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Quote:
Originally Posted by
pete
One of the experts said NCB stockbroker estimate the actual cost to Irish taxpayers of state guarantee could be E14billion or 25% of single years GNP. This was disputed by expert no.2
Heard them on the Last Word with is, reckoning that worse case scenario is that banks assests over valued by 3.5%, which if they're into developers as much as everyone thinks seems low to me.
Of course, a stokebroker might be considered a vested interest in all this, which I was extremely disappointed in Matt Cooper not at least putting that fact out there.
Quote:
Originally Posted by geysir
Its time for the Government to kick Bank ass, those who come looking for taxpayers money should be squeezed within an inch of its life in order to safeguard taxpayers money.
You would expect so, but I can't see a Government that has been constantly bailed out politically by "missing" bank records going very hard on the banks.
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On a slightly more humorous note, the Brits are absolutely up in arms at what Ireland has done, as apparently there are already seriously large flows of deposits being withdrawn from British-owned banks in Ireland and even British banks in Britain into Irish owned institutions, including the British Post Office bank (which is run in a joint venture with BoI).
I've heard anecdotally that Northern Irish and English branches of Irish institutions are jammed with people opening accounts.
Payback for the 800 years of oppression starts here :D
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The bill passed with 18 No votes as only Labour voted against.
Why is the government not guaranteeing the deposits & loans of foreign owned Irish banks (with Irish customers) but is guaranteeing Irish bank branches abroad (with non-Irish customers) ? When you read it like that the government is helping Irish banks first & not their Irish customers. :confused:
Mary Hanafin described this as "the bravest decision in a long time" when surely it is the biggest gamble in a long time.
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Quote:
Originally Posted by
pete
Why is the government not guaranteeing the deposits & loans of foreign owned Irish banks (with Irish customers) but is guaranteeing Irish bank branches abroad (with non-Irish customers) ? When you read it like that the government is helping Irish banks first & not their Irish customers. :confused:
Because the aim of the Act is to stabilise the Irish banking sector by opening up the interbank funding market. It has nothing to do with customers (the proportion of "customers" impacted is minimal).
If they didn't do what they did on Monday night, there wouldn't have been an Irish banking sector to help.
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Quote:
Originally Posted by
OneRedArmy
Of course the Government and the banks were responsible, but all this talk of "joe public" losing out to the greedy bankers sticks in my craw. Joe Public piled into buy-to-let property like there was no tomorrow because of a simple human failing, greed. The same failing that affected the banks.
Yes the nature of greed is the same for everybody.
The effects of Corporate/ speculator greed is more damaging in effect by multiples to society than that joe public guy..
When a bank/institution removes its normal checks and balances and advertise/push those services they are responsible for spreading/propagating the greed. Selling a service akin to a pyramid scheme.
Yes people fall for it in the same way they fall for a pyramid scheme.
But what part has that joe public in the greater damaging schemes of corporate/speculator borrowing to invest in the exaggerated current values and future profits of companies/schemes.
Joe public was only a pawn in the scheme.
It is only some of the people have no right to complain.
When I bought my house it was about 3 times my annual salary, my kids atm would have to pay 12 to 15 times annual salary for something similar.
The most of the damage is experienced by people who did not live it up, who acted responsibility and more damage in proportion is experienced by lower income people.
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But corporate culture, left unregulated or unsupervised, will only ever be reflective of underlying individual morals. The whole idea of corporations having more moral responsibility than individuals is unrealistic.
Thats why we rely on regulations and supervision of adherence to these regulations.
That definitely failed, and failed globally, not just in Ireland.
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I don't know OneRedArmy, if people came under pressure to take more money than they needed like we did when we were going for our mortgage, I don't think you can put it down purely to individual morals. Can people sue for missold mortgages in Ireland like you can in the UK?
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Quote:
Originally Posted by
geysir
When I bought my house it was about 3 times my annual salary, my kids atm would have to pay 12 to 15 times annual salary for something similar.
I am not sure if that is relevant as interest rates might have been 15% which we are unlikely to ever see again. 5% is probably a good realistic rate.
When I got my mortgage in 2001 the Bank were very strict on the 3 time salary issue but sometime they changed this. My brother got mortgage a couple of years ago & the test seemed to be if he could afford if interest rate increased by 1%. I don't know what the best test is but 3 times salary was unrealistic.
