The great deception

Translated by John Ellis-Guardiola

 versão em português

A report released by the United Nations in October 2007 stated that Iceland, according to its social scorecard, had outpaced Norway and was now the best country in the world to live in. Exactly one year later, on October 6 of last year, a large proportion of the 320,000 Icelanders stopped to watch Prime Minister Geir Haarde address the nation. It was mid-afternoon, an unusual time—the Icelandic free-to-air channels don’t broadcast until 6 p.m. Nevertheless, there he was, stern, behind a table as somber as he, against the national flag in the background. Haarde spoke for 11 minutes. In his closing remarks he said:

Fellow countrymen, if there was ever a time when the Icelandic nation needed to stand together and show fortitude in the face of adversity, then this is the moment. Given the storm now beginning, I urge families to discuss together and not to allow anxiety to get the upper hand, even though for many the outlook is grim. We need to explain to our children that the world is not on the edge of a precipice and we all need to find an inner courage to look to the future. God Bless Iceland.

In the 48 hours that followed, the Prime Minister of the United Kingdom, Gordon Brown, invoked a law passed after September 11 and included Iceland on the list of terrorist countries and organizations. The Central Bank of Iceland, the Ministry of Finance and the two largest Icelandic banks were lumped together with Al-Qaeda and the Taliban. These institutions’ assets in the UK were summarily frozen.

In late November, in a cramped workspace in Reykjavík, Árni Mathiesen, the minister of finance, still reeling, shook his head and said, “The British reaction was the final nail in the coffin. They didn’t have to do that. I cannot fathom how someone can use an anti-terrorism law against a country like ours. Putting us on that list.”

It was the end of a process that led the peaceful North Atlantic island—which has no military and whose police are unarmed while on duty—to the most serious collapse of a country in peacetime. In seven days, Iceland became the greatest casualty of the global economic crisis. This was not a financial institution or an industrial sector, but a failed nation.

Icelanders are still seeking a precise metaphor: a hurricane, a shot, a truck that rear-ended them. And, although the process that brought them down was not necessarily the same one that led to the meltdown of the international financial system, historians may come to see the course forged by Iceland over the past decade as an example of the opportunities, excesses, vulgarities and risks of the times in which the rulebook was ripped up so that money could beget more money.

In 1936, W.H. Auden, then a young English poet, proposed to the Faber publishing house that he write a book on Iceland. Upon arriving at the port of Reykjavík, he noted: “My first impression of the town was Lutheran, drab and remote.” Remoteness or isolation have always been associated with Iceland.

When the Vikings arrived in 874, they barely found anything there, so they brought their Celtic women abducted from the British Isles and colonized the island. They treated the forests that used to cover a quarter of the territory just the way miners treat their mines; they didn’t realize they were fragile and would not regenerate. In less than 60 years Iceland became a desert made by man and sheep. The migratory flow ceased in 930, when population growth was no longer sustainable. Today most Icelanders can trace their roots back to the first men and the captive women who populated—and destroyed—the country 1,000 years ago.

The environmental disaster was the greatest reason for the country’s poverty until the mid-twentieth century. The characters in the work of Halldór Laxness, the 1955 Nobel laureate in literature, wish to drink milk, but can’t, they dream of eating meat yet cannot find any. Mesmerized, children watch their mothers prepare the first meal of the day and hope that a piece of dry bread will be brushed with fat and cod liver. Until recently, the life of an Icelander could be described as a battle for the minimal requirements for survival: a fish, a piece of meat, shelter from the cold. Isolation and adversities—hunger, cold, volcanoes, earthquakes, plagues—gave rise to an obstinate and independent people.

In 1262, the country became Norwegian, and in 1380, Danish. It gained sovereignty in 1918 and independence from Denmark in 1944. Foreign control of the island during these stages boiled down to formalities. The island was always left to its own fate. Without fortresses, castles or cathedrals, nothing on the island evokes the greatness of European history; the work of man is witnessed first and foremost by what is not there: the trees that do not exist, the remaining lunar landscape. A nation made of fire, ice, water and wind.

In the summer of 1936, isolation was not the only adventure Auden allowed himself to be lured by. He wanted to get to know the country of the sagas, too. Besides geyser, saga is the word that Icelanders gave to the world. It means “story” or “a saying.” Sagas are narratives compiled in the twelfth and thirteenth centuries that constitute one of the great epics of universal literature. Death, love, revenge, corruption. Together with the Eddas—texts in verse and prose that narrate Norse mythology—sagas are the immaterial heritage of Iceland, its unseen cathedrals. Icelanders know that they belong to a nation because in addition to the ice and the ocean, they have the sagas.

For a long time, they didn’t need anything else. At the end of WWII, Iceland was one of the poorest nations in Europe. Its three major assets — geothermal energy, fish and sagas—were communal. Everyone could stay warm and fish, and everyone could follow the drama of their nation’s formation in its original language. The notion of the common good, to this day one of the mainstays of Icelandic identity, prevailed. In 1936 Auden wrote, “They are still the only really classless society I have ever encountered, and they have not—not yet—become vulgar. In a verse, he added: “Islands are places apart where Europe is absent.”

In the mid-1990s, a new government decided that the time had come to bring Europe closer. The people—or the majority thereof—agreed.

“When I was in school in the late 1990s, there was a sense that we were damned to be a small-minded country without any possibilities,” explained Jón Steinsson in his classroom at Columbia University, where he teaches in the Department of Economics. Steinsson graduated from Princeton and Harvard, and, a 20-something who looks like a teen (he looks like Dennis the Menace), is one of the rising stars in the field of macroeconomics. He worked at the Central Bank of Iceland at the beginning of the decade, and last October, in the darkest days of the crisis, he was hurriedly called to advise the prime minister. “What many people today call unbridled ambition was a more complex process of national affirmation and creating opportunities,” he said.

Until the early 90s, Icelanders were born and died in a country that changed very little. Jobs were concentrated in the fishing industry, which accounted for 50% of exports. The mayor of Reykjavík at the time had the intuition that things could change.

His name was Davíd Oddsson. He was known for his bouffant, ambition and popularity. In his youth he was a comedian and an actor. He became well-known for playing the Ubu King in the eponymous play by Alfred Jarry, the creator of pataphysics, the science of imaginary solutions. His ten years at Reykjavík City Hall, from 1982 to 1991, overlapped with the governments of Margaret Thatcher and Ronald Reagan, both of whom he admired. He invited liberal economists like Milton Friedman and Friedrich Hayek to visit Reykjavík, where he would entertain their proposals for breaking the mold of the Icelandic model, almost every aspect of which incorporated the state.

