Ireland the most troubled economy in Europe

Fratton Fred

Northern rock happened before the full extent of the banking crisis was known though. There is a big difference between the collapse of a bank and the collapse of a country's banking system and economy. This is news so it is being reported, I don't see how there are any alterior motives behind it. A lot of people in the UK have money invested in Ireland so they need to be kept informed.

lordhawhaw

3 banks with 150 billion out on loans. 1 bank with 52 billion in property60% write down on commercial property.who is gonna pay for the combined 75 Billion liability? Oh i'm not allowed to talk down the country, because (nudge, wink) "We are a vibrant strong economy". I'm reading the grapes of wrath at the moment.maybe if we sell chickens for 1 million euro each we only have to sell 7000

NewDubliner

lordhawhaw wrote: »

Oh i'm not allowed to talk down the country, because (nudge, wink) "We are a vibrant strong economy".

Nobody should hide the truth, but there are falsehoods being introduced. Let's stick to the facts.

jmayo

NewDubliner wrote: »

Nobody should hide the truth, but there are falsehoods being introduced. Let's stick to the facts.

Would these be the facts as released to us by Minister of Finance, Dept of Finance, IFSRA, Central Bank, our leading bankers or George Lee, Alan Aherne and Morgan Kelly ?

Guess which ones might actually be telling us something approaching the truth ?

The last thing we should be doing is trying to cover up stuff.
Nobody believes Irish banking reports anymore and that's why we are standing joke now.
We are all just waiting for the next scandal to break.

NewDubliner

jmayo wrote: »

Would these be the facts as released to us by Minister of Finance, Dept of Finance, IFSRA, Central Bank, our leading bankers or George Lee, Alan Aherne and Morgan Kelly ?.

I'm referring to scare stories involving the imminent arrival of the IMF (not) and being in the crosshairs of the G7 (not).

Things are bad enough without making stuff up.

besty

nesf wrote: »

Link to the article and give an opinion on it in future Betsy.

Will do. Virgin politics post. Also, in future, it's besty :pac:

nesf

besty wrote: »

Will do. Virgin politics post. Also, in future, it's besty :pac:

I got called nerf today :pac:

HoldStady

I remember reading something about this whereby the British financial press would be leaked stories about Ireland's capability to default therefore increasing the liklihood that the insurance on Irish bonds would increase (also putting pressure on the ratings agencies to downgrade Ireland). This would make the money Ireland is borrowing so expensive it would make it untenable. This would make money for the short sellers who are betting against Ireland being able to service its debt.
I think it was David McWilliams who said this but I cannot find the reference on the Independent website to read it again.
Could this be true or is it a handy conspiracy theory, however when I read the ST article when I was in London and it was on the front page it made me think. Also The Economist had a small article in the 07/02/2009 edition about Ireland (Reykjavik on the Liffey) but it did not mention the possibility of Ireland being unable to service its debt.

NewDubliner

HoldStady wrote: »

I remember reading something about this whereby the British financial press would be leaked stories about Ireland's capability to default .

They're not leaks. It's speculation & rumour mongering.

At the end of the day, how much we get charged for borrowing is at least, in part, a matter of sentiment for the lenders.

The UK media is talking us down so that the UK will get better rates than us.

It's a dirty war out there and every weapon is being used.

Fratton Fred

HoldStady wrote: »

I remember reading something about this whereby the British financial press would be leaked stories about Ireland's capability to default therefore increasing the liklihood that the insurance on Irish bonds would increase (also putting pressure on the ratings agencies to downgrade Ireland). This would make the money Ireland is borrowing so expensive it would make it untenable. This would make money for the short sellers who are betting against Ireland being able to service its debt.
I think it was David McWilliams who said this but I cannot find the reference on the Independent website to read it again.

I must admit, I've only just got my head around short selling on shares. how does it work with a country's economy? government bonds?

