2011 a record year in Iceland

… for bankruptcies. I wrote about the GDP growth in Iceland and wondered where the growth was coming from. I was right, 2011 was a record year for Corporate Bankruptcies since the collapse of the financial system and we have data only until November. What is more interesting is that for the first time in the last 11 years the number of companies formed (1533) has never been closer to the number of companies that were insolvent (1427).
I think we should also look at wage and employment numbers to see if that is driving the growth. The second graph is the total labor force as can been seen that has dropped since the financial collapse. The third graph is the unemployment %, 2011 is my estimate as we have data only till the 3rd quarter of 2011. I estimate 7.25% unemployment for the whole year, please don’t hold me to it because I don’t believe in estimates. As can be seen the macro variables don’t look all that great for a GDP growth but IMF, the Central Bank of Iceland and the Ministry of Finance all say there is GDP growth so we all just have to take their word for it. I can say one thing the sentiments are improving, I saw the following news published by one of the investment companies Eyrir Investment, that they have successfully convinced a Pension fund to invest in them and they have started a new venture capital focused fund called Eyrir sprotar slhf. This is very encouraging. 

“Eyrir Invest ehf. has today decided to increase the number of shares in the company by approximately 10% by selling 101 million new shares at the price of 24.25 ISK. The total number of shares after the issue is 1,108,681,220 each share is 1 ISK of nominal value. The new shares will be purchased by Lífeyrissjóður verzlunarmanna (The Pension Fund of Commerse).