Simon Critchley’s view here.)

Of course, politics will largely remain the same—various interests will continue to compete for priority and so on. This is a good thing; dreams of post-partisanship are misguided in presuming some underlying consensus among peopple with irreconcilable differences. Žižek makes this point in an aside: when the financial crisis led to bipartisan action, what that meant in effect was “that democratic procedures were de facto suspended.”

But it’s hard to look at something like this, the first of what promises to be a weekly YouTube chat from Obama, on a government website that is almost unprecedented in its user-friendly slickness, and not feel that something is fundamentally different about this administration. That difference—a comfort with new media and the opportunities that stem from it—seems irreversible. (I’m sure this has already been called Politics 2.0 somewhere.) I have to admit that it’s a little sinister and Big Brotherly in feel, and I am still cynical enough to suspect these traits will help make it go over well with the general public.

What Obama’s team seems to want to do is establish Obama as an untarnishable brand, anchored in images of youth and progress (hence YouTube), that can then be used to win approval for policies without having to convince people of their merits. Participating in politics tends to make people uncomfortable, and few people do it at any level beyond voting. It involves compromise and confrontation and a willingness to be reminded again and again that reality falls short of ideals. But people love participating in brands—no compromise necessary there, as the engagement takes place on the fantasy level and consists of pure vicarious pleasure. If we become invested in brand Obama, we will end up absorbing the progressive ideology he may espouse as a kind of by-product. And this can then inform the polls that inform political decisionmaking by legislators. Maybe this is nothing new; this is the “bully pulpit” theory of executive leadership. We just have been without a credible leader for so long in the U.S. that’s it is hard to remember what that is like.

by Vince Carducci

17 Nov 2008

The Beatles is called ‘the White Album’, of course, because of its cover, which is completely devoid of imagery save for the group’s name blind-embossed on its face slightly off-center and askew, and a few discreet bits of type printed in barely visible light gray on the spine and front and back panels. In the shimmering muteness of its glossy blank surface, The Beatles announces the end of the psychedelic era, the obsolescence of floridity and pretension typified ironically enough by the band’s previous opus, Sgt Pepper’s Lonely Hearts Club Band. Like a Trojan horse virus, the seeming ineffability of The Beatles’ exterior masks the flowers of evil contained in songs that would dissolve the saccharine melodies of the Summer of Love and provide the helter-skelter soundtrack for the Manson murders and Watergate paranoia to come.

//Mixed media
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A Chat with José González at Newport Folk Festival

// Notes from the Road

"José González's sets during Newport Folk Festival weren't on his birthday (that is today) but each looked to be a special intimate performance.

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