Financial Crisis

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Originally Posted by Macy

On what, as what I saw on Prime Time (albeit interupted by a teething baby), it was O'Dea that was fumbling and not being able to answer specifics? It's only right that the opposition point out who helped fuel the bubble - Government and bankers.

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Macy, you won't get me to defend O'Dea, or the rest of the Government! :D

Burton really didn't understand what she was talking about, which I suppose was understandable.

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.

The whole idea being peddled in the media that banks and Government should be the sole moral guardian for the whole state is ridiculous.

The country got to this position because the majority supported decisions, either explicitly or implicitly and as is usual when times are good libertarianism and free market doctrines are expoused by people wanting the good times to roll on and then when it goes down the pan the very same people turn into nanny-staters, with wailing and gnashing of teeth and "why didn't the instutitions stop me?!""....

Obviously not everyone bought into this view (I know you didn't), but to the whiners who lived it up in the good times, as we say in Derry, "take yer oil".

Any deal that has the Banks purring is not a good deal for the people.
The Irish Gov. vote of confidence to underwrite all the top banks would make me very very nervous.
To me it looks like the State will lose bargaining position when it comes to taking shares as equity.
The people are going to take some serious hits.

I would prefer to underwrite the solid Banks and slaughter the one or possibly two reckless Banks.

I don't think there is a proper understanding of other possibilites of Equity Investment by the State.
The State provides capital and in return takes shares in the bank

The Iceland Gov. took equity (from one bank. Glitner) worth €2.8bn for €700m.
After the negotiations, the Bank's Board complained that they had been kicked around the floor, battered black and blue, pressed against the wall and under extreme pain were forced to sign the deal.
They called it the great bank robbery.
The State took over 75% of the total shares as equity, and the share price naturally drops 75%.
Immediate losers are the shareholders of whom some 1 or 2% are employees who received shares as bonus payments. Tough, but I am not that brokenhearted over top Bank employees losing a few eggs.
Nor over the loss to the large shareholders who ran the bank.

The next day, the share price rose by about 14%, means the Gov shares rose by €140m
With a bit of luck, the equity investment by the State will not prove to be a burden on taxpayers.



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Originally Posted by geysir

I would prefer to underwrite the solid Banks and slaughter the one or possibly two reckless Banks.
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What would you call the solid Banks? AIB and BOI were in big trouble if this thing didnt go thru. We were told not to place money with any of the above banks as wwas too risky.

I sent an email to my TDs in Cork East last night asking them to vote against the bill.

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Sir,

I'm a contituent from Ladysbridge. Please vote against the bailout bill
that will be put before you tomorrow, rushed legislation is ALWAYS bad
legislation.

I'll be watching your voting record with interest, it will affect mine in
future.

Yours sincerely,
Adam Beecher

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The only one that's replied so far is David Stanton. His reply seems to be saying "we know best" but "I might not vote anyway".

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Dear Adam,

Thank you for your email. We are all very concerned at the current banking
situation and the need to provide adequate, extensive and robust
legislation to protect any measures being taken. If the banking system
were to collapse, this would have major repercussions for everyone in the
country.
You may be aware that no vote is being called on the Bill today as the
debate is ongoing with Committee Stage being taken in the Dail. This
procedure gives the opposition parties a chance to put forward amendments
to the proposed legislation. I may not, in fact, get an opportunitty to
vote on the Bill at all, if a vote is not called.
Finally, Richard Bruton TD, is out Fine Gael spokesperson for Finance and
is responsible for tabling our amendments at committee stage. I can assure
you that he is very knowledgeable and well briefed on the issue and the
legislation put forward.

Best regards,
David Stanton TD

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Originally Posted by Billsthoughts

What would you call the solid Banks? AIB and BOI were in big trouble if this thing didnt go thru. We were told not to place money with any of the above banks as wwas too risky.

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Who told you that?

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Originally Posted by dahamsta

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So Richard Bruton is knowledgeable and well briefed....... God help us.

The legislation itself has more holes than a sieve and appears to leave all the detail to administrative notice.

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Originally Posted by OneRedArmy

So Richard Bruton is knowledgeable and well briefed....... God help us.

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It's all relative - compared to all the cabinet, and most of the rest of the Dail, I'd say he is.

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Originally Posted by Macy

It's all relative - compared to all the cabinet, and most of the rest of the Dail, I'd say he is.

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Whilst I'm not going to defend the knowledge of the Government (as I'd say its on a par with the rest of the Oireachtas, ie limited), in fairness, the Government do have the advantage of having the Central Bank and the Dept of Finance advising them.

Who are the opposition relying on for technical advice?

I do think Adam's point around rushed legislation is fair though.

Dahamsta, I don't agree with your lobbying local TDs with negative responses to Government bailout, I have been a stern critic of both Lenihan and Cowen, but their decisive acts over the last two weeks have impressed me, It was vital that the Government stepped in to back up the Banks, if they didn't the Irish government faced "total chaos" and a failure of the financial system.

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Originally Posted by OneRedArmy

Who told you that?
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Head of finance/Clients,(not our own money - client money)

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Originally Posted by Billsthoughts

Head of finance/Clients,(not our own money - client money)

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Interesting. Did he say anything about Anglo, Nationwide or PTSB?

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Originally Posted by OneRedArmy

Whilst I'm not going to defend the knowledge of the Government (as I'd say its on a par with the rest of the Oireachtas, ie limited), in fairness, the Government do have the advantage of having the Central Bank and the Dept of Finance advising them.

Who are the opposition relying on for technical advice?

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Isn't Bruton actually economist? The Central Bank and Dept of Finance presumably were advising the Government whilst they were getting us in this mess in the first place, so not exactly a ringing endorsement (either the Government was following their advice, or ignoring it - either way doesn't bode well for now).

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Originally Posted by OneRedArmy

I do think Adam's point around rushed legislation is fair though.

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Goes without saying, especially when it turns out to be as flimsy and non-specific as this one. The Devil is in the detail, only it appears the Government are deliberately leaving the detail out!

Depends who the Gov are batting for.
I'm fed up listening to some moronic TD's on radio going on about protecting the interests of the Bank shareholders as if they were little frail old people depending on this nest egg.

There is no one bailout solution.
The quality of any government intervention depends on the terms of the agreement.
The terms can vary. 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.

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Originally Posted by Macy

The Devil is in the detail, only it appears the Government are deliberately leaving the detail out!

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More worrying, I'd say they haven't got that far yet.

If reports are true and at least one bank was hours away from falling on Monday night, they obviously came up with the idea and decided that the detail could be worked out later.

I'd be staggered if they are anywhere near the detail yet, unless they've translated the Swedish plan from the 90's on which all this is based.

Bruton is a former member of the ESRI so has the knowledge but on that basis is as up to his neck in it as Government.

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Originally Posted by OneRedArmy

Interesting. Did he say anything about Anglo, Nationwide or PTSB?

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only one he(treasury manager 40 yrs exp) said they were told to place deposits with were HBOS. said the day HBOS was taken over that nationwide and anglo look in trouble and last monday I was asking him and he said BOI/AIB in same boat now. AAA rating taken away. Think gov decision changes that.

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Originally Posted by Billsthoughts

only one he(treasury manager 40 yrs exp) said they were told to place deposits with were HBOS. said the day HBOS was taken over that nationwide and anglo look in trouble and last monday I was asking him and he said BOI/AIB in same boat now. AAA rating taken away. Think gov decision changes that.

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AIB & BoI never had a AAA rating. Around A+/AA.

S&P maintained the same ratings yesterday.

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Originally Posted by OneRedArmy

AIB & BoI never had a AAA rating. Around A+/AA.

S&P maintained the same ratings yesterday.

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well he said their rating had changed and we werent doing business with them.

Good debate with Vincent Browne on TV 3 tonight.

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

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.

Where do we stand with this now? Did it go to a vote today? The news coverage is very thin on the ground bar saying that now they're talking about covering foreign owned banks too. FFS.

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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.

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No offence but thats a ridiculous comparison. Its more akin to payment protection insurance that the banks are getting. Which I presume you didn't have?