If folks in America thought they woke up to tough headlines, try having breakfast in Reykjavik. The Wall Street Journal went with "Iceland Risks Bankruptcy, Leader Says" -- and yes, the leader is talking about whole nation.

Which brings us to the morning note from Win Thin, currency strategist for Brown Brothers Harriman. Thin notes that the International Monetary Fund is on the case:

We note that the IMF is one of the few institutions right now that has liquidity, and most likely will start to parcel out that liquidity as this crisis deepens. As of March 31 2008, the IMF had $209.5 billion in loanable funds and only $16.1 billion in outstanding loans to 64 countries, much of that to Turkey. As such, the IMF is open for business, and we are surprised that more countries have not approached the IMF for assistance during this turbulent period. It's a win-win situation, and could put the IMF back in black.

In a quick call, Thin explains a little more -- especially that part about putting the IMF back in black. The IMF makes money by lending money to countries that need help, he says. One look at that $209.5 billion on hand, versus the $16.1 billion on loan, and you can see the IMF isn't raking in the interest. "If it's not lending, it's not making any money," he says.


categories: Europe's Financial Crisis

11:37 - October 7, 2008

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