In 1991, Oddsson was elected prime minister. He held the role until 2004—the longest-lasting premiership in Iceland. He was on the way to becoming the most powerful—and most radical—politician in the nation’s history. He began by privatizing the municipal fishing company and, year after year, he led the country on a liberalizing agenda. He abolished the wealth tax, drastically cut individual and corporate income tax and did the same with inheritance tax. The economy reacted. The average family income grew 17%.

In 2003, Oddsson took a crucial step. He privatized and consolidated the banking system, which came to be controlled by three large banks: Kaupthing, Landsbanki and Glitnir. Jón Steinsson noted that Icelanders had access to credit for the first time ever. “We were able to open a company or expand a business. We gained a sort of self-confidence we never had before: ‘We are going to be the nation of entrepreneurs!'”

It was around that time that a new word entered the country’s lexicon: útrás. It is made up of út (outward) and rás (rush). “The word is somewhat aggressive,” explained Ísleifur Thórhallsson, or Ísi, a young music producer. “It means an invasion in the opposite direction, an ex-vasion, going outward and seizing things, pillaging. In the crazy years everything revolved around útrás,” he said with a polite smile.

The word started to be proudly repeated by politicians in the government and was embodied by a new generation whose yearnings no longer jived with the insular spirit. Útrás expressed the desire to guarantee a place in the world and reject the “place apart” discussed by Auden. “Útrásvíking: that was its usage,” explained Gudmundur Jónsson, professor of history of the University of Iceland: “Viking invasion, raid to conquer money and fame. The take-over of the world.”

The Iceland of Davíd Oddsson underwent extremely fast-paced growth. Even though society on the whole prospered, some people did so more than others. Most of the domestic product belonged to a handful of 20 or 30 neo-Vikings (the numbers vary). “A rift started to separate the richest from the majority of the population,” Jónsson recalled. “So much wealth in the hands of so few was an absolutely new phenomenon in Icelandic society.”

A man called Ólafur Ólafsson, president of the country’s second largest transportation company, hired Elton John to play a concert at his 50th birthday party. Another magnate took a group of friends to a Caribbean island and, not to be out glammed, called US rapper 50 Cent to liven up his, 40th birthday party. For the first time ever, wealthy Icelanders showed off private yachts and helicopters. In a 2007 survey, a newspaper asked: “Who is the most interesting billionaire in the country?”

The non-billionaires got rich, too. A real estate boom started to transform the town that Auden visited. Reykjavík’s surrounding area was disfigured by the slashingly huge promises of investment. Buildings rose in the historical district. Car dealerships had a hard time keeping up with orders. With the launch of the Land Cruiser, a 100,000-dollar car, Toyota quickly identified its two greatest markets: Russia and Iceland. Buoyed by a strong currency, Icelanders grew accustomed to spending weekends in London and New York to go shopping. The world was cheap in Icelandic Krona, and debt was unlimited resource.

So much prosperity was underpinned by the extraordinary expansion of the three banks. Between 2003 and 2007, Iceland’s GDP grew 25%. In the same period, the banking sector grew tenfold. And since Iceland’s population is so small, such a great performance required international ambitions. Glitnir, Landsbanki and Kaupthing started opening branches from New York City to Helsinki. And they offered funding rates 50% higher than those of traditional banks.

One of the mysteries of the Icelandic miracle is how a financial system based in such a small country was able to grow in such a short time span. According to Jón Steinsson, there was a general consensus that the three banks were too important to Iceland’s economy for authorities to let them fail. They would soon become “systemic banks,” infallible. Some credit risk agencies bought the logic and, for some time, granted them unreasonably high scores. In some cases, they were even considered triple-A, the peak of ratings, denied to substantially more stable banks like JP Morgan and Bank of America.

With such a stellar reputation, Icelandic banks were in the limelight of the global financial system. The triple-A rating encouraged major institutional investors to seek out the high rates of the Icelandic banks, often without fully understanding the guarantees they offered. They packaged products from different institutions and, in a sleight of hand, the bank that had just arrived on the stage disappeared in the midst of centenarian institutions. And considering the British housewife who decided to deposit her savings in an Icelandic bank, which rewarded her even more handsomely than Barclays or HSBC, she assumed that the British laws protecting current account holders would also apply to her Icelandic account in the UK—after all, she hadn’t gone all the way to Iceland to open an account there, she just used her family PC or stepped into the new branch that opened in her neighborhood.

The Icelandic banks grew and grew—”just like in a fairy tale,” according to prime minister Geir Haarde. In October 2006, Landsbanki opened an online bank called Icesave, which aimed to collect deposits in England and the Netherlands. Thunderous success. The opulence was crystalized in an interview granted by the bank’s president, Sigurjón Árnason. He tried to explain how glorious it was: the model was so grand and the money so great and so easy that he dismissed the need for making any greater effort. The last paragraph reads: “‘The only thing that I have to do is check how much money was deposited at the end of the day,” chuckled Sigurjón. He then picks up the telephone, asks the question and announces: “Fifty million pounds, this Friday alone!”

Ísi was a film distributor at the time. Of all his classmates, he was the only one who did not migrate to the financial system. “Everything revolved around those three banks,” he said. “The jobs were unlimited, and the salary couldn’t be compared to anything we had ever seen before. Engineers, teachers, mathematicians, psychologists. Everyone went into banking. You would ask yourself, Should I get into it, too? Is there something wrong with me?”

Bergsteinn Sigurdsson, a 29-year-old reporter for the Fréttabladid newspaper says that nurses quit their hospital jobs to become account managers. Placing children in kindergartens was becoming difficult. “Teachers looked at the salary and would ditch the job. Better off working in a bank, they would say.” In a hotel bar, his classmate Kolbeinn Proppé goes on, “The new mantra was that we don’t need fish anymore. We have money markets now. The financial system was definitely sexier than cod.”

“For a long time, we were ashamed of our poverty,” continues Bergsteinn, “so, when we got rich, it was really great. We stopped being frugal. My generation got into debt, usually in foreign currency, because it was cheaper.” “The difference,” adds Proppé, “is that our grandparents paid their debts. In our case, the banks insisted: Don’t pay, get into debt. Everyone I went to school with remembers the banks coming in and offering credit cards. Getting a credit card was easier for us than for our parents.”

