According to this morning’s NY Times, “Iceland’s Leader Vetoes Bill to Repay 2 Lenders“ $5 billion owed to the British and Dutch governments.

Iceland, a nation of around 320,000 people as of 1/1/09, played fast and loose by borrowing low and lending higher (known as the “carry trade”) until it, like most American mortgage lenders, got hit with the sledgehammer of its borrowers inability to pay Iceland back.

Speaking of sledgehammers, should a private citizen attempt to back out of paying their local bookie or loan shark, a few burly types would be dispatched to coax payment from the reluctant debtor.

In this case, the equivalent of breaking bones might be an embargo of foodstuffs, or credit, or even withholding military assistance should Putin and his thugs decide that they’d like a bit more control of the waterways connecting northwest Russia with Europe and the North Atlantic, waterways that Iceland sits smack dab in the middle of.

Then again, the Western powers probably wouldn’t appreciate that unintended consequence of spanking Iceland.  We’re already stretched thin in Iraq, Afghanistan, and Pakistan, while desperately trying to prevent Israel and Iran from precipitating WWIII.

So the British and the Dutch, neither of which is in fine economic form themselves, will continue to attempt to squeeze water from a stone, or, in this case, a block of ice.  My guess is that, for appearances sake, their methods will remain civilized, although if they had their druthers, they’d probably opt for a little street justice.

Extrapolating a bit, I wonder how many of those Brooks Brothers Bozos would have taken the irresponsible risks they took if they knew that the result would be an old school back alley beat-down instead of a government bailout?

                          

Even though, as I write, it’s down 6% on the day, Smith and Wesson stock is up around 70% from its closing low of $1.58 on October 28th.

Originally it was widely thought that the stock price was going up as folks ran out and stocked up on hand guns and ammo in anticipation of new gun control legislation driven by a Democratic D. C.   There’s clearly some credence to that.

However, bigger picture, I think the rise in the stock price can be attributed to law enforcement buying higher margin rifles to deal with the coming lawlessness, bordering on anarchy. The contents of the Wall Street Journal and the NY Times are frightening, on a daily basis. Bankruptcies, both corporate and personal, abound. And then come the inevitable results: layoffs and more layoffs, especially in retail, which is where the unemployed normally go for a couple of months of part time wages during the holiday season.

People who are at the end of their ropes economically may cross a line they’d never have considered when they were employed homeowners. Illegal but employed aliens already don’t give much of a damn about our laws. Wait until they’re illegal, unemployed aliens.

All this, while Mad Vlad Putin is sounding over-the-top bellicose, and furious that the dropping price of oil is interfering with his plans for Russian re-armament. So the printing presses at Treasury have to keep pumping out Monopoly money to be used for both national defense and internal order.

I’m reading one of the best books ever written on the great depression, “The Forgotten Man”, by Amity Shlaes.  Any tome recommended by both Arthur Levitt and George Will is probably onto something. The similarities between then and now are chilling.  The book reinforces my admittedly dark outlook.

Chicken Little, or the Amazing Kreskin?  You decide.

Let’s hope the former, while preparing for the latter.

                          

So ex-KGB strongman Putin decides to make his Kremlin old school move as the world and its leaders are in an Olympic stupor. Since I give him and his crew credit for being geopolitical chess masters, I’ve got to assume that they were aware that their incursion in Georgia feeds directly into the McCain campaign.

So here are two possibilities to ponder:

1. He decided that it was of major and overriding value to intimidate Georgia and other neighboring former Soviet states right now, even though he’d be aiding the cause of our more hawkish presidential candidate.

2. He, for reasons I can’t fathom yet, would actually prefer a McCain presidency. If I had a trusty Russki AK-47 to my head and had to give my best guess why this might be so, it would be because he sees McCain as having more potential to bumble (a la Dubya) the increasingly complex problems that will land squarely on the desk of our next chief executive. While I give credit to McCain as being a brighter and more substantial fellow than the Bushster, he still isn’t a great multi-tasker, which is a prerequisite for public office in 2009.

Now Putin can also make mistakes, and he may have overplayed his hand here, as his Georgian adventure has steeled the resolve of Poland to get the U.S. provided anti-missile defense system into place ASAP.

Any thoughts on the above are welcome and I’ll post the best of them, as I think we’re all searching for answers, and if we’re not, we ought to be.

Editor’s Update: Here’s AP video posted today of Condoleezza Rice signing the missile deal With Poland. The video is a snoozefest, but the implications of the signing should have you wide awake.

                          

Welcome mat withdrawn.

The possession of energy and how and to whom it’s doled out have become the king and queen of the international chessboard. No greater argument can be made for a sane mad dash towards energy independence.

Post-haste and tout suite.