Iceland is for sale — on ebay.

It has great scenery and wildlife but the financial situation is in need of repair and a buyer must collect in person.

Bidding started at 99 pence but had reached 10 million pounds ($17.28 million) by mid-morning on Friday.

Globally renowned singer Bjork was “not included” in the sale, according to the notice, but there were nonetheless 26 anonymous bidders and 84 bids.

“Located in the mid-Atlantic ridge in the North Atlantic Ocean, Iceland will provide the winning bidder with — a habitable environment, Icelandic Horses and admittedly a somewhat sketchy financial situation,” the notice reads.

Bidders’ questions included: “Do you offer volcano/earthquake insurance?”, “Is it possible that my payment will be frozen?”, “Is this the tip of the iceberg?” and “Will you accept C.O.D. as a form of payment?”

– By Carolyn Cohn

Nobody knows quite what the landscape for financial services will be after the mayhem of the last three weeks. There is much talk of the investment banking model being dead in the water and swingeing regulation aimed at firmly bolting the door of a horseless stable, but few are ready to hazard at the details.

One aspect on which we have seen almost universal agreement, however, is that investors have cottoned onto the immense risk of bankrolling investments they don’t quite understand. The trend for increasing pension fund investments in alternative strategies starts to look like a busted flush, and you have to question whether demand for the UK’s planned retail funds of hedge funds will sustain the new industry.

Schroders CIO Alan Brown told us this week: “People will be taking a long hard look at complex financial products.”

“If you see a creative investment banker head towards you, you are likely to develop short arms and deep pockets.”

It’s clearly an issue which encourages investors towards the poetic; Colin Melvin, CEO at the equity ownership service at Hermes told a sustainable investment briefing on Wednesday: “What we’ve seen perhaps is a multiplicity or complexity of investment products and services which has grown up in order to maintain unusual profitability of the industry. As you shine a light on it, it will simper off into the dark again.”

And Robert Talbut, CIO of Royal London Asset Management lends further weight to the argument.

He told us: “We see a return to simplicity in products - complexity is out. The absolute return-type product is significantly under threat - clients will be wary of the opacity and prime broking is getting much harder to come by.”

Some industry players talk about a return to favour for old-fashioned, long-only balanced funds, with some interest for high-grade investment bonds, or perhaps global equities. The trouble at the moment is that many investors see few viable bolt holes for their cash. Just ask Andrew Chapman, pensions manager at the 2 billion pound John Lewis pension scheme.

“There is nowhere to hide,” he said. “This is a whole new paradigm and there are too many uncertainties out there - you make one move and you might be worse off than what you are doing now.”

 – Joel Dimmock, Claire Milhench, Raji Menon

The TED spread, or the difference between US Treasury bill and eurodollar interest rates, is an indicator of perceived credit risk in the general economy. US government Treasury bills are considered risk-free while eurodollar borrowing costs, measured by the London interbank offered rate (LIBOR), reflect the credit risk of lending to commercial banks.

When the TED spread increases it is a sign that lenders believe the risk of default on interbank loans is increasing. Interbank lenders therefore demand a higher rate of interest, or accept lower returns on safe investments such as T-bills. When the risk of banks defaults is considered to be decreasing, the TED spread decreases. The TED spread fluctuates over time but has often remained within the range of 10 and 50 basis points (0.1% and 0.5%), at least until 2007. A rising TED spread often presages a downturn in the U.S. stock market, as it indicates that liquidity is being withdrawn.

- Clive McKeef

After the collapse of Northern Rock, AIG and XL group – which sponsored Newcastle United, Manchester United and West Ham respectively — the curse of English football is getting stronger.

Today Iceland’s Landsbanki went into receivership. Its chairman Björgólfur Gudmundsson owns West Ham football club.

In November 2006, Gudmundsson, Iceland’s second richest man, led an 85 million pound buyout of the east London club in November 2006, investing another 30.5 million pounds in December 2007.

Former Thai Prime Minister Thaksin Shinawatra sold his Manchester City football club to an Abu Dhabi-based company having gone into exile in London in August on corruption charges.

Still, Thaksin did make a fat profit.

The global financial crisis is no laughing matter for many people, but it has nonetheless resurrected some dreadful puns that were popular back during the Japanese banking fiasco in the 1990s. Doing the rounds by e-mail are the following:

Sumo Bank has gone belly up; Bonsai Bank is cutting its branches; Karaoke Bank is for sale and will go for a song; Samurai Bank is soldiering on; Ninja Bank is in the black; staff at Karate Bank have got the chop; and there is something fishy up at Sushi Bank.