There were others who went even deeper into debt than the generation of Bergsteinn and Proppés: the banks themselves. Their deposits ballooned, and by late 2007 Glitnir, Landsbanki and Kaupthing were twelve times the size of Iceland’s economy. The navel was in Iceland, but as for the head, body and limbs, they were in Europe. Offshore, they collected deposits and provided loans in euros, pounds and dollars. Onshore, supervised by the Central Bank of Iceland, they did their accounting in Icelandic krona and lent money in a strong currency. Someone likened it to the image of a cat balancing on the body of a rat.

Iceland carried out its útrás plan by flying high on borrowed money. Icelanders came to own department stores in London, supermarkets in Scandinavia and a soccer club in England. Iceland’s cod, construction and maintenance and cleaning industries were dealt with by workers imported from Portugal, Poland and Belarus. The unemployment rate was close to zero. The country was heading steadily—or presumably so—in the direction of fulfilling the dream of becoming a financial powerhouse headquartered in a small territory just like Switzerland or Luxemburg.
That was until September 15 of last year, when the world woke up to the news that the investment banking giant Lehman Brothers filed for Chapter 11 bankruptcy.

“It was ground zero, the beginning of the collapse,” says Jón Steinsson. It was well-known that the Icelandic model was unsustainable—as early as 2005, reports started popping up here and there showing it was impossible for such a small country to use its own currency to keep such a grandiose financial system aloft. The euphoria of the markets, however, seemed impervious to any rationality. “Speculation on a large scale requires a pervasive sense of confidence and optimism… When people are cautious, questioning, misanthropic, suspicious or mean, they are immune to speculative enthusiasms,” wrote economist John Kenneth Galbraith in his book about the 1929 stock market crash. Throughout the world, especially in Iceland, prudence was shunned. The small island went from being austere to living in what seemed like a carnivalesque excitement.

Lehman crashing was the rain on that parade. From one moment to the next investors noted that if a stronghold on Wall Street capable of getting through the 1929 crisis unscathed was able to bite the dust now, then everyone was at risk—primarily adventurers. It did not help at all that one of the three Icelandic banks, Glitnir, had a line of credit at Lehman.

A rush to the banks ensued. On September 29, already waning, Glitnir’s C-suite asked the Central Bank of Iceland for help. Instead of receiving an emergency line of credit, they knew that the bank would be nationalized. The government injected 600 million euros in exchange for 75% of the stock. The next day, Glitnir’s controlling shareholder filed for bankruptcy. Luckily, the central bank’s plan was not implemented. Otherwise, the banking crisis would have become a treasury crisis, since Glitnir’s debt obligations would have become those of Iceland. Yet the luck was short-lived. The failure of the first bank set off a domino effect. Investors began to realize that without a strong currency, the Central Bank of Iceland would be unable to guarantee the debts of the banks that it oversaw. “Instead of being too big to fail, they were too big to save,” Steinsson says.

The following week it was Landsbanki’s turn. On the eve of its collapse, the prime minister appeared on television to warn the nation that the storm was now lashing the island. That same evening, on October 6, anyone from Iceland who tried to communicate with the world via Skype found out that Icelandic credit cards were no longer being accepted as a payment method.

On October 7, when Landsbanki crashed, it took with it the virtual bank Icesave. Foreigners who tried to withdraw their money found the following message on the site’s only accessible webpage: “We are currently processing deposit or withdrawal requests for our online accounts. We apologize for any inconvenience this may cause for our clients.

That afternoon, Alistair Darling, the Chancellor of the Exchequer of the Unite Kingdom, called his Icelandic counterpart Árni Mathiesen, and the two had a conversation that would become one of the most contentious chapters of the crisis. The Financial Times managed to obtain a transcript of their dialogue. Darling wanted to know whether the government of Iceland, which had just nationalized Landsbanki, would compensate the 300,000 British Icesave accountholders. “I hope that will be the case,” answered Mathiesen, “I cannot guarantee that now, but we are certainly working to solve this issue. This is something we really don’t want to have hanging over us.” The following day, Darling stated to the BBC that “The Icelandic government, believe it or not, have told me yesterday they have no intention of honoring their obligations here.”

Mathiesen had not exactly said that, but the British government decided not to wait. On October 8, Gordon Brown announced that the United Kingdom could sue Iceland, whose assets on British soil were as of that moment frozen. The instrument that provided the legal means to freeze the assets was precisely the September 11 Antiterrorism Act. The announcement was so untimely that it created a fluster: what exactly was frozen? The assets of a bank, of a government or of the citizens?

Making matters worse, the foreign currency reserves of the Central Bank of Iceland were held in the Central Bank of the United Kingdom. The general perception—and in this case, perception was everything—was that Iceland didn´t have a single euro or dollar. The krona plummeted. In the words of a resident of Reykjavík, “it became Monopoly money.” It was like having petty cash in our pockets.

Speculative and drastic, Brown’s measure muffled an important news item: the only Icelandic bank still standing, Kaupthing, managed to secure a loan from the Swedish government. The largest bank and company in Iceland, and the best managed, too, Kaupthing was a solvent bank until then, and now the Swedish aid injected it with liquidity. But it didn’t matter. Iceland had already become the pariah of the international financial system. Kaupthing went bankrupt and was nationalized the next day, October 9.

In less than a week Iceland’s financial system melted down, and with it, so did the country’s economy. It was a good old-fashioned debacle, a bank run driven by a lack of trust, without any interference from subprime loans, derivatives or any other instrument of contemporary financial metaphysics. It seemed as if Iceland had been annihilated by scurvy.

At the center of its demise was the same man whom 17 years earlier had decided to transform Iceland. After ending his term as prime minister and spending one year as the minister of foreign affairs, David Oddsson took the helm of the Central Bank of Iceland. In Iceland’s peculiar political culture, old politicians gain the sinecure of one of the chairmanships at the central bank; there are three of them: two for political appointees and one for an economist. “The difference is that the two politicians would usually go play golf and let the expert do the work,” says journalist Bergsteinn Sigurdsson. “It’s just that Oddsson decided to become a central banker.”

Months before the crash, Kaupthing realized the fragility of its model and suggested publishing its balance sheet in euros. This would be the first step for transferring its operations to England, where it could rely on a powerful central bank. Upon hearing the president of Kaupthing’s proposal at a dinner at the International Monetary Fund in Washington, Davíd Oddsson —like any Icelander, obstinately independent, and like any rightwing politician, skeptical about large transnational bureaucracies like the European Union—responded, unconcerned whether he was heard: “If you do that, I will bankrupt you in one week.”