NewDubliner wrote: »

They're not leaks. It's speculation & rumour mongering.
At the end of the day, how much we get charged for borrowing is at least, in part, a matter of sentiment for the lenders.
The UK media is talking us down so that the UK will get better rates than us.
It's a dirty war out there and every weapon is being used.

Why?

Akrasia

Rented Mule wrote: »

What does the country have to fall back on at this point ?

Tourism and agriculture ?

It amazes me the number of groups who plan industrial actions/strikes, when everything is about to blow up in everyone's face. It seems as though the 'bigger picture' is completely lost on everyone. Many of the mulit-nationals are hanging on by a thread at the moment and looking for any excuse to start heading east.

It amazes me even further that people who complain about unions missing the 'bigger picture' dont seem to notice that the government is throwing billions and billions and billions of your children's money down the toilet to protect their buddies in the banking sector, while they're 'scrimping' a few millions at a time removing valuable services from people with learning disabilities

Fratton Fred

Akrasia wrote: »

It amazes me even further that people who complain about unions missing the 'bigger picture' dont seem to notice that the government is throwing billions and billions and billions of your children's money down the toilet to protect their buddies in the banking sector, while they're 'scrimping' a few millions at a time removing valuable services from people with learning disabilities

If a bank goes bust, the liquidators may have the right to call in your mortgage. Imagine if 200,000 families in Ireland (Many with negative equatity) had to suddenly pay off their mortgages or have their houses repossessed. where do you think we would be then?

jmayo

Fratton Fred wrote: »

If a bank goes bust, the liquidators may have the right to call in your mortgage. Imagine if 200,000 families in Ireland (Many with negative equatity) had to suddenly pay off their mortgages or have their houses repossessed. where do you think we would be then?

Ah but how many normal residential mortgage holders did Anglo have ?
They were not of systemic importance according to most analysts, but yet they were the ones that the government have bent over backwards to save.

We do know they may have had money on deposit belonging to a massive player in residential mortgage business and was that the real reason they were saved ?

How come at the time of the guarantee, AFAIK some of the players did not want Anglo covered and more importantly why were they overruled ?

This is the big question and needs to be answered because the Irish people have a right to know why they are saddled with approx 60 billion in property related debt, a good portion of it probably bad debt.

Of course the bankers on here will say we should move on, it had to be done to save the rest but if that was so, how come the big two banks AFAIK did not want Anglo in the guarantee.

To paraphrase an infamous US politican, there are some known unknowns and some unknown unknowns :rolleyes:
Until everything is out there is a huge unknown label hanging over Irish financial institutions of all decriptions.

Fratton Fred

jmayo wrote: »

Ah but how many normal residential mortgage holders did Anglo have ?
They were not of systemic importance according to most analysts, but yet they were the ones that the government have bent over backwards to save.

We do know they may have had money on deposit belonging to a massive player in residential mortgage business and was that the real reason they were saved ?

How come at the time of the guarantee, AFAIK some of the players did not want Anglo covered and more importantly why were they overruled ?

This is the big question and needs to be answered because the Irish people have a right to know why they are saddled with approx 60 billion in property related debt, a good portion of it probably bad debt.

Of course the bankers on here will say we should move on, it had to be done to save the rest but if that was so, how come the big two banks AFAIK did not want Anglo in the guarantee.

i thought there were a lot of residential mortgages and mortgages on second properties secured on main homes. how many are needed to justify a bail out and how many jobs are worth losing?

jmayo wrote: »

To paraphrase an infamous US politican, there are some known unknowns and some unknown unknowns :rolleyes:
Until everything is out there is a huge unknown label hanging over Irish financial institutions of all decriptions.

I would suggest that label hangs over most banks, not just Irish ones.

jmayo

Fratton Fred wrote: »

i thought there were a lot of residential mortgages and mortgages on second properties secured on main homes. how many are needed to justify a bail out and how many jobs are worth losing?