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Just listened to what masqueraded as a debate on both The Right Hook and Last Word shows :eek::rolleyes:
Lets forget about the "ordinary man on the street" for a minute. What happened happened not because of normal residential lending issues. Arrears remain very low and although unemployment is worrying, if rates remain steady then arrears shouldn't climb hugely.
The liquidity crisis happened because fears around US subprime (which impacted Irish banks not a jot, they weren't part of that pyramid scheme) were transferred to fears around property development and investment in Ireland. These fears are absolutely realistic IMHO, there has been an impending bloodbath here for 12 months+ as demand dried up. But these transactions involved two or more parties, investor/developers and banks, both out to make a profit. Both are and will feel the pain and so they should.
Secondly, everyone is bandying around E400bn as if its second nature. NOBODY knows how this is going to look. I'd wager it hasn't cost the Government a cent to date, or worst case they had to make one payment to one counterparty on behalf of one bank on Monday (or so the rumour goes). A guarantee is only that, a guarantee to step in, until its actually called.
Nobody comes out of this with much credit, but I would expect a much more rigorous and pro-active Financial Regulator to emerge out of the end of this.
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Lets all send him a card.
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Quote:
Originally Posted by
eamo1
A friend of mine missed 2/3 payments on a student loan a few years ago and because of that he was refused a car loan.So you could say he made 2/3 "mistakes".The bank chiefs however get a whopping bailout and help when they make other related mistakes.Ill tell you if i dont get approved for a loan in a few weeks time after similarly missing 2/3 payments when i was a student(all of 3 years ago) there'll be war.
Hmmm... do you think you have some God given right to get a car loan?
Personall if I were a bank manager I would not give you a loan untill you had paid off your other loan(s). Actually I would not give you a loan at all, well not for a car anyway. If you want a car you can save up for one, if you can't do that, well your're not credit worthy anyway. I have never had a loan for anything apart from my house, which was pretty much unavoidable. You can get a car for a few hundred euro, if you can't afford that get a bicycle!!
Anyway I can tell you now your chances of getting a car loan are pretty much zilch so you better start stocking up on weaponary for your 'car war'.
Most banks have not got enough money to pay for next weeks loo paper never mind a rust bucket.
All the financial crisisses around the world are due to irresponsible lending which has been going on for years. If I was a bank manager I would not have lent a penny on houses in the last 8 years or so as it was obvious they were grossly overpriced, obviously I am not a bank manager because I am not a corrupt irresponsible idiot, so I would not 'fit in'. I can also add up so I would be ruled out on those grounds too.
So you won't get a car loan but you will be paying for a car, other people's cars that is, and houses too, in higher taxes due to the the governments bail out of the banks irresponsible lending.
To many people have been living on credit for too long and it looks like that
particular bubble has burst, and won't be back for a long time, hopefully.
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On the Government scheme to under-right the 6 banks. If any member of those banks are found to have bought shares in banks immediately before the announcement and at a time that they would have been aware of the scheme, then I believe they should not just lose their jobs, but they should face a criminal investigation.
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Quote:
Originally Posted by
OneRedArmy
But corporate culture, left unregulated or unsupervised, will only ever be reflective of underlying individual morals. The whole idea of corporations having more moral responsibility than individuals is unrealistic.
Thats why we rely on regulations and supervision of adherence to these regulations.
That definitely failed, and failed globally, not just in Ireland.
The beauty is that those responsible in the banks have no liability afterall it is not their money the were flushing down the bog. They will be all right, their massive 'performance' bonuses will keep them going for a long time.
If they were really paid according to their performance they would be lined up against a wall and shot.
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Quote:
Originally Posted by
tricky_colour
The beauty is that those responsible in the banks have no liability afterall it is not their money the were flushing down the bog. They will be all right, their massive 'performance' bonuses will keep them going for a long time.
If they were really paid according to their performance they would be lined up against a wall and shot.
Irish Nationwide Gaffe is as stupid as it is funny, you just know by the name alone that Michael Fingleton Jr is a Grade A1 A-hole
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Not surprised at Nationwide, glorified piggy bank, run by an arrogant so and so who has been in charge for 40 years, with a dose of nepotism thrown in.
He could've got every member 15k 2 years ago but decided that wasn't enough.
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Pathetic actions by Irish Nationwide. Seems fairly obvious how Junior got his job.
Quote:
“I will have no tolerance for any financial institution which seeks to exploit competitive advantage from this guarantee”, Mr Lenihan said on Wednesday.
Empty words? Unless emails or other communication leaked how will we know. The Financial Regulator has no powers anyway.
