In the opening scene of one of our all-time favorite TV series, mob boss Tony Soprano is chasing a guy through a Jersey parking lot with a baseball bat. The guy owes Tony some vigorish.
Vigorish is local vernacular for the weekly interest payments that loan sharks charge to their borrower community. These payments don’t actually reduce the amount owed, they are kind of an ”insurance policy” — as in, you pay the vig and you can keep your kneecaps for another week.
The global financial catastrophe took an interesting turn this week, when Iceland became the first country to officially go belly up. With the country’s banks melting like salt in its famous volcanic hot springs and its currency, the krona, collapsing, Iceland sent out a financial 911 call to Europe’s central bankers.
The Europeans, busy arguing over whether the continent’s financial Maginot Line will be located in Britain or Germany, told their insolvent cousins in Iceland to call back later.
So the government of Iceland did what anyone desperate for cash might do. No, they didn’t sell grandma’s wedding ring to the local metals trader, now offering almost $900 an ounce for gold. They asked Boris and Natasha to give them Vladimir Putin’s phone number.
After some brief consultations with their new friend in Moscow, Iceland’s leaders hastily announced that oil-rich Russia had agreed to loan the country $5.4 billion, roughly the equivalent of a third of Iceland’s GDP. Prime Minister Geir Haarde said he had no choice: Iceland’s banks had run up debts that totaled 12 times the size of the country’s economy.
Not so fast, said the Russians.
Deputy Finance Minister Dmitry Pankin cleared his throat in Moscow and informed the world that no decision has been taken on the loan to Iceland, though his government ”may consider one in theory.” This requires ”the approval of many agencies [in the Russian government] and is not a decision that can be made quickly,” Pankin added.
Here’s a ”theory:” the agencies that must approve this decision are all named Putin, and the decision will be made as fast as the Russian navy can open its new base in Reykjavik.
Boris gets the volcanic waste management franchise and Natasha will be the executive director of Iceland’s new Museum of Trucking and Industry.