In the first half of October, upon seeing the krona topple, Oddsson ordered a fixed exchange rate. He managed to sustain it for just one day. The next thing he did was announce a loan—nonexistent—provided by Russia. He slashed the interest rate and two weeks later raised it again, by six points in one fell swoop. Anybody who was wondering whether Iceland was in the hands of amateurs was now able to draw a definitive conclusion.

By the end of October, Iceland’s GDP had shrunk 65% when calculated in euros; 15% in krona. Seventy-five percent of architects were fired, all construction projects came to a standstill. Auto sales dropped 90% (some statistics suggest that not a single car was sold in October). News stories ran—probably unfounded, yet vivid in the context of the national nightmare—stating that up to 80% of companies would go belly-up in six months. Fifty percent of young people between 18 and 24 were considering leaving the country. Anyone who wanted to travel, no matter the reason, even for business, had to ask for permission to do so from the central bank in order to buy foreign currency. It was nearly impossible to officially buy more than 700 euros.

This was what everyone knew. What was even more frightening was what people did not know. Upon going bankrupt, the group of banks accounted for 75 billion dollars on its balance sheets: 250,000 dollars per man, woman and child in Iceland. No matter the size of the liability, it now belonged to the country whose GDP, depending on the volatility of the currency, would be between 7.5 and 9 billion dollars. Nobody knows for sure how deep Icesave’s debt is, but there are those who say it is larger than the GDP. If its creditors—which include 120 British municipalities, philanthropic organizations, hospitals and universities (Cambridge alone deposited 20 million dollars), in addition to thousands of small account holders—forced their respective governments to collect the debt, Iceland would have to give up, at least in this case, the equivalent of one year of all its production. Not even the reparations demanded from Germany at the end of the First World War in the Treaty of Versailles went so far: they were limited to 85% of the GDP. In the beginning of November, as the cold gripped and the days drew shorter, the first jokes cracked. “Do you know how to save a speculator who is drowning? No? Great.” “How do you free yourself from a banker knocking at your door? You just have to pay for the pizza.” “What do you call 500 investors at the bottom of the ocean? A good start.”

The stands in the empty shopping malls displayed t-shirts: Oddsson with a Hitler mustache, “Iceland = Banana Republic,” “Iceland is the most bankrupt country in the world.” It was a way of not to despair. News from abroad included reports of Icelanders being harassed in cities where they used to be welcomed with stores wide open. In Copenhagen, at passport control, an Icelander heard a police officer say, “Give me my money back!” In London, another Icelander was asked to leave a restaurant. The “Letters to the Editor” section of the English-language newspaper Reikjavík Grapevine read, “Perhaps it would be best to sell Iceland to the highest bidder. Because this is the only thing that these criminals have: their own country.” There’s more: “It is good to see this corrupt country go down the drain and take with it its criminals, bankers and politicians. We need to colonize this country and put people to work, at starvation wages, of course. And after 100 years, after the debt is paid off (including the 9% they promised us in interest on our deposits), the island could be used as a testing ground for a new atomic bomb.”

The word útrás was replaced by the word kreppa: crisis, recession, crunch—like a spasm or a tight fist. “I was born in 1979, I do not know what hard times are,” mentioned Bergsteinn. “But, now everyone knows someone who’s lost their job. At the newspaper we accept a salary cut in order not to be fired. It is frightening.”

“We did not only lose money. We also lost the pride of being sensible, fair and not vulgar,” says Thorhallur Vihjálmsson while walking along the beams of an oceanfront construction site at the nicest point along the shore. Snaefellsjökull, the extinct volcano where Julio Verne’s characters reach the center of the Earth, can be seen in the distance covered in snow. “Here is where the restaurant would be,” says Thorhallur, pointing to a bare concrete slab. He is the marketing director at the Harpa Music Hall and Conference Center, the most visible remains of an unfinished building in Reykyavík. Budgeted at 220 million dollars, the building was conceived as Landsbanki’s owner’s bequest to Iceland. It was the subject of an international architecture competition garnering submissions from the Frenchman Jean Nouvel, Englishman Norman Foster, and the winner, the Dane Henning Larsen. The building was designed to be on a par with the public buildings that put cities like Sydney and Bilbao on the map. The glass polyhedrons that jump into the ocean like a translucent ship would be the destination for the best orchestras and major performers. The grand opening was slated for next December.

The developer went bankrupt in the first half of last year; six months later, so did the bank. The remnant: Thorhallur, half a dozen workers and 28,000 square meters of unfinished construction work, not to mention a website where the building appears in a completely built mock-up, right next to a five-star hotel and Landsbanki’s new headquarters, which would have occupied the adjoining property donated by the government. Many people say that the huge structure will become the true monument to the decade’s failure. There is no way to hide from the skeleton. Due to its privileged location, it is always within eyeshot.

Thorhallur is about 40 years old, has pink cheeks, a goatee and the air of someone who has lived most of his life outdoors. In a movie, he would play the lumberjack. He is passionate in describing the building project. He imagines it as the expression of the Icelandic spirit: a democratic place for all. “To us, being an Icelander used to mean that we were the same. Nobody was rich or poor. Then the craziness settled in and some 30 guys became obscenely rich. We weren’t used to that. Look up there,” he’s pointing at the upper walls of the concert hall, which stand over 10 meters tall. “They wanted to build VIP boxes up there. When I brought people to visit the construction site, I never talked about them because I felt embarrassed by the concept.”

One of the few construction workers still on the job stops by to say hi in a language that is not Icelandic. Thorhallur picks up where he left off, “And you know, there is also the issue of the care, the respect for work done well. The millionaires didn’t have that. The owner of Landsbanki never mentioned the Poles who were building this structure. But just knock on this wall: It is decent work, solid. These guys deserved to get credit but have been forgotten. We are ashamed of ourselves.”

Thorhallur understands the ambivalence of what he is saying. Útrás was not just an economic idea, but also the feeling of being part of something greater than Iceland. It was a chance for dialogue with the world. The work that he happily defends reflects the clear bias of expansion. “I know, without those guys we would never have had the ambition to erect a building like this one. It is the flipside of the coin. In any case, now that they are gone, the VIP boxes have been scratched from the plans and I feel that I’ve gained back my Iceland.” He flashes a smile: “People live their lives saying, fuck the system! Well, the system fucked up on its own. The revolution came and we didn’t have to do anything.”

