Meltdown Iceland: Lessons on the World Financial Crisis from a Small Bankrupt Island

by Roger Boyes

The compelling and authoritative story of the financial destruction of Iceland―a saga that mirrors, in microcosm, the forces that caused the global economic crisis.

The economic crisis that emerged in America in 2008 unleashed a veritable epidemic of ill health around the world. However it was Iceland, whose population of three hundred thousand had the world's highest GDP per capita and counted itself the happiest of countries, that caught the worst cold. It has nearly killed them.

No story from the economic crisis of 2008 is more evocative than I celand's. The names may be unfamiliar―Johanesson, Bjoergolfsson, Oddsson―but their exuberance, greed, and miscalculation have many counterparts on our shores. And however traumatic the collapse of individual companies may be in the United States, in Iceland's case an entire country melted down. All the wealth accumulated in the previous decade―during which a new breed of Icelanders had dared to believe they could compete economically on an international level, during which Reykjavik became the Capital of Cool―disappeared practically overnight. Iceland's story shows how closely the world economy is The default on subprime mortgages in the U .S. led to the collapse of Lehman Brothers, which led directly to the run on Iceland's banks, which forced local authorities in Britain to switch off the heating in their classrooms.

With panache and color, Roger Boyes tells the inside story of the bankrupting of I how it happened, the human dramas―from politicians to financiers to fishermen―that continue to swirl around it, and the lessons we can not ignore. Published on the first anniversary of its collapse, Meltdown Iceland is a cautionary tale for our times, an authoritative and compelling account of the financial destruction of a tiny country whose saga should resonate for us all.

Genres: Nonfiction, Economics, History, Finance

256 pages, Hardcover

First published September 29, 2009

Reviews

[Will · Rating 4 out of 5]

Update: If you are looking at the trial in Iceland of the Prime Minister this book is a must read. In simple complex terms you will understand the trial, the players, and the dynamics. The trial should be the most watched of the year in the world. It is the first (and probably only) time a national leader will be put on trial for the global economic collapse of the last four years.


Before Greece and the rest of the economic PIIGS (Portgual,Ireland, Italy, Greece, and Spain) countries on the verge of economic meltdown there was Iceland. A country that partied and spent until it realized the party was over and there was a bill to pay... a bill to the extent of $1.2 million per person!

Iceland was the beginning of the global meltdown, and started the difficult road to recovery long before there were riots in the streets of Athens. This book explains how things got so good and got so bad in a hurry.

This book does a well researched and fantastic explanation into the meltdown. However if you are looking for a little light reading, this is not it. I have both a background in econ and have been to Iceland and both of those helped tremendously with the understanding of this book. If you haven't been and are only a casual financial observer I think you will still enjoy the social exploration of the country's demise.

Boyes did a great job with this book and filled in so many of the gaps and answered the deeper questions I had about the krona collapse.

[Arnar Óskarsson · Rating 3 out of 5]

A compelling account of the 2008 crash that wiped out the Icelandic economy. The author has a good understanding of the causes.

[Jim · Rating 3 out of 5]

Capitalism is a rather strange animal. In our times, at least, it seems to shun introspection and just roll the dice. That happened in the United States, with the proliferation of financial instruments that were imperfectly understood and, apparently, based on nothing but a combination of arrant egomania and butterfly wings.

Meltdown Iceland: Lessons on the World Financial Crisis from a Small Bankrupt Island is one of those journalistic books that is a good summary of what happened -- after the fact -- but without the contribution of the politicians and oligarchs who caused the whole mess. They, of course, have no particular insights but the desire to maintain as much of their ill-gotten gains as possible through the bad times to follow. Roger Boyes has produced a book of some interest and some moderate insight. But I ask, how long will it take before there is another bubble comparable to Iceland's banking bubble or the real estate bubble in the U.S.? A few years, perhaps? You can be sure that, when it happens, the next batch of politico-oligarchs will, of course, think that, for them, everything will be golden and unerringly lucky. The dice will roll again ... and again ... and again.

My favorite quote comes from the Icelandic novelist Einar Mar Gundmundsson:

A cannibal is flying in first class. The flight attendant brings a menu with several options. The cannibal is quite polite, as cannibals often are upon first impression. The cannibal scans the menu and then says to the flight attendant, 'I don't see anything appetizing on the menu. Would you be a dear and fetch me the passenger list?'

The comparison is apt: Those who have attained the height of political or economic power are not the most caring of people. (Why otherwise would they like reading Ayn Rand?).

