A followup to the Iceland note from yesterday: This morning, the ISK reached a nadir of 350 ISK to the EUR, and I was placing phone calls to travel agencies trying to book the cheapest holiday of my life.
Then, suddenly – a 4 billion EUR loan from Russia (which might or might not exist?) and the imposition of a currency peg, and ISK traded as high as 140 to the EUR. Think about that for a sec: the value of the Icelandic economy doubled in less than an hour.
…and then the ISK promptly slumped back to 220-ish, because you can’t impose a peg if you don’t have anything to defend it with.
Also iced today: Britain’s entire banking system (except for HSBC).