But mortgages on second properties would mean investor n'est pas ?
I know some bankers or banking experts can clairfy this but Anglo were small player in residential mortgage AFAIK and if they went these would probably be bought by someone else.
It doesn't mean overnight somebody would be looking for their money or the house.
So what if the banks employees jobs went, should we commit to possibly 20 billion plus in taxpayers money to save them ?
If you take that line, shouldn't Waterford get bailout, shouldn't Dell, shouldn't all the other private enterprises get a bailout etc etc.

The only reason they got bailout was supposedly because they were of systemic importance to the banking system, which is a point that has been debated by financial analysts and other bankers.

Fratton Fred wrote: »

I would suggest that label hangs over most banks, not just Irish ones.

True internationally most banks have question marks hanging over them, but Irish banks seem to have a stench all of their own.

One bank in particular has been shown to be playing silly budgers, hiding directors loans temporarily diverting them to another institution, getting sizable deposits from another institution to bring up it's deposit base at year end and offering loans to individuals to purchase the banks own shares apparently only secured on the shares themsleves.
Anglo has roped in two other institutions, that we know of, into their schenangains.

BTW these are facts, not myths or rumours and becuase we discuss them doesn't mean we are ranting or rumour milling, as somepeople state if we dare discuss these issues.

The other banks as can be seen from the revelations about their bad debts post recapitalisation are concealing the true state of their loan books or if we are charitable, they are pretty oiptimistic about their loan books.

Fratton Fred

jmayo wrote: »

But mortgages on second properties would mean investor n'est pas ?
I know some bankers or banking experts can clairfy this but Anglo were small player in residential mortgage AFAIK and if they went these would probably be bought by someone else.
It doesn't mean overnight somebody would be looking for their money or the house.
So what if the banks employees jobs went, should we commit to possibly 20 billion plus in taxpayers money to save them ?
If you take that line, shouldn't Waterford get bailout, shouldn't Dell, shouldn't all the other private enterprises get a bailout etc etc.

The only reason they got bailout was supposedly because they were of systemic importance to the banking system, which is a point that has been debated by financial analysts and other bankers.

I was thinking more along the lines of calling in mortgages on second properties, many of which are in excess of 90% mortgages, would result in the investor having to sell their own house to make up the shortfall. A lot of these second mortgages for investment properties were based on the now non existant equatity in the main residence.

If loans for developers are called in, then what happens to those companies. this would no doubt push many er the edge resulting in more job losses, over and above the losses at the bank.

I haven't done the maths on it tbh, but a bank collapsing can have enormous knock on effects.

jmayo wrote: »

True internationally most banks have question marks hanging over them, but Irish banks seem to have a stench all of their own.

One bank in particular has been shown to be playing silly budgers, hiding directors loans temporarily diverting them to another institution, getting sizable deposits from another institution to bring up it's deposit base at year end and offering loans to individuals to purchase the banks own shares apparently only secured on the shares themsleves.
Anglo has roped in two other institutions, that we know of, into their schenangains.

BTW these are facts, not myths or rumours and becuase we discuss them doesn't mean we are ranting or rumour milling, as somepeople state if we dare discuss these issues.

The other banks as can be seen from the revelations about their bad debts post recapitalisation are concealing the true state of their loan books or if we are charitable, they are pretty oiptimistic about their loan books.

I agree and I believe there are directors who should have criminal cases brought against them tbh.

jmayo

Fratton Fred wrote: »

I was thinking more along the lines of calling in mortgages on second properties, many of which are in excess of 90% mortgages, would result in the investor having to sell their own house to make up the shortfall. A lot of these second mortgages for investment properties were based on the now non existant equatity in the main residence.

The short answer is tough sh** if you remortgaged your home to buy more over priced property as investment or even holiday home.

See Accomodation and Property forum to see how most sane people view those who have gotten burnt by paying high prices for property, are now in negative equity and maybe looking for bailout.
This is all the more the case when it is an investment property that has caused this.