[Kris · Rating 4 out of 5]

I'm not really much of a finance-wonk, but I was interested in this book because I visited Iceland the day the people threw out all the politicians who caused the nation's financial collapse and elected a whole new administration. And, knowing some Icelanders personally, I was interested to read what an "outsider" thought of the whole fiasco. (I also enjoyed references to places in Iceland that I've seen)

I was a bit worried that this book would be full of all kinds of boring financial stuff, but it was really interesting. The author really got into the *people* behind the collapse - what motivated them, what went wrong, etc. It really was fascinating - kind of like a soap opera! (Sadly, the results of the collapse were no fantasy...)

The author makes the point that seeing what happened in a small country (total population is just over 300,000) makes it easier to grasp what went wrong world-wide. And I have to say that I have a much better understanding of what caused the global financial collapse after reading this.

The book was short, and very easy to read - not dull or boring, which was a relief! Certainly, it's a niche market book, but anyone who is interested in understanding what happened, without having to wade through pages of graphs & numbers would get a lot out of this book. Plus you really get to understand the Icelandic psyche! So, I quite enjoyed it!

[John Carter McKnight · Rating 5 out of 5]

Outstanding, readable, thematically strong and nuanced account of the Icelandic boom and bust by a veteran correspondent with the Financial Times.

Boyes makes a strong case for the Icelandic chapter of the global crash being metaphor, microcosm and case study, but goes beyond that to point tantalizingly at a separate set of issues around the role of small states, cultures and enterprises in a network-scaled, globalized world: "they're screwed" is his basic conclusion.

Lower ratings on Goodreads seem to come from people with either very high or very low economic literacy: I found it just right.

[Mike Sanders · Rating 2 out of 5]

Most of the book was mere biography of a 101 characters - outside a very few, most didn't matter as much to the economic narrative of the story, and for a book meant to talk about the economics of the situation, that was only really in the last quarter of the book - which was good on its own, but lacking in comparison to the detail in the rest of the book. The stories are still compelling and useful, just not what is advertised.

[Helen · Rating 4 out of 5]

Very interesting take on the background to the financial crisis of 2008 (although as the book was published in 2009, it was quite soon after the events so lacks the perspective which a bit more time would give). This book goes into quite a lot of detail about the personalities and relationships in the Icelandic political and financial scene. It's about Iceland, but it is also about the rest of the Western world (Iceland is small and the problems therefore seem magnified in a small society, but there are parallels with what was going on elsewhere. I am now a bit better informed as to why so much of the British high street ended up in the hands of a very few Icelanders. The historical background helps to explain the post-crash hostility to Britain and the over-sensitivity to criticism which led to various early warnings being ignored (it doesn't really explain why so many British institutions went along with it, as the warnings were there, but it was, as he says, "bubble" behaviour). I also like the way Icelandic myth, literature, and geography occasionally make an appearance to explain financial practices. The long hand of Margaret Thatcher seems to have stretched a long way north, surprisingly (were foreign nations really so taken in by her shallow ideas?) Lots of lessons here for the UK, and for Iceland too if it is ready to accept them. It would be interesting to have an update four years on.

[Teresa · Rating 4 out of 5]

Wohoo! I won a copy of this from the Goodreads Giveaways section (thanks for telling about that, Emily). Granted, I entered the giveaway for this book more for Ryan than for me--he'll be thrilled--but I'll flip through it too.
*******
Premise of the book, from the preface: "I want to show the human narrative to this international meltdown, that we--Icelanders and non-Icelanders alike--are not just powerless victims caught in the spokes of the vast machinery of capitalism." Boyes presents Iceland as a small-scale, understandable example of what has happened in the worldwide financial crisis.

I expected a really boring textbook read, but this is surprisingly well written. I guess I shouldn't say "surprisingly"--according to the back of the book, Roger Boyes has reported for the Financial Times and Times of London for 30 years. Still, I thought he did a great job of pulling in historical tidbits to explain the country's mentality, and using non-economic stories to explain what was happening in the financial sector.

[Holly · Rating 3 out of 5]

A very informative book but not an easy read. This one took me a very long time to finish mostly because it contains so many facts, figures, and dates. I will probably need to read it again sometime to help myself digest all of the information.

One thing that impressed me was how, at least for me, it can be easy to get lost in the enormity of our current economic crisis. A trillion or even a billion dollars means very little in real terms to most. This book focuses on Iceland, with a much smaller economy, and puts the perspective on a smaller scale which helps the reader make more sense of it all. Additionally, it is a stark reminder of how much the global economy relies on sane and responsible practices of all countries, and particularly a large one such as the United States, to keep the world from falling off a financial cliff.

[Monical · Rating 2 out of 5]

Written by a writer for financial news, this is an interesting retrospective on the failure of Iceland's banks in 2008. Why do we hear the same story over and over? The government privatizes resources and removes oversight, a small group of oligarchs snap them up to serve their own purposes, and then go international to swindle as many (small) people as possible. I need to do some research on what has happened since, but yet another cautionary tale on the manipulation of the market and resources by a few powerful rich people. Guest starring Dick Fuld!