Saw small bit of FinReg on Prime Time last night. He could be a good politician the way he avoided questions. He kept saying he was convinced Irish banks had the equity to cover their losses yet he could not even estimate what their liability was. How can he say everything is ok if he has no idea what the exposure is? :rolleyes:
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Quote:
Originally Posted by
pete
When I got my mortgage in 2001 the Bank were very strict on the 3 time salary issue but sometime they changed this. My brother got mortgage a couple of years ago & the test seemed to be if he could afford if interest rate increased by 1%. I don't know what the best test is but 3 times salary was unrealistic.
Sounds like you just got in on time Pete.
Anyway, I am talking about the rise in the cost of buying a house in relation to an annual salary, not the change in criteria for deciding what mortgage you can get.
Housing prices have risen, by multiples in relation to income earned, since early 1970's, from a steady rise to crazy.
That is a serious problem now, for many of those first time buyers (from the past 5 years?) making off payments on a house loan the size of an elephant.
Quote:
I am not sure if that is relevant as interest rates might have been 15% which we are unlikely to ever see again. 5% is probably a good realistic rate.
Mortgage interest rates were 4.25% to 4.9% when the price of a house was 3 times a teachers annual salary
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Well lads and lassies, I have seen the future effects of the beginning of this depression.
This injection of cash into Banks around the world won't put out the fire of depression.
It is an impossibility.
Prepare as best you can.
Reduce your exposure as best you can.
Ask around for advice on what you can do for your own situation
Even if this inevitable collapse was slowed down, the onward effect of what has been lost would roll on for ages.
But there is no sign of it slowing down, there is no solution. The US general election will be about which monkey is sitting in the chair witnessing all the drama for the next 4 years.
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Quote:
Originally Posted by
geysir
Well lads and lassies, I have seen the future effects of the beginning of this depression.
This injection of cash into Banks around the world won't put out the fire of depression.
It is an impossibility.
Prepare as best you can.
Reduce your exposure as best you can.
Ask around for advice on what you can do for your own situation
Even if this inevitable collapse was slowed down, the onward effect of what has been lost would roll on for ages.
But there is no sign of it slowing down, there is no solution. The US general election will be about which monkey is sitting in the chair witnessing all the drama for the next 4 years.
What are you talking about Nostradamus?
That the Western world is entering a period of recession?
Hardly groundbreaking news I would've thought.
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Quote:
Originally Posted by
pete
When I got my mortgage in 2001 the Bank were very strict on the 3 time salary issue but sometime they changed this. My brother got mortgage a couple of years ago & the test seemed to be if he could afford if interest rate increased by 1%. I don't know what the best test is but 3 times salary was unrealistic.
If that was the case it is an absolute joke.
It is all the fault of house prices which are now overvalued and have been ever since 3 times your combined salary and a 25 year mortgage couldnt get you on the property ladder. Everything stems from this, people who wanted on the property ladder needed higher salaries to fund higher mortages which drove up costs.
3 times your combined salary is about what the banks should be lending and a 25 year mortgage. The fact that this would hardly buy a garden shed is the problem.
I genuniely feel for those who have borrowed money of parents, and are mortaged up to the hilt on the first house they have bought with no prospect of getting it back.
A missed opportunity and I dont think history will be too kind on the governement in the last 10 years
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IIRC the mandatory stress test (mandated by FinReg) for mortgage affordability is a rate rise of 2% (not 1% Pete).
Not only was this probably not high enough, but its accuracy is also questionable given the economy with the truth that people tend to fill in on their outgoings ("forgetting" to mention personal loans and other commitments which impact monthly affordability significantly). As Macy said above, brokers and banks in many cases encouraged applicants minimise their outgoings in order to get a larged approved amount.
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Quote:
Originally Posted by
OneRedArmy
What are you talking about Nostradamus?
That the Western world is entering a period of recession?
Hardly groundbreaking news I would've thought.
Not Nostradumus you smart alec:rolleyes:
Living in your future, as domiciled in an exposed economy now, witnessing the early effects of an economic collapse, that Irish people just can't imagine yet.
Quote:
That the Western world is entering a period of recession?
Recession sounds a mild world to explain an economic collapse.
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Quote:
Originally Posted by
geysir
Not Nostradumus you smart alec:rolleyes:
Living in your future, as domiciled in an exposed economy now, witnessing the early effects of an economic collapse, that Irish people just can't imagine yet.
