All the way from icy Norway, we have Townships caught up in international credit crisis.
Several small townships in northern Norway went along with a securities firm's advice and invested as much as NOK 4 billion in complicated American commercial paper sold by Citibank. They now risk losing it all.
The township politicians are both embarrassed and angry at the financial advisers who they now claim led them astray. "They think we're a bunch of small-town fools," one local mayor told newspaper Dagens Næringsliv.
Excuse me, you are a bunch of small-town fools.
Like yokels everywhere, you were probably wined and dined by Citibank, and you fell for the bait.
Terra officials say they're sorry about the losses, but claim the townships are viewed as "professional players" in the financial markets and must also take responsibility "for the investments they choose to make."
The politicians claim they "asked all the questions we could" about risk levels, not least those tied to currency valuation. The US dollar is also extremely weak at present against the Norwegian kroner, reducing relative values of US holdings.
While the finger-pointing continues, the townships are obligated to put what some fear is good money after bad. Norwegian townships that are suddenly relatively wealthy on energy revenues are also learning to be more cautious, as they face constant, complicated investment offers from foreign institutions.
Experience keeps a dear school but fools will learn in no other.
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