Kaupthinking

Mildly tragic promotional video from Kaupthing Bank, back when Iceland was in the process of leveraging itself into, well, whatever it is now. Forget Lehmans and Bear Stearns, Kaupthing was the real poster child for the debt bubble of the mid Noughties. On Acid.

Baruch has many thoughts about this video. One concerns the regrettable prevalence of infantile thinking in business discourse: “You can. If you Think You Can.” Well, no. Half the time, you probably shouldn’t.

The other idea Baruch has is how smart we think we are (“Thinking Beyond”) at times of great success, when oftentimes all we are doing is cruising for a massively spectacular bruising. Kaupthing was living a charmed life surfing on a wave of debt (“We thought we could grow our balance sheet. And we did. By 500% in 3 years”), confusing audacity and financial nous with reckless growth and easy credit. I met a couple of Kaupthing dudes a  few times. What struck me most was their sense of achievement; they were really proud of being involved in something special. The thought it could end so badly, and basically result in the ruin their country, could never have crossed their minds.

Baruch is having a fine run at the moment, as are the markets. This makes him stop and worry: is he Kaupthinking? Are we Kaupthinking now? I don’t think so; one guesses Kaupthinking properly comes at the end of periods of persistent prosperity, not after periods of existential crisis. That said, the only time we can be sure we are not Kaupthinking is when we are not actually doing very well. This should be a source of comfort, one supposes.

“Kaupthinking is beyond normal thinking”. It should be, but is it really?

HT Lara Hanna Einarsdottir, queen of the Icelandic blogosphere, apparently. And my mate Konrad.

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2 responses to “Kaupthinking

  1. the plunge at the end of the vid was truly prescient!

  2. Excellent site, keep up the good work