Greed And Stupidity Are Winning

So Iceland's President has twice vetoed a Bill to pay for the compensation given to those who were suckered by the lure of premium savings rates. Neither Iceland nor its banks could even cover savers' principal, let alone pay interest at premium rates. But that's okay, UK and Dutch taxpayers have picked up the tab.

Similarly, bearing in mind the Irish financial crisis, it comes as a shock that Allied Irish Bank sold Californian towns letters of credit to guarantee their municipal bond issues. It's a sad fact that two thirds of investors in US municipal bonds are individuals unwittingly taking advantage of tax breaks.

Meanwhile, the tide is also going out on sub-prime student bonds and the scale of mortgage debt misselling continues to grow. So it's little wonder the the US public borrowing ceiling keeps on rising as all these woes drag on the nation's finances.

But at least the global investment banks are profitable again, right? And no one's going to jail. It seems that even the banks downunder are mixing their own special debt cocktail, and the next round is on the Aussie taxpayer.

Greed and stupidity are winning, hands down.

Image from Financial Sense.