Recession sounds a mild world to explain an economic collapse.
I presume you're talking about Iceland? Not sure its a valid comparison as the only valid comparison is size. You are a small, very closed economy, we are a small very open economy.
Also, can you quantify the difference between a recession and a collapse? Is it GDP, asset prices etc. and what level of fall etc. etc.?
Suggest you phone Joe Duffy anyway, it sounds like something he may be interested in.
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Quote:
Originally Posted by
OneRedArmy
IIRC the mandatory stress test (mandated by FinReg) for mortgage affordability is a rate rise of 2% (not 1% Pete).
I am sure that is what was used. I am not aware of full details. I never remember affordability test when I got a mortgage all I remember was mortgage was lower than rent & I wasn't paying huge rent.
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Quote:
Originally Posted by
pete
I am sure that is what was used. I am not aware of full details. I never remember affordability test when I got a mortgage all I remember was mortgage was lower than rent & I wasn't paying huge rent.
Surely that was the affordability test? You obviously had to provide bank statements etc. We (missus and me) had to go through a fair bit of paper work before being approved (in 2003). Mortgage lady told us the fact that ourr repayments were lower than the rent we were paying was a factor
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Quote:
Originally Posted by
Dodge
Mortgage lady told us the fact that ourr repayments were lower than the rent we were paying was a factor
Don't remember that coming up as an issue. Money from rented room was allowed though. There was certainly no discussion on affect of interest rate increase. All I remember was 3 times rules seemed very restrictive. This was pre dotcom crash so probably wouldn't have touched me in 2002.
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Quote:
Originally Posted by
pete
Don't remember that coming up as an issue. Money from rented room was allowed though. There was certainly no discussion on affect of interest rate increase. All I remember was 3 times rules seemed very restrictive. This was pre dotcom crash so probably wouldn't have touched me in 2002.
Pete they wouldn't necessarily discuss it with you. Banks tend not to discuss their credit policies.
But in terms of timing you may well have come in before the mandatory 2% stress.
In terms of simple salary multiples vs monthly affordability measure, its the latter that has tended to predominate over the last 5 years. Its a more accurate measure, but obviously relies on the accuracy of the information provided. If people understate their monthly commitments then it is likely they would be loaned a larger amount, which obviously is harder to repay in full if circumstances change.
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Quote:
Originally Posted by
OneRedArmy
I presume you're talking about Iceland? Not sure its a valid comparison as the only valid comparison is size. You are a small, very closed economy, we are a small very open economy.
Also, can you quantify the difference between a recession and a collapse? Is it GDP, asset prices etc. and what level of fall etc. etc.?
Suggest you phone Joe Duffy anyway, it sounds like something he may be interested in.
Ahh, the comfort of smugness ;)
First they said it was sub-prime mortgage exposure.
Even the Iceland banks regarded them as way too risky.
Then they said, ahh it's only the Iceland State with its Banks running an alternate economy ten times the size of the national GDP.
Probably you are well aware of the difference between the criteria used and argued about to differentiate between a recession and depression. That's where Reagan cooked Jimmy Carter's campaign:)
Depression, the GDP declines >10%
add in the collapse of the consumer market as more and more people stagger under the weight of trying to pay their house loans, more people coping with decreased or no purchasing capacity.
Consumer production, retail, all connected economic activity etc etc are all geared up for the peak.
Then add unemployment.
The most alarming aspects of this economic deterioration is
that unemployment levels have already risen greatly and continue to
rise. How many people lost their jobs today?
How many people are likely to lose their jobs in the next months?
Collapse of Banks, collapse of the markets. How many banks at this moment in time are tottering on the brink?
The markets in freefall today?
Fixes? I forgot about the fixes, bailout, injection of cash etc etc are mere artificial props.
Can you please give your optimistic assesment of the viability of these fixes? How about an assessment of the effect of the $700bn bailout in the US.
It is inevitable that Capitalist-funded politicians will posture in respect to some sort of economic bailout. And it is equally inevitable that any economic bailout that is put into place by capitalist-funded politicians will tend
to put money in the pockets of the rich than the pockets of the poor.
Recessions and slumps, we had a good few. This is different to anything that happened since the 1930's.
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Peter Power's complete lack of knowledge on Q&A last night was astounding. He said that the Bank's liabilities weren't guaranteed!!!