A month after the tragedy, however, Davíd Oddsson was still in power. Neither he nor the government fell—and little by little Icelanders were replacing their shock with anger. “At the beginning we would stay home and curse at the television. We are a nation of displaced farmers,” says Thorhallur, “and that is what farmers do: they go home and complain in the company of their family. The French go to the streets because they have been living in cities for centuries and they are used to it. Now, for the first time in history, we are furious. And we choose to be furious together.”

The first signs that Iceland was no longer a docile country were anecdotal. A banker was thrown out of a gym. Others thought it more sensible to move to London. Those who stayed decided to follow in Oddsson and Prime Minister´s footsteps: they stopped walking on the street and hired bodyguards, a fact that Reykjavík’s residents repeat ad nauseum with the astonishment of someone talking about the arrival of extraterrestrials. “It is really unprecedented!” exclaims Ísi, the music producer.

Prudishness is felt stronger the smaller the group is. In Iceland, when you screw up, you do so in front of everyone, parochially. Every dramatic situation ends up being a family affair, like the scoundrel brother-in-law who imposes on his relatives upon showing up for Christmas dinner. “This is a very small country, everyone knows everyone. Any trip to the supermarket becomes an epic journey to the past because it is impossible not to bump into an old teacher from your school days, or a classmate from kindergarten,” says Thorhallur. “The prime minister used to walk on the street, we would wave. Now they can´t even go into a restaurant.”

On October 10, one day after the last bank failed, 200 people gathered in front of the central bank to demand Oddsson’s dismissal. Hördur Torfason was among them. Taking the microphone, he told the group: “This is not a financial crisis, this a political crisis. The protest shouldn’t be here, but rather at Austurvöllur (Parliament Square).” Unbeknownst to him, at that moment he became the leader of the largest protests in Iceland’s history. The following Saturday, a crowd gathered in front of Parliament to demand that the government step down.

On a Friday in late November, I went up three stories in a building on a quiet street in Old Reykjavík. Hördur opened the door. He is about 50 and looks like actor Daniel Craig. His apartment is simple and white; the only color is the blue floor. Hördur is a singer, composer and actor. He defines himself as an “artist,” and may be what even to this day in places like the Santa Teresa neighborhood in Rio de Janeiro, or Mauá in the Serra da Mantiqueira is known as a trovador. He does not have a television. He drinks tea. He is brave: in the Lutheran Iceland of the early 1970s, he was the first man to publicly declare himself gay.

“We are bankrupt, they played with our money,” he begins as he boils water for another pot of tea. “I lived in Denmark for a long time, and every time I came back, the shock was greater. The vulgarity. Ever since the 60s we were leaving poverty behind, but actually, we were still modest in terms of our preferences. We became one of the richest countries in the world, but it wasn’t so apparent at first. And then we saw it. It was as if someone who had won the lottery started jumping up and down with the bags of money in hand. That’s over now. Everyone is angry and ashamed.”

He moves closer to the generous window that opens onto the bay. By the seaside there is an unfinished building. The static crane looks like an animal. Hördur says, “They were going to live over there, in those buildings that have disfigured the city. That skeleton has 17 floors. They say they will only install the glass to keep the wind from destroying the rest. This generation hasn’t experienced adversity, only luxury. I call them the sleeping generation.”

The protests channeled dissatisfaction. They’ve been taking place every Saturday, always at 3 p.m. in front of Parliament. It was the night before the seventh Saturday. Seven days earlier, 6,000 people appeared, 2% of the population.

By 2:30 p.m., in the intense cold and under the low sky full of heavy clouds, Parliament Square was still relatively empty. A man was being interviewed by a Latvian TV station: “Ten guys put my grandchildren in debt, that is why I am here. Democracy no longer exists.”

The square is gradually occupied by the crowd and almost everyone is carrying a poster. “We are all protesting,” “Davíd [Oddsson] = King; Geir [Haarde] = Clown; Árni [Mathiesen] = Court Jester,” “Down with Capitalism.” A 50-year-old man, an unemployed construction worker, shakes a picture of Haarde that reads “Your time is up.” “Terrorist,” says the man, pointing at the image of the premier. Another, who lost his car in an accident—his insurance was with Kaupthing—carries a photo of the bank’s entire board of directors: “I am here because of him and him, and him, and him.”

A little band starts playing funerary and military marches. Writers take the stage and read passages from sagas in which the struggling souls and the scoundrels are replaced with politicians and millionaires. Gordon Brown appears dressed as Hitler. A man carries a poster that attacks Baugur, a conglomerate that controls supermarkets, newspapers and banks and whose owner, Jón Ásgeir, may be the most notorious neo-Viking, as well as the only one to remain in Iceland to face the protests. Close to the stage, a 10-year-old boy holds a poster that in several languages asks: “What will my future be?”

At 3 p.m. sharp, with every inch of the ground occupied, everyone sings the national anthem. Hördur picks up the microphone and yells, “Do you want to take down this government?” The answer is roaring. “Davíd?” “Down!” “Geir?” “Down!” “Down!” “Down!” He hands the mic to a law student whose bony face makes her look steady. In her crescendo of fiery speech, she urges the population not to pay their debt. The veins in her neck throb and her voice breaks under the strain of the yelling. Ten minutes later, she stretches out her arm toward Parliament and concludes, her anger and contempt unbridled, “If you haven’t left in a week from today, there will be a revolution!”

At that very moment a huge banner unfurls from the top of the building with a lot of noise almost grazes the ground. It bears the image of a wolf called IMF swallowing Iceland and defecating the words education, healthcare, independence. A boy raises his fist on the roof. From the other side of the square, another activist appears on the balcony of the Parliament and hangs a sign on the fence. Red letters spell out FOR SALE. Stamped on top of the words: SOLD. The price, 2.1 billion dollars, the figure that the government and the IMF agreed to that week—it was the first country in the developed world to resort to the institution in over 30 years.
Someone announces that an activist was arrested the night before. He had reached the roof of the parliament building, not to hang a sign, but to replace the national flag with that of the supermarket that belongs to the Baugur group. The chain’s symbol is a pig. In the midst of the yells, Hördur suggests that people leave the square and head over to the police station where the activist is being held in jail. About 200 people set out in that direction.