[Jake Bernstein · Rating 5 out of 5]

Terrific book on the Icelandic financial collapse! Having now visited Iceland and reported on its financial and political doings, I am even more impressed with this book by Roger Boyes. For anyone wanting to understand the Icelandic financial collapse, this is a great place to start. Boyes breaks it down in a way that is both clear and entertaining.

Jake Bernstein
Journalist, Author
Author of “Secrecy World: Inside the Panama Papers Investigation of Illicit Money Networks and the Global Elite” http://amzn.to/2hVuohf

[Halldór Thorgeirsson · Rating 4 out of 5]

One of the strengths of this book is that the author takes a broad perspective of what lead to the drama, what the causes were and how it relates to what was going on in the financial world more broadly at the time. A rather sad reading for someone from that island.

[Steven H · Rating 5 out of 5]

ICELAND'S FISCAL CRISIS CAN BE APPLIED TO OUR OWN

Roger Boyes is a correspondent with the Financial Times and the Times of London. He wrote in the Preface to this 2009 book, "This book charts Iceland's progress from the years of poverty, through to the good years, the manic years, and on to the ... 'crisis.' ... In telling this story I want to do more than sympathize with the Icelanders. I want to show the human narrative to this international meltdown, and demonstrate that we... are not just powerless victims caught in the spokes of the vast machinery of capitalism. [The book] tries to bring the crisis down to scale." (Pg. ix-x)

He states early on, "The crisis in Iceland then presents a micro-version of the crisis facing the rest of the capitalist world as it stumbles through the worst financial meltdown since the Great Depression... [Iceland's] size actually makes it easier to understand some of the forces that are upsetting the planet." (Pg. 7) He suggests, "the roots of Iceland's crisis... run deeper, in the imperfect privatization waves, the era of Reaganomics and of Thatcherite dismantling of the nanny state. The transfer of state assets into private hands was seen as a liberating moment..." (Pg. 29)

He observes, "crucially, no one was paying attention: not the government, not parliament, not the press, and not the financial supervisory authority. What followed was a fast shuffling of the cards---a technique that was to become the trademark of the Icelandic tycoons as they amassed their paper fortunes." (Pg. 68) For the Icelandic banks, "Debt was no longer a problem in need of a solution, but part of the universal alchemy." (Pg. 88) He adds, "Both debtors and creditors believed in an Iceland that could never exist, a society that could talk its way out of poverty into prosperity, not in a generation but in a decade. Was that a ridiculous dream? Yes, it was." (Pg. 93)

He argues, "It therefore bordered on the hypocritical to attack Iceland's rules for concentrating power and shortchanging its citizens and depositors: a similar process was under way across the globe... Iceland was... merely a concentrated form of the power structures that were in operation elsewhere." (Pg. 189) He concludes, "in the modern postwar world the capitalism of the small saver ... was undermined by the rise of consumer fetishism, the urgency of purchase artificially stimulated by the media, advertising, and indeed the banking industry." (Pg. 210)

This is a fascinating and very insightful portrait of Iceland's fiscal crisis.

[Colin · Rating 2 out of 5]

There's not much written about the financial meltdown in Iceland in 2008. Beggars can't be choosers I guess. However, I remember it was a cataclysmic event, with an enormous centrifugal force on other countries, including the UK, Germany and Netherlands. Even so, this book spends too much time on the luminaries and personalities of the oligarchs blamed for the crisis. There is a distinct absence of how the financial meltdown impacted average Icelanders. We do learn of the many in the UK who lost everything, but the financial and market forces that caused these losses remain opaque in this book. I did not even learn much about Iceland either. Meh.

[lara phillips · Rating 3 out of 5]

a mostly accessible (though a little dry) story of how Iceland's banks collapsed in 2008. I'd almost preferred the author waited a year to publish so there'd have been more follow-up information, but what's here is very good. Only error I found was that the author stated the big concert hall Harpa would never be completed, which, against most odds, it was (in 2011).

[Anthony · Rating 4 out of 5]

A very good look at the reasons behind the Icelandic economic collapse and the effects it had on Great Britain and other countries. A little easier to read than Why Iceland by Asgeir Jonsson, but not quite as detailed in the banking sense.