He said that the government wouldn't take equity stake sin the banks, it'd be too risky - eh, hello, we already have the risk
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Quote:
Originally Posted by
OneRedArmy
If people understate their monthly commitments then it is likely they would be loaned a larger amount, which obviously is harder to repay in full if circumstances change.
People were encouraged to understate their monthly committments. We were told it was "a pity that your credit union appears on your payslip as we have to ask about that now".
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Quote:
Originally Posted by
Macy
People were encouraged to understate their monthly committments. We were told it was "a pity that your credit union appears on your payslip as we have to ask about that now".
In fairness our bank weren't like that at all. Pretty helpful but not to that point
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http://www.guardian.co.uk/business/feedarticle/7845410
"The European Union's competition chief said on Monday Irish proposals to guarantee bank deposits could be tweaked to make them acceptable, while similar plans by Germany appeared to pose few problems."
Why is that I wonder?? :confused::rolleyes:
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Quote:
Originally Posted by
mypost
http://www.guardian.co.uk/business/feedarticle/7845410
"The European Union's competition chief said on Monday
Irish proposals to guarantee bank deposits
could be tweaked to make them acceptable, while
similar plans by Germany appeared to pose few problems."
Why is that I wonder?? :confused::rolleyes:
Its clearly because its because we are a small country and Europe is being mean to us and nothing to do with the detail of the proposals, which nobody, not least you, has read in any case...
If only life was as simple as in Mypost-world.
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Quote:
Originally Posted by
mypost
http://www.guardian.co.uk/business/feedarticle/7845410
"The European Union's competition chief said on Monday
Irish proposals to guarantee bank deposits
could be tweaked to make them acceptable, while
similar plans by Germany appeared to pose few problems."
Why is that I wonder?? :confused::rolleyes:
I am open to correction but I believe they want Ireland to scale back from unlimited deposit guarantee. Back to maybe 250k. Again not certain but I think Germany are only guaranteeing deposits & not Bank loans.
Seems clear that some bank staff (e.g. Irish Nationwide) too keen to shove the guarantees in the face of European competitors to realise what a sweet deal they got. A couple of small worst performing banks going to the wall or forced to merge with someone else may not be a bad thing.
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Fianna Fail are the government funded by developers and builders and are duty bound to offer up honest taxpayers money to prevent them from having to sell off any of their assets.
Maybe the Germans have not exactly got the same priorities.
Icesave in England has closed its internet till.
150k savers there, totalling about £4bn, cannot withdraw their money
The parent bank, Landsbanki, has to pay out about €700m servicing in the next 12 months. But has liquid assets of £7bn in GB.
The liquid assets by banking standards are good quality. I don't know how much they can get for those assets in a sell off or firesale.
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Quote:
Originally Posted by
OneRedArmy
Its clearly because its because we are a small country and Europe is being mean to us and nothing to do with the detail of the proposals, which nobody, not least you, has read in any case...
If only life was as simple as in Mypost-world.
To me it looks more like some other countries got caught out by the two Brians. They're probably being asked at home why their plans don't look as good as ours. They're talking their way out of the hole by saying we're breaking european rules, while they draw up laws to copy us behind the scenes. Saying that the Irish laws need a few tweaks then helps to explain away the contradiction.
We need to remember that foreign countries are run by politicians as well.
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Quote:
Originally Posted by
Bald Student
To me it looks more like some other countries got caught out by the two Brians. They're probably being asked at home why their plans don't look as good as ours..
I think its more a case of foreign banks moaning that they have a competitive disadvantage. With a state guarantee Irish banks can get loans from any one they wish.
I think I heard that Irish Banks are supposed to have 80 billion greater assets than liabilities. Not sure if that is the face value of those assets or discounted.
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Quote:
Originally Posted by
pete
I think its more a case of foreign banks moaning that they have a competitive disadvantage.
Had a competitive advantage. Most european countries have now gone with similar plans to us, to the point that we're not seen as trying to get one over on them now.
The actual details are irrelevant
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I am outraged that more people are not out on the streets calling for the heads of these major banks for overseeing the shoddy lending practices that have contributed to the mess we're in! Think of it this way they are to blame for the pain you are all going to feel in next weeks budget and guess what when rates go down they ain't going to pass it on to you no they are going to charge you for the Bailout ,Injustice? you betcha so grab your hurley shovel or even better a scythe and look for Drumm, Goggin etc.. there heads should be made to roll...
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Quote:
Originally Posted by
Reality Bites
I am outraged that more people are not out on the streets calling for the heads of these major banks
Where you protesting? I might join
