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Originally Posted by abaya
The Icelandic kronur was 65 to the dollar when we got here last year, and went down as low as 58 to the dollar in the last 6 months. On Friday, it was up to 70 to the dollar, and I cashed some American checks, pretty happy with myself... figured it would drop back down soon enough, given the relative instability of this country's currency.
Today, it's up to 75 and doesn't appear to be stopping anytime soon.
I don't know all of what's going on Stateside, but the fact that the little Icelandic kronur has dropped over 5% in value overnight does make me more than a little concerned. I know it's been the same in several markets, but the changes have been more around 3-4%. It's definitely global.
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That's interesting. In Iceland it's up to 75? I'm showing it at 61 and some change.
http://www.x-rates.com/d/ISK/USD/graph120.html
I'm in no way questioning what you're seeing, I just think it's odd the difference would be so great.
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Originally Posted by james t kirk
While I would agree that it is affecting the globe, it is a Made in America problem.
The whold sub prime mortgage fiasco was born and raised in the USA.
Things were too quiet in the mortgage industry. There was no large growth, no big action, no excitement.
How do you create growth in a fully mature industry?
Well, you make lots of loans to people who really can't afford to have a mortgage. Suddenly, you are issuing lots of mortgages and growth is up. Way up.
Then you sell the debt and you walk away with shit loads of money and make the debt someone else's problem.
Who's problem you ask.
Well, obviously Bear Stearns for one. They bought up shit loads of debt without doing their due diligence. So much for all those MBA's now.
You don't hear of such bullshit here in Canada, or in Europe. Our banking system is much more regulated and they don't run around throwing money at people who have no way of repaying it.
Canada does not have a sub prime mortgage problem, but we're going to feel the impacts of the one that's happening down south.
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I think the TSX took a much larger hit today then the Dow. Hell, the last I looked the Dow was up a little.
The world has been dollar based for a long time. Now many places that used to prefer payment in US dollars are quickly shifting to the Euro. I know down here south of the border store fronts that used to advertise they accept US dollars are quickly taking down those signs. I'm on the gulf coast but I know over on the Mayan coast, Cancun et el, the signs of "Euros accepted" are replacing "Dollars accepted."
As the dollar drops it's likely to help some in the short term but be harmful to most in the long run, IMO.