Economic Disaster Area » Bjorgolfur Thor

A Bad Dream?

Dadi — Fri, 03 Sep 2010 23:16:42 +0000

I have fallen ill lately, either some autumn flu or an allergy reaction due to Icelandic news.

It seems like Bjorgolfur Thor and Jon Asgeir Johannesson are going to be the two people who hold the reins in Icelandic business once the dust has settled. Their creditors including Landsbankinn and Arion seem to be competing for who can pay them more for writing off their debts (proving the old if you owe the bank a million then you are blah blah, if you owe the bank a billion the bank is blah blah).

The Independence Party is scoring highest in the polls (No, Icelanders do not understand cause and effect).

Ogmundur Jonasson is back in the government and Jon Bjarnason keeps his place (it pays to be a bully, ask David Oddson).

Tryggvi Thor Herbertsson and Gudlaugur Thor Thordarson are criticizing the government for covering up economic failures (although to be fair they should know a thing or two).

Thorgerdur Katrin Gunnarsdottir is back in Althingi (after a 900 million krona bullet loan mishap) .

Arni J. Sigfusson, the mayor of astronomically bankrupt and thoroughly corrupt Reykjanesbaer is begging for a bailout in the form of an aluminium smelter.

And the church is mending broken souls with a poster campaign (so both of its attendees can read about how abusing people is bad on the church’s wall…next to the toilet).

Is it 2007, 2003, 1983, 1528, a groundhog day or a bad dream?

The Blame Game

Dadi — Sat, 28 Aug 2010 11:56:40 +0000

Former Kaupthing chairman Sigurdur Einarsson who was wanted by Interpol earlier this year knows where to seek blame for the Icelandic banking collapse of 2008.

It was the government, the supervision authorities and Landsbankinn amongst others according to a big interview in Frettabladid today.

The governments of David Oddson and Geir Haarde also know who to blame.

The banks, their owners and management.

Bjorgolfur Thor has said that Jon Asgeir Johannesson is very much to blame. And in some cases the Geir Haarde government. And his own CEO’s.

Jon Asgeir Johannesson has blamed the governments of David Oddson and Geir Haarde and the supervisory authorities.

Jonas Fr. Jonsson of the Financial Authority blames the banks, their owners and management.

All of them are correct.

Wikipedia On Bjorgolfur Thor

Dadi — Tue, 17 Aug 2010 14:20:06 +0000

This Wikipedia site is quite curious since it presents Bjorgolfur Thor in a different light from what the Icelandic media is used to.

The question is, who is lining up to do business with this man today? Apart from the Icelandic state that is?

From Wikipedia

Bjorgolfur Thor’s Delusion

Dadi — Fri, 30 Jul 2010 10:20:48 +0000

If Ragnhildur Sverrisdottir is worth anything as a PR person then surely she must distinguish herself from Bjorgolfur Thor’s latest attempts at total self destruction of his reputation. Or maybe she is working for free and her advice worth every penny?

In an astonishing interview with VB.is Bjorgolfur comes across as a spoiled little child who’s been found with both hands in the cookie jar.

- Sigurjon Th. Arnason did everything. I tried my best but could not stop him -

- Baugur did something much worse than I -

And the best one of them all, “Anybody can buy a business if they just pay a high enough price”.

Pardon the bull but that is outrageously untrue of Iceland in the last decade where those who could buy businesses were people like Bjorgolfur, through “special relationships” with the Independence Party or the Centre Party.

Imagine the cheek of a man who was handed the nation’s oldest bank for change and a loan he still has not paid and left it for dead five years later. Meanwhile racking up investments in Iceland such as the drug company Actavis, the telephone company Nova, the investment bank Straumur etc. Using the clout he had with the Independence Party to purchase historic city properties for his own special use. His father and business partner so grossly going overboard that his personal bankruptcy was one of the largest in history.

Bjorgolfur was one of few businessmen who used their control of the Icelandic banks’ management to distort competition, prevent others from creating serious businesses and take out money by the truckloads to gain control over different industries. The Exista brothers did just that at Kaupthing, the Baugur family and the Wernerssons at Glitnir. And all was made possible by their “special relationships” with the Independence Party which accepted tens of billions in bribes (supposed donations) to look the other way. And in Bjorgolfur’s case even retaining the party’s chairman on the Landsbanki board.

In Iceland, and that is still true today as it was when Bjorgolfur was king… anybody can not buy a business by just paying a high enough price. You only have to be favourable to the government, or the resolution committees. Then you can really work some magic, but Bjorgolfur in his self-delusion probably prefers to think of it as business as usual.