One of them is Thór Jóhannesson, 33, a literature student about to graduate as an Icelandic professor. He is amazed by the size of the protests. “When Oddsson supported the invasion of Iraq, (we sent one soldier—a woman, in fact), 80% of Icelanders were opposed, but only about 200 came out and protested. What is happening now is totally new. The state of affairs is as bad as it can get. The politicians are connected to the bankers, who are connected to the major business groups. This country is highly incestuous. It looks more like Russia with each passing day, just without the dead bodies. About 20 or 30 guys are our oligarchs. The government gave them everything, from the banks to the fishing permits. The right to exploit the waters of Iceland now belongs to just 15 or 20 companies. They are the only ones with the rights for commercial fishing. And we lost it all: money, work, shame.”

The police headquarters is a two-story building with a double door at the entrance. The protesters try to get in, but it is locked. There is not a single police officer in sight. The closed door seems to be an almost childlike tactic to suggest that nobody is home, an impression that is reinforced when the lights inside are turned off. Once in a while we can make out a half-crouching figure as it hurriedly passes by a window.

It starts to rain. In the street, blocked off to traffic, men and women with canes join young people. When the bus tries to force its way through the crowd, a 15-year-old body opens his arms and lets himself fall onto the windshield, eye-to-eye with the driver. Another bus tries to get by, and this time it is a middle-aged woman who leans on the vehicle’s bumper. Not bothered by the rain or the night, they all yell, “Út med Hauk! Inn med Geir!” Haukur is the boy in jail; Geir is the prime minister. “Release Haukur! Jail Geir!”

“Where are the rocks?” Thór Jóhannesson asks. “That’s typical of Icelandic nice. We are always a step behind the real revolt! Where are the rocks?!” he repeats, this time at the top of his lungs. Someone shoots down a balloon and red paint splatters on the building’s façade. Then another. A guy steps forward and kicks on the door. A young angel faced girl follows suit, and soon tens of people are taking turns kicking the door.

Inside, you can see the figures of men with helmets and visors bustling about. Pieces of wood appear, sometimes acting as battering rams. The door gives in just as a collective roar crosses the street. A group of young people hurl themselves inside and are stopped by teargas. Riot police file out of the side of the building: 19 unarmed soldiers who shove their way to occupy the entrance to the police station. In front of them, just a palm’s distance away from their faces, young people start throwing insults at them: “Fascists!” “Traitors!” Egg-throwing ensues. The yolks slide down their visors, shoulders. A young guy sticks up his middle finger and leans it, obscenely, on a police officer’s visor as he quietly repeats, as if uttering a mantra, “Fuck you, fuck you, fuck you.”

Thór is in the middle of the crowd and grips the arm of the person in front of him: “This is historic! If we could get 100 people to force our way in and free the guy, that would mean the government is over.” The rumor that the protest will be broadcast live on the news at 7 p.m. reignites the fire of the 100-odd people whose spirits now, at 5:50 p.m., start to dampen under the rain and the police officers’ composure. It doesn’t last long: soon the TV trucks leave. “They are going away!” yells Thór. “This is not public television, it is state television.

When everything seems to reach a standstill, the riot police open a corridor and from the back end of the police station appears a puny guy in a hoodie and mask wearing an Iron Maiden t-shirt and carrying a Nike backpack. It’s the prisoner. There is a moment of astonishment, and then the front line protesters rush toward him and lift him up on the crowd’s shoulders and, without removing his mask, à la Subcomandante Marcos, he answers reporters’ questions.

6:10 p.m. The revolution was not televised, but whoever was in front of the police station on this frigid evening saw what a journalist described as the most efficient protest in the history of Iceland.” There is still one more yell from the crowd: “Now we are French!”

On Monday morning, the opposition—weakened, powerless—tries to pass a no-confidence vote against the government. It flops. In Reykjavík, all anyone talks about is the gathering taking place that night at the University of Iceland movie theater. A group of citizens called the government to provide accountability. On the stage, 12 chairs, one for each minister, and in front of each in large letters the name of the minister. Whoever doesn’t show up will be noticed by their absence, by the power of an empty chair, a name. People will give speeches based on these absences.

Nobody believes that the government will actually show up. By 8:00 p.m. there is not a single empty seat in the 1,800-seat auditorium. There are people sitting on the stairs, close to the walls, at the foot of the stage. Outside, in the foyer, another 1,000 people wait in front of large screens to witness this show.

Astonishingly, one by one, the ministers appear from the sides of the stage. Dazed, booed, they walk toward the chairs and find their names. Only four remain empty, most notably, Oddsson’s, emblazoned with a huge DAVÍD in black boldfaced letters. Even the prime minister, Geir Haarde, shows up. His seat is next to that of Oddsson, and at several points during the agony-filled hours he would lean on the back of the chair of the politician who was nothing more than a shadow.

It was the first time since the beginning of the crisis that the government made itself available to address society’s concerns. Since October, the administration shut itself up and ignored the protests. There had been no interviews—and now the government was appearing in a public hearing that would be broadcast on live television. The empty chair strategy seemed to have the desired effect.

A journalist mentioned that the incident at the police station forced the ministers to come; it was not until then that they realized how serious the situation was. Others even said that if they did not come the protesters had already planned to split up into groups and go to each of the cabinet members’ homes. There was no escape route.

Contrary to expectations, the floor is not given immediately to the ministers. A master of ceremonies takes the microphone and turns to face the eight politicians and says, “Today you are going to have to be honest. And you will have to answer with your own words, not with speeches prepared by marketing men.” Ironic, the MC jokes and the audience starts laughing. Soon it is clear that this was no fact-finding session, but rather an opportunity for public humiliation. Speaker after speaker climbs onstage to read prepared speeches. A professor of economics demands the swift dismissal of the banks’ board of directors (only the CEO had been fired), a proposal that receives applause and bravos.

Haarde watches the whole affair with his head buried in his shoulders, his eyes fixed on the audience, defiant. He is betrayed by his nerves, by his foot that can’t keep from tapping. A businessman states that “the political system ought to be purged, which can only happen with new elections.” He explicitly requests the government to step down. He gets an standing ovation. Even the prime minister politely claps his hands. A political scientist declares that from here on out Iceland will always be known for three words: saga, geyser and kreppa. Directly referring to the eight men seated a meter away from her, she adds, “If you do not admit that the protests are legitimate and do not talk with the demonstrators, there could be riots and violence in Iceland.” It is not young people who are confronting the government, but rather academics, freelancers, businesspeople, men in ties and jackets, women in suits. A young unemployed woman takes hold of the microphone and with undisguisable fury she turns to face the prime minister and orders: “Geir, step down!”

