I remarked early in the year how Iceland could very well be the modern day Thailand. The start of the Asian Financial crisis was signalled by the collapse of the Thai Baht, and the collapse of Iceland may have signalled the start of the current crisis. This is not to say that Iceland was responsible for the problems, but, rather, it indicates a point in time when the shift occurred.
Well, the situation in Iceland got so bad that it took over a few of their banks recently and halted the stock exchange for two days:
Iceland suspended trading on its stock exchange for two days and took control of the country's largest bank – the third to be placed under its protective umbrella – on Thursday as it grappled with a banking crisis that is threatening to engulf the entire country.
The Nordic nation's government also used sweeping new emergency powers to create a new bank that will take over the bulk of the domestic operations of another one of its collapsed banks.
On the bright side, this is probably the bottom for Iceland. Things are likely to improve from here, although the economy may be in a slump for a while. The following chart from bigcharts.com plots the OMX Iceland 15 index:
Contrarians with high risk profile and access to Icelandic equities may want to look into the country and its businesses. This is probably a good time to invest in the country--certainly better now than at any point in the last 2 or 3 years. I would avoid the financials and look at solid businesses that are being sold off due to worries about the country. If I dig up something, I'll present my views. Tags: Iceland