The recent crisis has been less fruitful. Some people started cruelly referring to Northern Rock as Northern Wreck when the British lender was nationalised and analysts have lately been toying with TARP, the Troubled Asset Relief Plan. Credit Suisse and Merrill Lynch both suggested that TARP could be a TRAP while Goldman Sachs suggested it had been TARPedoed by Congress.

Surely this crisis is big enough to get better than that? Your contributions welcome.

Macroeconomic Advisers tells clients this morning they expect “weaker growth in Q3, a deeper decline in Q4 than we previously expected, and a weak rebound in Q1 of next year will now qualify this period formally as a recession.”

U.S. unemployment rate “could well reach 7%,” the forecasting firm says, as it projects a 50 to 75 basis point easing by the Federal Reserve to address the weakening data as well as financial conditions.

Politicians are busy blaming betting in financial markets for the recent market turmoil, with Jean-Claude Juncker, chairman of euro zone finance ministers, urging investors to stop playing a “casino game” with their shares this week.

But dare-devil operators in financial markets have shown no sign of halting their innovation in financial instruments, which are enabling investors to bet on everything from Academy Award winners to space travelling.

One of the most traded contracts on trading platform Intrade is the outcome of the U.S. Presidential election, due in just over a month.

The Barack Obama contract, based on the U.S. dollar, rose 1.5 points to 62.5, with 5,857 contracts traded on Tuesday. The level is just below a record high set in mid-July.

The John McCain contract fell half a point to 37.6, having hit an all-time high only a few weeks ago.

Die-hard Hillary Clinton fans are still betting on the New York senator to win the presidential election, with the Clinton contract rising 0.4 point to 3.2.

Barack Obama contract:

The present may be pretty bleak for investors, but that has not stopped one firm from looking decidedly at the future - privatised space travel. Fortis Investments reckons space tourism will one day become all the rage with travellers willing to fork out thousands upon thousands of dollars for the adventure.

In the latest issue of Fund Expert magazine, Fortis looks at the nascent industry and reckons that the price of a space trip - roughly $200,000 to begin with - should come down substantially as a result of competition. There is already some - including Virgin Galactic, which is aiming for launch by next year, and Rocketplane, which should go up the year after.  They will start modestly, just sticking their noses out of the atmosphere.

The new industry, however, eventually should mean a boom in new employment, requiring commercial astronauts, flight attendants, tour operators and so on. But the flight operators may also be licking their lips at the prospect of getting government military and scientific research contracts. Fortis - whose Brussels headquarters coincidently is located on Avenue de l’Astronomie — reckons that a NASA flight currently costs the U.S. government $1.3 billion a pop. So outsourcing would be attractive.

To boldly go, in effect, looks set to become more than just Star Trek’s mantra and the world’s most famous split infinitive.

In these troubled times, go back to basics.

Theo Zemek, AXA Investment Managers‘ global head of fixed income, says investors should adopt “Quaker investment policies” – sober and safe investment strategies that can be explained to their grandmothers.

“Anyone who utters the word ‘hedge’, after all these CDS (failures), ought to be taken out and be shot,” the 25-year markets veteran told a media briefing.

“This is the scariest market I’ve ever seen in 25 years. The world of complex instruments, credit guarantees… That world is very much an ancient history… It’s a darn tough market. Who is left standing among our counterparties?”

Zemek said she overheard commuters on the train discussing the new preference for simplicity in investment strategy and citing Goldman Sach’s chief global economist Jim O’Neill as saying: “Anyone who thinks they understand what’s going on is guaranteed to be an idiot.”

AXA IM’s parent company AXA said last week that it has a non-material equity interest and credit exposure in Lehman Brothers (collapsed) and AIG (bailed out).

Lloyds TSB’s acquisition of HBOS will give it a supersized asset management arm with over 200 billion pounds in assets, but this new funds powerhouse will nevertheless be born somewhat inadvertently.

The combination of Lloyds’ SWIP and HBOS’s Insight will be the biggest active manager - i.e. funds that try to beat markets rather than just match them - in the UK.

Its access to Lloyds and HBOS’s huge branch network will give the funds unit a commanding position in distribution and a big slice of sales to ordinary investors.

Yet whatever the merits of the deal, it is nevertheless a deal done quickly, following the collapse in HBOS’s share price amid fears the bank was struggling to raise funds in the wholesale market.

Few in the City saw the deal coming, least of all Insight.

On its website it tells clients of its “solid foundations provided by the parentage of the HBOS Group”.