The man may have a Range Rover and a yacht but he will find those hard to trade in for an ounce of character.

A Bad Day For Billionaires

Dadi — Thu, 11 Mar 2010 11:28:45 +0000

Bjorgolfur Thor is no longer on the Forbes billionaire list.

And Hannes Smarason of FL Group fame personal debts to Landsbankinn amount to half the IceSave amount owed to the Brits and the Dutch according to the latest calculations. Of course without proper collateral or what?

The IceSave Memorial: How We Got To Where We Are

Dadi — Wed, 06 Jan 2010 10:09:51 +0000

The idea of an IceSave memorial is a great one. So here is a homage to the people who got us IceSave.

As Prime Minister and Finance Minister, David Oddson and Geir Haarde privatized Landbankinn into the hands of Bjorgolfur Gudmundsson, who had no experience in banking but had served a sentence for his part in the bankruptcy of Hafskip and made a mint in post-communist Russia. Half of the purchasing fee was borrowed from Bunadarbankinn (which became Kaupthing) and never repaid. Landsbankinn returned the favour for their Progressive Party counterparts.

Bjorgolfur Gudmundsson and his son, Bjorgolfur Thor wasted no time and appointed a host of Independence Party members to key positions in the bank. They also used the bank as their own personal piggy bank, borrowing billions upon billions to acquire publishing houses, newspapers, pharmaceutical companies, telephone companies to name a few businesses. Landsbankinn’s loans to connected individuals were way above anything which could have been considered as normal in banking. Or imagine Fred Godwin borrowing billions from RBS to buy Penguin, The Telegraph, Vodafone etc.

The father and son retained Kjartan Gunnarsson as the chairman of the board. Meanwhile he was also the CEO of the Independence Party. It was a cosy relationship. A few days before the Independence Party government approved a new law limiting the amounts of grants political parties could accept, 25 million ISK found their way from the bank to the party. A big chunk but still just a part of the pie as MP Gudlaugur Thor Thordarson’s finances have revealed.

The man who approved the huge grant was former youth officer of the Independence Party and then CEO of Landsbankinn, Sigurjon Th. Arnason. A new employee at Landsbankinn in 2007 recounted how when he started working there, Sigurjon’s friend from the Independence Party and mid-level manager told him about the “real organization chart”, which showed how things really worked if you wanted to get ahead in the world of Landsbankinn’s type of international banking.

The other CEO, Halldor J. Kristjansson had been the assistant of Progressive Party minister who turned billionaire through the privatization of Bunadarbankinn into Kaupthing. When financing the risky model that Landsbankinn like the other Icelandic banks were running, the bank came up with IceSave.

Alistair Darling is the finance minister of the UK. The UK allowed Landsbankinn to prey on the savings of the Brits when it should have been clear that the Icelandic Central Bank had no way of acting as a lender of last resort.

But neither did his Dutch counterpart and the Dutch National Bank do their homework. They allowed Landsbankinn to move in on the Dutch when one simple look at the Central Bank of Iceland’s foreign reserves should have told them not to.

They should have stopped it because this guy wasn’t going to. Jonas Fr. Jonsson was the CEO of the Financial Authorities in Iceland and an Independence Party member. His job safety depended on not rocking any boats.

And guess who was by then calling the shots at the Central Bank of Iceland?

New chairman of the Independence Party, wasted no time in using IceSave for the political gain of his party. By screaming from the top of its lungs the party has managed to divert attention from its own role in the economic collapse of Iceland. No other issues have been able to hold the spotlight, such as the several times larger bankruptcy of the Icelandic Central Bank under the management of David Oddson, a review of the bank privatization process or the finances of the political parties.

Of course, distinguishing the Independence Party from IceSave is a hell of a task. Thorlindur Kjartansson and Erla Osk Asgeirsdottir ran for Althingi in 2008 as the young, shining stars of their party. They had just come off their jobs at Landsbankinn where they were supposed to do market research into which other countries Landsbankinn could launch IceSave. If they are next in line to succeed on the party’s behalf then surely a diversion tactic is needed to cast the blame for IceSave elsewhere.

The smoke and mirrors game also suited the old ally of the Independence Party, the Progressive Party under new leader Sigmundur David Gunnlaugsson who has cried wolf from the top of his lungs on the IceSave issue. The Progressive Party has a long history of chasing easy votes. It was not hard to convince a large part of the Icelandic nation that it might not have to honour its obligations.