Ninety minutes into the session, the ministers still haven’t said a word. Some of them sit with their eyes fixed on the floor. Someone finally gives Haarde the microphone so that he can answer the question: “Why don’t you all resign?” The prime minister explains that the situation is too serious. There is a rescue operation underway, as well as complex negotiations with the United Kingdom and the IMF and that an election would mean a disruption in that process. The minister of foreign affairs speaks up: “You who are here may not represent the majority of Iceland’s population.” That gets the most intense boos of the night. The following day, the opposition leader goes on to say that only the minister of education had the decency to apologize for the tragedy.

The political schizophrenia was obvious. The prime minister clapped at calls for his own resignation. The minister who defied the public had stated just days before that if she weren’t in the government she, too, would take to the streets in protest. The trade minister called for Oddsson’s ouster. And the IMF, called in a rush, appeared to save a country that until this moment followed the most orthodox economic liberalization policies.

The session ended at 10 p.m.

Steingrímur Sigfússon, the leader of the Left-Green Movement, the largest opposition party, has an office on the second floor of a small house behind the parliament building. Sigfússon looks like an old activist from 1968—goatee, sandals and socks. Between each sentence he sprinkles a pinch of snuff into the palm of his hand and snorts. He has called for the prime minister’s removal but given the choice between the government he opposes and the world that has turned its back on his country, he sticks with the government.

“The onslaught of the crisis has been so violent that it had become a force majeure, a concept of international law that is applied to countries ravaged by war or systemic crises. That is exactly what happened here, he stresses. In cases such as these, the laws in effect are suspended. “What was our duty? How much were we supposed to pay? We needed the courts to arbitrate, but they would not allow it. When our currency disappeared and we no longer had any money even to import food, England and the Netherlands blocked the agreement with the IMF and would not accept it until we gave them guarantees that their depositors’ money would be returned. We were held hostage by these countries. I am critical of the IMF. We lost our independence, they are going to dictate public policies; the government has already announced a 10% cut in healthcare services. However, I admit that after the October catastrophe, there was no other choice than to go to the Fund. It was either that or a return to the 1930s.

Sigfússon believes that part of the calamity is due to the fact that the banks went bankrupt at the most critical moment in the global crisis. “In October, when Brown stated that we were terrorists, the system was already faltering. The signal was very clear: If any country or bank was thinking of defaulting on its debt, it had better reconsider. Just look at what happened to Iceland. We were an ideal case to set as an example: a country that could be destroyed without triggering any major disturbance. We were Gordon Brown’s Falklands.”

He was shocked by the popular uprisings. “I would much rather overcome this crisis in a peaceful manner.” Upon ending our conversation, he concluded with a tinge of fright in his voice: “These demonstrations are indeed historic. We are not French.”

Outside, in the rain, a group of women is holding hands and surrounding the government headquarters, where Geir Haarde works. Along the sidewalk, without fences, the chalet looks more like a country restaurant than the epicenter of power. The workers who leave the house through the only door on the front side squeeze between the few stairs and the circle of women. There is no police. Two steps away, an optician replaced the eyeglasses in the shop window with a giant poster that read, “Thank you, Gordon, for destroying our economy.”

“How did you end up here?” I ask Luciano Dutra, 35, who works for the Icelandic social security service. He smiles, “Like almost everything in Brazil, it was an Argentinian’s fault.” Jorge Luis Borges. Upon quitting the literature program at the Federal University of Rio Grande do Sul, Luciano decided to translate Borges’s sonnets and he stumbled upon the author’s love for Icelandic sagas. Noting that there were no translations into Portuguese, he applied for to an undergraduate course at the University of Iceland. He arrived in 2002. He learned the language, finished his program and started translating the sagas, “it took me about ten years.”

“This very well may be one of the most extractive countries in the world,” he remarks. “Think about it: fishing and energy. Nobody takes care of the shoals or plants energy. So, ten years ago they decided to change everything. In less than one generation they migrated from a natural-resource-based to a service-based economy. It did not work out.”

One of Dutra’s jobs is to process European social security certificates for people who are thinking of moving out of the country. “There used to be about 20 people requesting these certificates per week. In the past month, there have been over 200. The country is undergoing a mass exodus. I heard about two Icelanders who went to Poland to work at potteries in order to send euros to their families here.”

Everything is inverted, as if Iceland shifted to the other side of the mirror. On November 21, the newspapers published the story that there would be a job fair at City Hall. On the first day, over 2,000 people squashed themselves into a space too small to host them all. Young and old, men and women, laborers and university students competed for leaflets distributed by the exhibitors: “Live and work in Lithuania,” “General information about working in the Netherlands,” “Engineers in the North Sea.”

A group of Portuguese are thinking of moving to Norway now that that they have been laid off from a heating company. “I got here two years ago, it was paradise,” says cabinetmaker José de Souza. He brought his wife, son, father-in-law, brother-in-law, and the brother-in-law’s friend. “There was work everywhere. Now it’s all dried up. I will earn my last wages here in December.” His co-worker, Brazilian Adilson Mendanha from Ipatinga, Minas Gerais, has been in Iceland for seven years. “This country has been sensational. I managed to send 15 to 17 thousand reals per month to Brazil. I bought a huge house and I have a Jeep Cherokee, but now I have to leave Iceland in April.”

Standing in before the booth for Lithuania, an Icelander asks, “What types of work?” The representative answers, “Clerk, cook, server, forklift operator.” His eyes light up, “Bus driver?” “Yes, we have that too, but you need to speak the language.” He heads off, discouraged. A Scandinavian oil company offers 300 jobs for engineers. In less than two hours he has already received 30-odd resumes, many written on the spot, supported on a thigh or wall.

“It was hubris, excess,” admits Árni Mathiesen, the finance minister at the ministry’s headquarters—like everything in Iceland, a very confined house. His office is so narrow that the meeting table’s chairs constantly nudge up against the wall. Upon hearing “How are you?” he answered: “Holding steady.” He admits that even he does not know how much the country owes. “We won’t know how deep into debt we are until three or four years from now when we finish the bank liquidation process. And if we are unable to transfer it by privatizing the banks again, we will be in dire straits.”

Mathiesen seems relieved that the euphoric years are over. “Look, before all of this, we led a good life here,” he recalls, referring to the time when Iceland lived off its shoals and he was the minister of fisheries. He, too, joined the flow in making the switch from fishing to finance.