If you remortgage your property, just like if you take out a bank loan of any type, then you should be expected to pay it back and not look for a getout clause.
We can not have a system, and a society, where people get to reap the rewards when times are good, but are bailed out if things turn bad.

Fratton Fred wrote: »

If loans for developers are called in, then what happens to those companies. this would no doubt push many er the edge resulting in more job losses, over and above the losses at the bank.

I haven't done the maths on it tbh, but a bank collapsing can have enormous knock on effects.

Again why should the taxpayer stump up to bailout developers who made a fortune fleecing taxpayers who were trading up or FTBs.
Yes the people that work for developers lose jobs, just like people in other insolvent companies lose jobs.
Should they be propped up by the taxpayers as well, surely there are more compelling reasons to save jobs in productive companies rather than development companies ?

The building industry has already had huge jobs losses, but people were working in an industry producing overpriced products that nobody wants.
There was an oversupply of overpriced products. Simple as that.

The big problem is that developers are not being liquidated and their assets sold off.
Thus nobody really knows the real price of property, banks do know the real exposure they have to bad debts, and nobody is entering the housing market to buy because they know they are buying into a downward market.

Until banks force developers to sell off both development land and the huge stockpile of housing, nobody knows the real value of Irish property.
We are living in denial at the moment.

Fratton Fred wrote: »

I agree and I believe there are directors who should have criminal cases brought against them tbh.

Some our banking posting friends would disagree :rolleyes:

Dannyboy83

Fratton Fred wrote: »

If a bank goes bust, the liquidators may have the right to call in your mortgage. Imagine if 200,000 families in Ireland (Many with negative equatity) had to suddenly pay off their mortgages or have their houses repossessed. where do you think we would be then?

Would the Government be able to transfer those residential mortgages, or arrange with a stable back to do so?

And let commercial could go in the bin.

I understand that the liquidators could demand the entire lump sum.
But realistically speaking, they put 7 Billion into the pot already.
That would have probably covered all of Anglo's residential mortgages and left anything else out for the vultures.

Those mortgages could be repaid to a different institution.

Fratton Fred

jmayo wrote: »

The short answer is tough sh** if you remortgaged your home to buy more over priced property as investment or even holiday home.

See Accomodation and Property forum to see how most sane people view those who have gotten burnt by paying high prices for property, are now in negative equity and maybe looking for bailout.
This is all the more the case when it is an investment property that has caused this.

If you remortgage your property, just like if you take out a bank loan of any type, then you should be expected to pay it back and not look for a getout clause.
We can not have a system, and a society, where people get to reap the rewards when times are good, but are bailed out if things turn bad.

Again why should the taxpayer stump up to bailout developers who made a fortune fleecing taxpayers who were trading up or FTBs.
Yes the people that work for developers lose jobs, just like people in other insolvent companies lose jobs.
Should they be propped up by the taxpayers as well, surely there are more compelling reasons to save jobs in productive companies rather than development companies ?

The building industry has already had huge jobs losses, but people were working in an industry producing overpriced products that nobody wants.
There was an oversupply of overpriced products. Simple as that.

The big problem is that developers are not being liquidated and their assets sold off.
Thus nobody really knows the real price of property, banks do know the real exposure they have to bad debts, and nobody is entering the housing market to buy because they know they are buying into a downward market.

Until banks force developers to sell off both development land and the huge stockpile of housing, nobody knows the real value of Irish property.
We are living in denial at the moment.

I wouldn't disagree with you tbh, but I can't think what else the government can do. I just think a bank like Anglo going bust could have huge far reaching effects.

There are a lot more people to blame than just the banks though...did anything ever happen to that estate agent and financial advisor who were swapping information? The whole property system was full of greed and all the time the government were getting 12% stamp duty they didn't care.

The biggest issue I have, is that the man responsible for a lot of this conveniently stepped down last year and let some other poor mug take his place. Bertie knew what was coming and ran as fast as he could.

Fratton Fred

Dannyboy83 wrote: »

Would the Government be able to transfer those residential mortgages, or arrange with a stable back to do so?