So the InDefence group was formed. Behind the group which sort of promised Icelanders who signed their petition that they would not have to pay the IceSave debt is a nice little group of Progressive Party members, such as economist Magnus Arni Skulason who had to resign from the board of the Central Bank earlier this year for trying to assist wealthy parties in by-passing the currency restrictions in place in Iceland. A trustworthy and honest group if you ever saw one.

And the unloved lame-duck president bought the hype.

Finally we can only have ourselves to blame. For not being more alert to people who had grown so accustomed to running the country that they considered it a birthright. For not being more critical until after the crash. We were too busy keeping our jobs, TV’s and our cars safe that we forgot our basic rights and liberties. The Icelandic people allowed this to happen by becoming oblivious to criticism and celebrating cronyism. And for not wanting to learn from what has just happened.

Obviously the government of the Social Democrats and the Left Greens approved the IceSave agreement at the end of 2009. But it is sort of ridiculous and evil even to blame the cleaning crew for the mess left behind from the party.

Isn’t it?

Do Desperate Times Call For Desperate Bjorgolfur?

Dadi — Wed, 16 Dec 2009 20:51:12 +0000

Bjorgolfur Thor was handed Landsbankinn through privatization because he was supposed to have made a mint abroad and re-investing it in the Icelandic economy was seen as a positive move.

Landsbankinn’s bankruptcy within six years then turned out to be one of the biggest in history. Not just in Iceland but anywhere.

The bank’s IceSave legacy then ravaged the country, dividing it even further.

Both the bankruptcy and IceSave will cost the nation dearly for years, even decades to come.

The risk Bjorgolfur took with the bank wasn’t his own. The consequences are left with the present and future taxpayers of Iceland.

It then turned out that he did not even originally invest his own money in Landsbankinn. He borrowed half the price from the other bank to be privatized, Bunadarbankinn(later Kaupthing), whose new owners in turned borrowed the money to buy that bank from Landsbankinn.

Katrin Juliusdottir, minister of industry still thinks Bjorgolfur’s investment vehicle Novator is a suitable partner in Verne Holdings which has plans to build a data warehouse in Iceland in the next few years, an investment of $700 million.

The project as such is a wonderful one. It provides a different type of industry to tap into the Icelandic energy resources, and everyone knows foreign investment is needed.

But is it impossible for Iceland to attract foreign investment which isn’t tainted by the people who did this. Are our energy resources not attractive enough without these people being attached?

And what does the public which has seen its taxes raised, its purchasing power drop and its loans rise because of the collapse of the banks think about this venture being granted special tax breaks and incentives by the state?

On Kastljos tonight, Katrin Juliusdottir made it clear that the money involved is crucial to Iceland’s economy right now. She is probably right. But the message is a gruelling one. Iceland is so desperate that it is willing to sacrifice any morals it still has and sacrifice its self-respect for all the money it can get.

A grim message from the government.

This Is The New Old Iceland

Dadi — Thu, 01 Oct 2009 10:21:31 +0000

Morgunbladid today points out that one year from the economic collapse, Iceland’s most notorious businessmen still hold on to their companies.

Jon Asgeir Johanesson – Hagar (Hagkaup, 10-11,Bonus) / 365 Media (Channel 2, Frettabladid)

Karl & Steingrimur Wernersson – Lyf & Heilsa Drugstores

Agust & Lydur Gudmundsson – Exista (VIS, Lysing, Siminn, Oryggismidstodin) / Bakkavor

Palmi Haraldsson – Iceland Express

Strangely…or not so strangely considering who is Morgunbladid’s editor in chief, Bjorgolfur Thor is not mentioned. That eraser sure must be working.

He owns Nova, CCP, Verne Holdings, Novator

Bjorgolfur Thor Taking The Biggest Piss

Dadi — Tue, 01 Sep 2009 10:03:06 +0000

The owner of nightclub Sodoma Reykjavik got warranted attention when he placed photos of prominent bankers and businessmen in the urinals at his club.

Now he reveals in an interview with Sodoma Reykjavik that Bjorgolfur Thor is taking the most (considerably moist) heat.

Go here if you want to take the piss.

Bjorgolfur’s Red Hummer

Dadi — Tue, 25 Aug 2009 13:32:03 +0000

It is not nice to cause damage to other people and their belongings. So Bjorgolfur Thor should be ashamed of himself for IceSave, Landsbankinn and the way he’s conducted his business in Iceland. Related posts:Bjorgolfur & Bjorgolfur Thor Personally Responsible For Billions Do Desperate Times Call For Desperate Bjorgolfur? Bjorgolfur and Son Ignite Civil War Related posts: