Housing Bubble Bursting

Amberman

Its a good thing to race to the bottom quickly. I think you get that. Everyones suffering is lessened in duration even if the intensity increases for a while.

DublinWriter

How Strange wrote: »

I read it yesterday Blah and have been sick to my stomach ever since which is not good when you're 7 months pregnant.

You know what? I woke up this morning, the sun was shining in the sky, the birds were singing and my wife and baby son were fine and healthy.

Contrary to what the newspapers, radio and TV would have you believe, the four horsemen of the apocalypse were not riding over the hills nor were my neighbours cracking open each other's skulls and feasting on the goo inside.

I don't think it's too much of an outrageous statement that no one in this western European country will ever go hungry or not have a roof over their heads.

steve9859

DublinWriter wrote: »

You know what? I woke up this morning, the sun was shining in the sky, the birds were singing and my wife and baby son were fine and healthy.

Contrary to what the newspapers, radio and TV would have you believe, the four horsemen of the apocalypse were not riding over the hills nor were my neighbours cracking open each other's skulls and feasting on the goo inside.

I don't think it's too much of an outrageous statement that no one in this western European country will ever go hungry or not have a roof over their heads.

+1 Best post of the week!

Amberman

DublinWriter wrote: »

You know what? I woke up this morning, the sun was shining in the sky, the birds were singing and my wife and baby son were fine and healthy.

Contrary to what the newspapers, radio and TV would have you believe, the four horsemen of the apocalypse were not riding over the hills nor were my neighbours cracking open each other's skulls and feasting on the goo inside.

I don't think it's too much of an outrageous statement that no one in this western European country will ever go hungry or not have a roof over their heads.

Yeah, we're not Argentina for heavens sake!

Gurgle

DublinWriter wrote: »

I don't think it's too much of an outrageous statement that no one in this western European country will ever go hungry or not have a roof over their heads.

We are thankfully several decades past that point, and with no danger of going back there.

If anything, this crisitunity is the cattle prod that will force us (we the nation) to sort out the systematic money-pìssing we've known about for years but didn't fix because we had billions to spare.

Viva la recession

Gurgle

Gurgle wrote: »

Viva la recession

It's not a recession! it's de-growth!

oceanclub

DublinWriter wrote: »

I don't think it's too much of an outrageous statement that no one in this western European country will ever go hungry or not have a roof over their heads.

Take a walk down any Dublin street at night and you'll see this statement is false.

Not to mention the 1,000 illegal evictions that happened last year.

P.

Amberman

I agree the "It cant happen here" argument is pervasive and gives a false sense of security.

It can happen here...and almost certainly will happen here.

Theres difference between saying that people won't go hungry and people wont die from starvation...a big difference. No one will die from hunger, no one in Argentina dies from hunger...but the diseases stemming from malnutrition are almost certainly likely to increase and at risk groups (like pensioners) life expectancy is likely to be cut in a lot of circumstances.

It happened in Argentina, which was once very wealthy...and now hundreds of thousands of kids live off rubbish tips.

Think that can't happen here? Think again.

oceanclub

Amberman wrote: »

Think that can't happen here? Think again.

But we're different!(*)

(*)Ireland's tagline since 1994.

P.

gurramok

oceanclub wrote: »

Take a walk down any Dublin street at night and you'll see this statement is false.

Not to mention the 1,000 illegal evictions that happened last year.

P.

Aren't those that get illegally evicted entitled to social housing and get emergency accommodation from the CWO while waiting on the housing list?

Also, alot of those homeless on the streets are not really homeless, they are in a business of begging. Genuine cases are the ones you see sleeping at night and some of these cannot stay in the hostels due to some addiction problems.

But as we have a ginormous amount of empties, even if all the homeless where housed in these 'free houses', we'd still have to import people to fill the vacants!

Fr0g

Caoimhín wrote: »

Sadly true.

A lot of people are asking for or hoping the IMF come in, as though they are some sort of "white knight" that will come and rescue us and maybe cut the wages and fire the muppets who got us into this disaster.

However, Ive been doing a lot of reading about the IMF lately, particularly Globalization and Its Discontents is a book published in 2002 by the 2001 Nobel laureate Joseph E. Stiglitz. Quite simply, the IMF will come in but it will be the ordinary man in the street who will get rode, not the politicians or bankers. Often the first thing they do is to privatise any state/semi-state business. Imagine a multinational company owning Coillte or Board na Mona, up to 15% of the land area of the island would then be owned by multinationals..

Bertie has been biding his time waiting in the wings...

http://www.wearechange.ie/80/

K-9

Amberman wrote: »

I agree the "It cant happen here" argument is pervasive and gives a false sense of security.

It can happen here...and almost certainly will happen here.

Theres difference between saying that people won't go hungry and people wont die from starvation...a big difference. No one will die from hunger, no one in Argentina dies from hunger...but the diseases stemming from malnutrition are almost certainly likely to increase and at risk groups (like pensioners) life expectancy is likely to be cut in a lot of circumstances.

It happened in Argentina, which was once very wealthy...and now hundreds of thousands of kids live off rubbish tips.

Think that can't happen here? Think again.

Argentina is very different to what the IMF does now.

Latvia would be a more up to date comparison and there they left mortgage arrears policy up to the Government.

IMF Survey: After Severe Recession, Stabilization in Latvia

IMF Survey online: Have efforts been made to help people pay their mortgages?
Griffiths: Increased unemployment and wage cuts have increased the need to help people stay in their homes. The government approved a scheme in 2009 that guarantees loan repayments if banks agree to restructure mortgages. The scheme freezes part of the loan for a period of two years, reduces monthly mortgage payments, and writes off part of the principal.
The IMF has worked closely with the European Commission, the government, and others throughout 2009 to make the new scheme possible. To ensure that it targets those most in need, the government intends to limit the scheme’s coverage to the primary residences of homeowners with mortgages up to L100,000.
Homeowners have also been helped by a drop in interest rates on euro-denominated loans. Most mortgages in Latvia are denominated in euros, so keeping the fixed exchange rate has also helped homeowners.
But there are trade-offs. Eventually, the government will have to decide whether this scheme is the most effective use of scarce resources.

super_furry

Just browsing through this topic again and it's utterly fascinating. Decades from now, economics students will be poring over it.

Caoimhín

super_furry wrote: »

Just browsing through this topic again and it's utterly fascinating. Decades from now, economics students will be poring over it.

More like sociological students attempting to understand collective madness.

Apart from other economic bubbles, eg; the south sea exploration, tulip bulb craze, the only collective madness I can think of in recent times is Germany in the 1930's.

There really was no reasoning with people, whats worse is that there are some still in denial, believing the spin from vested interestes.

The way i am most saddened by all of this is that so far nothing has been done (ie; legislation or regulation) to prevent this happening again. Indeed, some of the Landlord/TD's political representatives seem intent on starting it all again.

I'll end my rant with a depressing observation, we get the political leadership we deserve. Most people vote for the local "cute hoor" because he got granny that medical card/knew me father/got me that planning and sure "isnt he great for out parish". This parish pump/parochialism/localisms and clientèlism is the true cancer in out democracy.

indiewindy

Caoimhín wrote: »

More like sociological students attempting to understand collective madness.

Apart from other economic bubbles, eg; the south sea exploration, tulip bulb craze, the only collective madness I can think of in recent times is Germany in the 1930's.

There really was no reasoning with people, whats worse is that there are some still in denial, believing the spin from vested interestes.

The way i am most saddened by all of this is that so far nothing has been done (ie; legislation or regulation) to prevent this happening again. Indeed, some of the Landlord/TD's political representatives seem intent on starting it all again.

I'll end my rant with a depressing observation, we get the political leadership we deserve. Most people vote for the local "cute hoor" because he got granny that medical card/knew me father/got me that planning and sure "isnt he great for out parish". This parish pump/parochialism/localisms and clientèlism is the true cancer in out democracy.

A grim post, but sadly all too true,the crazy property related legislation that helped fuel the bubble should all have been removed.

Caoimhín

indiewindy wrote: »

A grim post, but sadly all too true,the crazy property related legislation that helped fuel the bubble should all have been removed.

Thats the point though, it should have been removed but only the serious "tin foil hat" conspiracy brigade would have you believe that the politicians kept the tax incentives to assist a select few. The fact is politicians act to improve their best chances of getting re-elected.
Now a selected few vested interests or potential personal gain is not sufficient incentive for a TD to keep these pro property bubble policy.
Therefore, one can only conclude that a larger body of the population were caught up in what can only be described as the delusion of a "get rich" pyramid scheme.

I will get lamped for this, but i have come to believe that the Irish are too immature, drunk or selfish to govern ourselves.

Caoimhín

Caoimhín wrote: »

I will get lamped for this, but i have come to believe that the Irish are too immature, drunk or selfish to govern ourselves.

Not really, most countries political leaders are mere puppets of their banking sectors, the UK & USA being classic examples.

The problem here was of course the bankers "overfilled" the punch bowl!

robd

This has to be the beginning of the end for what was the Irish Property market. EU/IMF announcements that the banks in Ireland are going to be shrunk. The only way to do that is to shrink the balance sheets, i.e. the loan book. So the 2 main lenders at the moment will be unable to give loans/mortgages. Maybe they're be some kind of a merger of Anglo/AIB/BOI. Don't know how exactly they'll shrink it just that shrink means no loans. I'm sure it will make PTSB/Ultser stronger but what rates will they charge.

X files

Scary stuff, it is going to be a hard slog to get get ourselves out of this one. Loads for sale or rent near me the problem is that the ones who caused and fuelled all the boom dont seem to be suffering that much.

TKline

X files wrote: »

Scary stuff, it is going to be a hard slog to get get ourselves out of this one. Loads for sale or rent near me the problem is that the ones who caused and fuelled all the boom dont seem to be suffering that much.

Isn't that always the way.

The common folk suffer the most, and the knobs responsible get bailed out.

By us!

mathie

robd wrote: »

This has to be the beginning of the end for what was the Irish Property market. EU/IMF announcements that the banks in Ireland are going to be shrunk. The only way to do that is to shrink the balance sheets, i.e. the loan book. So the 2 main lenders at the moment will be unable to give loans/mortgages. Maybe they're be some kind of a merger of Anglo/AIB/BOI. Don't know how exactly they'll shrink it just that shrink means no loans. I'm sure it will make PTSB/Ultser stronger but what rates will they charge.

Don't you understand? The government will do whatever it takes to prop up the property market. There will be no end. It's death by a thousand cuts. Japanese soft-landing style from here on in.

mathie

mathie wrote: »

Don't you understand? The government will do whatever it takes to prop up the property market. There will be no end. It's death by a thousand cuts. Japanese soft-landing style from here on in.

But will the IMF!

mathie

Deleted User wrote: »

But will the IMF!

The IMF are a privately-funded US-based organisation that has profit as it's number one interest.
It will be incredibly happy to lend to us at a high rate of interest for as long as we want/need those funds.

Don't be under any illusion that the government will change and that reform will come. It will not. The fat cats will win as they always have.

Fr0g

A condition of the IMF bailout is to downsize the banks. AIB will likely be fully nationalised in 2011 we will have fewer banks, less competition, higher interest rates. FF can try all they like they will not be able to prop up house prices. I see another 20% to 30% drop from here.

mathie

mathie wrote: »

The IMF are a privately-funded US-based organisation that has profit as it's number one interest.
It will be incredibly happy to lend to us at a high rate of interest for as long as we want/need those funds.

Don't be under any illusion that the government will change and that reform will come. It will not. The fat cats will win as they always have.

Only if there is a chance of growth in the economy, else they won't allow it!

robd

mathie wrote: »

The IMF are a privately-funded US-based organisation that has profit as it's number one interest.
It will be incredibly happy to lend to us at a high rate of interest for as long as we want/need those funds.

Don't be under any illusion that the government will change and that reform will come. It will not. The fat cats will win as they always have.

Read Naomi Klein's "The Shock Doctrine" for an insight into the IMF. Profit isn't their motive. Adoption of right wing Friedman economic policies is. In just about every IMF intervention the common man is screwed to the wall. Expect state assets to be sold off at bargain bin prices and public servants and services to be cut cut cut.

I don't expect a change in government etc. What I do expect is at lot less money in 80% of people's pockets and a banking system with no money to lend. That's likely to cause a catastrophic explosion in the property market. The government doesn't have the money to prop it up.

The unique and new problem with Ireland today is that we have no currency to devalue. That's never ever happened before. That means spending has to be cut which can only result in massive deflation. As we are such a globalized economy goods (that effect CPI) can't really deflate. That leaves wages and asset bubbles to bear the deflation.

rightnwrong

Is that real mentalson? If it is, I think people should be careful a lot. Aaaaarrrrrgggghhhh!!!

mark renton

Caoimhín wrote: »

I will get lamped for this, but i have come to believe that the Irish are too immature, drunk or selfish to govern ourselves.

maybe a little harsh but not far off the mark -personally I think that politics in this country is flawed, we are governed by salesmen, and a salesmsns job is to overemphasize the good and blatantly lie or ignore anything thats bad

I have never voted before and will never vote for a salesman - I could only ever see myself voting if the party were non irish, had intellectual ability, common sense and a good record in a business background

fontanalis

john47832 wrote: »

maybe a little harsh but not far off the mark -personally I think that politics in this country is flawed, we are governed by salesmen, and a salesmsns job is to overemphasize the good and blatantly lie or ignore anything thats bad

I have never voted before and will never vote for a salesman - I could only ever see myself voting if the party were non irish, had intellectual ability, common sense and a good record in a business background

I think you're being unfair to salesmen.

TKline

robd wrote: »

Read Naomi Klein's "The Shock Doctrine" for an insight into the IMF.

Great book. The documentary was good too.