There is a saying in Tennessee, well its a saying in Texas, I'm sure its in Tennessee too. "If can't spot the sucker after your first half hour at the table you are the sucker."

But really... If bailing out all the foreign investors with the Icelandic public's money (who by and large didn't court the foreign investors in the first place) is the other option... It seems sort of obvious what a country that cares about, or pretends to care about, it's public at large (rather than just its banking elite and financial industry in general) would do.

Not saying it's 'right' or 'wrong' really, but when people invested large amounts of money overseas (into Iceland from wherever) they were gambling and hoping for a gain they couldn't get at home. Sometimes you get burned when you take risks. Sometimes you don't.