When the 300 Spartans stood at Thermopylae they were able to hold off the entire Persian army for days because they had their backs to a narrow mountain pass. The only way that their enemies could pass was through that narrow corridor and, as such, the few could hold off the many. In Russia Putin & co. are using the same technique to stabilize their stock markets: creating a liquidity valve that they can control –in this case by turning off the stock market. The Icelandic government’s attempt to hold the line at 131 vs. the Euro by contrast was the tactical equivalent of Custer’s debacle at the Little Big Horn, a small misguided and outnumbered force surrounded on all sides.
The line has collapsed and the Krona is rapidly losing any value. Here are some of this week’s highlights:
• Iceland's government has given up attempts to bolster Glitnir Bank. It is now in receivership.
• UK PM is threatening legal action if the 300,000 accounts of UK citizens in Icesave, an online subsidiary of a failed Icelandic institution (lots of UK residents opened online accounts with Icelandic banks to get the super high interest rates -whoops) were not granted in the same manner as domestic deposits.
Conflicting reports regarding the proposed Russian Government in the media suggest that it is a far from done deal.