[E · Rating 5 out of 5]

Fast-paced tale of how Iceland’s economy melted

Most people aren’t very familiar with Iceland, an isolated, homogenous, near-Arctic island. Now, thanks to Roger Boyes’s wonderfully told tale of its financial collapse, readers can learn what happened to the economy, politics and culture of this unusual, mostly-frozen nation. Iceland was the unlikely first victim of the 2008 global financial collapse – the actual canary in the coal mine. Its financial excesses, cronyism and poor governance serve as a microcosm of the problems facing the largest capitalist nations. Boyes’s financial case study flows like a novel. He is unafraid to draw biting conclusions from his detailed presentation: here, villains are villains, greed is greed, names are named. This fast-moving story puts the global fiscal meltdown into perspective. getAbstract rates this as important reading for anyone who seeks insight into the 2008-2009 international economic crisis, which began in this lone, cold outpost and then burst into global flames.

To learn more about this book, check out the following link: http://www.getabstract.com/summary/12...

[Mie · Rating 4 out of 5]

I won this book from the Goodreads giveaway and I am so sorry that it took me so long to finish.
I'm not a finance-guru at all, but I was interested in this book because of my Nordic relations. The book was filled with humor and interviews from people with all backgrounds and from other contries. It gave me a deeper understanding about what went wrong and how fast it can happen when you have incompetent people running the show. I thought it was funny with the difference in male and female risk-taking, a high level of testostorone tended to make profits throughout the day, but were prone to impulsive and exhibitionist behavior and could turn into a form of addiction. The Icelandic approach to dealing with the crisis, lets get the women in to clean up after the party! Seems like a mix of men and women in boardrooms would give the perfect ballance.

[Philip · Rating 3 out of 5]

Full disclosure: I received a free advance reading copy from uncorrected proofs. It contained dozens of typos, awkward constructions, usage errors and errant marks that will assuredly be corrected before publication, so they do not factor in my rating. The topic is timely and important, and the hubris and political corruption that fed the crisis are certainly not isolated to Iceland. The author does a good job of explaining Icelandic society, as well as the culture of corruption, incompetence, greed, and denial that led this society off the proverbial cliff, but I wish the prose had been a little more readable and the parallels to the U.S. recession had been more clearly detailed.

[Peter Hiller · Rating 3 out of 5]

I thought this book was interesting in how it described details of iceland that I simply was never aware of, or were ever explained in media coverage.

Iceland quite simply was a corrupt plutocracy that things slowly ticked over in until people mistook their success in dealing with a small controlled economy with economic control outside. At least this was the way that I felt that the author was trying to get across.

I found the book to be somewhat disjointed, jumping from topic to topic and having too many asides right in the middle of when it should be going by chronology. It would go chronology, jump away and then go back. Overall it was somewhat weak, but still interesting.

[Leigh · Rating 4 out of 5]

Probably will be of most interest to people who have a connection to Iceland, even if that is a tourist trip there. I just listened to audio version after I returned from Iceland and wished I had listened before I took my trip, as would have given me great context. Definitely a must for anyone who is traveling to Iceland and who wants to have some economic understanding of the country, which has actually been brought back from the brink in large part by the increase in tourist visits from people like me!

[Wulfgar's Papa · Rating 3 out of 5]

I received this awhile ago from Goodreads giveaway. Finally got around to reading it.

It's not the easiest book to read as it describes all the players and the family links in the collapse of Iceland. If a small country like Iceland is such a tangled web then I imagine the US financial system is 1000 times bigger and 100 times as tangled. America's time will come, there is a limit to the world's faith in the almighty dollar and the power of the FED to control it.

End the FED!

[Timothy · Rating 3 out of 5]

I thought I was about as interested as an ordinary by-stander could be in the Icelandic collapse and consequences. However I guess I'm not as interested as I thought I was...

A comprehensive review of the rise and fall of the Icelandic oligarchs and the rollercoaster ride they put their country on. Quite breathess, chatty prose, betraying the author's journalistic leanings, but it does what it says on the tin.

[Aiden · Rating 3 out of 5]

So far this book's interesting. I loved the quick bit in the beginning about the world effects of the volcanic explosion in the late 1700's. Meltdown Iceland feels good in my hands; the paper and binding are great for the size. The writing style is easy to read.

[Susan · Rating 2 out of 5]

Won this on Goodreads, so I feel kind of bad I didn't finish it.
I read a few chapters and while I enjoyed adding to my near
non-existent knowledge of Iceland, I needed the financial info
to be fed to me on a more remedial basis.

[Christy Stewart · Rating 3 out of 5]

The book is an eye-opening approach to the current talking points of cable news. It's informative, interesting, and a bit scary.

[Stacey · Rating 2 out of 5]

Some interesting information to be had in this book, but hidden away in very drawn out text.

[Nell Chitty · Rating 4 out of 5]

Dramatic read with personal stories and re-accounts of historical events written in a very entertaining and easy to read manner. This is a great book for the commuter.

[Snail in Danger (Sid) Nicolaides]

I won this in a giveaway here on Goodreads.