Ísi Thórhallson, the music producer, brings up the question that torments the country: what will it mean to be an Icelander after the financial catastrophe? “Now that we are no longer cool, we’ve realized that we are still just an island in the North Sea. We’ve had many opportunities in the past ten years, but when the ship sank, we told ourselves, fuck the foreigners! The government only guaranteed the deposits in Icelandic krona. So, yes, we stole. They deposited their money in our banks and in the end we couldn’t pay them. We weren’t as good as we thought we were. Now the millionaires are the villains, whereas before they were the heroes. Being a banker used to be cool. Nobody stopped to think, what the hell? Wasn’t it better for them to be boring? We should think it is wiser to trust our money to a cautious person, not some lunatic. But no, they were cool. Nobody second-guessed, let alone criticized the bankers. Not even the artists. They were also in the bankers’ pockets. They received support, were hired to play. It was a rave. We fell on our faces, all of us.”

Professor Gudmundur Jónsson is careful when it comes to assessing blame. “I am reluctant to say that we all bear the same share of the blame. It is absurd to think that the average Icelander is responsible for the crisis. There was a lack of caution, but that isn’t what triggered what happened to us. ” Indeed, the debt of Icelanders does not compare to that of the banks. Even so, on the street it is always clear whether people are protesting against the wasteful spending or the end thereof.

The country is facing the dilemma of whether it wants to go back to be the Iceland of modest expectations. “There is the risk that we will feel irrelevant and provincial,” said Jón Steinsson, from Columbia. Even Hördur Torfason, who runs the resistance against the government every Saturday deals with this conflict: “Thirty-three years ago, when I publicly came out of the closet, the world fell apart. Here it used to be the Middle Ages. That is why I spent years at a time in Denmark.” Hördur escaped old Iceland and now protests against the new one.

Björn Hrafnsson, a journalist specialized in economics, has no doubt about it. At a café on Parliament Square, he says, “Nobody wants to be a fishing country anymore. We are frightened, angry, but we do not want to go back to the past. In two or three years we will have to reprivatize the banks and do everything all over again.” It will probably be difficult. The same day that Glitnir’s moratorium was officially ordered, Kristján Davídsson, an executive at the bank who was laid off in October and hired back again to help liquidate it, told me that “The banks will be reprivatized, but due to the lack of trust, we will not have access to major lines of credit. We will be small banks that lend only what Icelanders manage to save. You can’t go very far on that. We won’t build anything else.” A foreign diplomat put it succinctly: “They will have to fish a lot.”

For many people, the first salvos of útrás were uttered in December 1998, when Parliament gave into pressure from the Oddsson government and approved a astonishing law. The issue this time was not privatizing a public utility, but rather Icelandic genetic heritage.

Since it is so isolated, Iceland’s population is made up of the descendants of the very Vikings who landed there in the ninth century. Every Icelander can trace their family tree back to those first men and women. This is a common heritage and constitutes one of the great treasures of modern medicine. Diseases can be tracked over generations, and genetic causes, if there are any, can be identified. All cases of breast cancer in Iceland are due to a single genetic mutation that took place in the sixteenth century in the DNA of a monk named Einar.

In 1996, a neurologist and professor of medicine at Harvard founded a company licensed to use this immense database of genetic information to identify pathologies and develop treatments. He only had one request for the government: that he be granted the ownership of the intellectual property of his discoveries. Two years later, the government approved the project and thus granted DECODE, Kári Stefánsson’s company, the right not just to explore the medical records of the National Healthcare Service—meticulously maintained since 1915—but above all, to own, both for scientific and commercial purposes, the population’s genetic information. It was the first time in history that such a right has ever been granted to a company.

The scientific community was violently opposed to this arrangement. On the other hand, the Icelandic population, or 95% of it, in fulfilling a duty they deemed to be civic, responded to DECODE’s call and voluntarily donated their blood. The company today owns a database and the family history of practically every one of the 800,000 people that have ever lived in Iceland. In recent years, 70% of the discoveries that relate a genetic mutation to a certain pathology—from schizophrenia to lung cancer, to nicotine dependence and diabetes—took place in the company’s laboratories in Reykjavík.

Kári Stefánsson works in a huge room. From his desk, through the large windows, he sees the icy mountains surrounding the Reykjavík Bay. At 6-foot-2-inches tall, dressed in black, a perfect contrast to his snowy white beard and Viking hair, he is about 60 years old and has the vitality of a bull. He seems to have gone through life with the certainty that he was always the most handsome and intelligent animal in the room. They say that he is the most brilliant man in Iceland, an opinion he does not bother refuting. He is at the same time aggressive (“Are you as bad of a journalist as you seem?”), and seductive (“No one has ever had as clear an understanding of what is going on here”), a not-so rare combination in men who like to be feared and fear not being liked. Vain with regards to his intelligence and erudition, he is capable of interrupting an answer in order to recite full poems by Auden or Octavio Paz.

“I cannot answer that,” he says with poorly-feigned condescension when asked whether the company that he founded triggered the untethered process of deregulation. “I cannot answer that simply because the question makes no sense and is absolute nonsense. How should I compare myself to those people who destroyed my country? I invested in Iceland. They invested abroad, took borrowed money and pledged the Icelandic people as collateral. I brought scientists here, changed this place into the most important genetic laboratory in the world. And what about them? What did they leave behind?

Most Icelanders lost their money with Stefánsson. When DECODE had its IPO on NASDAQ—it was the first Icelandic company to go public on a foreign stock exchange—the government encouraged the entire population to invest in it. It was a patriotic attitude. Priced at 30 dollars a share, the stock’s value soon dropped to 20 dollars and today is worth less than a dollar. The company is on the brink of collapse. In October it did not meet its obligations to its creditors. The maturation period for a biotech company is extremely long, and the global crisis depleted the investment flows.

At his huge table, looking through his enormous windows, Stefánsson shows no signs of ruin. Perhaps he imagines that he succeeded as a scientist and failed just as an entrepreneur. He loathes being compared to others—to the equally fallen. “When Auden came here, there was barely anything to eat. He talks about that. I used to be hungry until more or less Christmas time, when things picked up a bit. My heroes were the old poets. That we were: a nation that read poets. In the past decade we became a nation of speculators. They were uninteresting, repulsive and extremely vulgar. Now the vulgarity has come to an end. Nobody will be hungry. We will help each other, like we always have, and we will pull ourselves out of this situation as a much better people. I hope to be around to see it.”

Knowing that his interviewer needs to get going, Kári Stefánsson stands up and stretches out his hand, ” Have a good trip”. On the way to the airport I pass by no less than seventy cranes, all motionless, all hovering over ghost neighborhoods. It was not a holiday.