And let commercial could go in the bin.

I understand that the liquidators could demand the entire lump sum.
But realistically speaking, they put 7 Billion into the pot already.
That would have probably covered all of Anglo's residential mortgages and left anything else out for the vultures.

Those mortgages could be repaid to a different institution.

Maybe, in fact i think they have suggested something not too dissimilar with the other banks but using Anglo as the way to do it.

jmayo

Fratton Fred wrote: »

I wouldn't disagree with you tbh, but I can't think what else the government can do. I just think a bank like Anglo going bust could have huge far reaching effects.

Yes the argument given is that it would have same effects as Lehman Brothers in the US, but what some analysts/economists said is they should have let Anglo go, but move immediately then to recapitalise and guarantee the ones with greatest high street footprints.

Fratton Fred wrote: »

There are a lot more people to blame than just the banks though...did anything ever happen to that estate agent and financial advisor who were swapping information? The whole property system was full of greed and all the time the government were getting 12% stamp duty they didn't care.

Of coursae the government was to blame.
So was total lack of banking regulation, cheap credit availability, estate agents, auctioneers, builders, develoeprs, solicitors and indeed a lot of the general public clammering to get on board the proeprty gravy train to easy riches.

The increasing house prices were achievable through availaiblity of cheap credit and it pushed up all our costs especially labour cpsts which made the our exporters totally uncompetitve.
The government was happy since stamp duty and vat was rolling in and they increased public spending and blew millions more.

Fratton Fred wrote: »

The biggest issue I have, is that the man responsible for a lot of this conveniently stepped down last year and let some other poor mug take his place. Bertie knew what was coming and ran as fast as he could.

With all due respect to you Fratton Fred, that is pure bull****.
People blame McCreevey and Ahern who were indeed part of the problem and sowed soe of the seeds of our destruction.
But look at who was the finance minsiter through the years when the bubble was reaching it's peak, one Biffo Clowen.
He did nothing to rain things in, he did nothing about getting financial regulator or central bank to rain in the banks and 100% mortgages.
Did he not extend section 23 and section 50s ?
Was he responsible for allowing tax havens such as hospitals and hotels for rich to invest to write off against tax ?

Did they ever try and take steam out of the market by clamping down on speculators buying off plan and reselling, or investors buying multiple properties for rental ?

He was a key player in the creation of this mess so he diserves asmuch of the blame as good old sleeveen no.1 bertie.

Fratton Fred

jmayo wrote: »

Yes the argument given is that it would have same effects as Lehman Brothers in the US, but what some analysts/economists said is they should have let Anglo go, but move immediately then to recapitalise and guarantee the ones with greatest high street footprints.

maybe. I'm not sure which carries the greater risk though.

jmayo wrote: »

With all due respect to you Fratton Fred, that is pure bull****.
People blame McCreevey and Ahern who were indeed part of the problem and sowed soe of the seeds of our destruction.
But look at who was the finance minsiter through the years when the bubble was reaching it's peak, one Biffo Clowen.
He did nothing to rain things in, he did nothing about getting financial regulator or central bank to rain in the banks and 100% mortgages.
Did he not extend section 23 and section 50s ?
Was he responsible for allowing tax havens such as hospitals and hotels for rich to invest to write off against tax ?

Did they ever try and take steam out of the market by clamping down on speculators buying off plan and reselling, or investors buying multiple properties for rental ?

He was a key player in the creation of this mess so he diserves asmuch of the blame as good old sleeveen no.1 bertie.

I love the way people say "With all due respect", just before they tell you you're talking ****e.:D

Point taken by the way.

jmayo

Fratton Fred wrote: »

...

I love the way people say "With all due respect", just before they tell you you're talking ****e.:D

Point taken by the way.

Ah I was trying to be nice.

But I do think that some people seem to forget that Biffo Clowen was at the top of the totem pole and was gladly bertie's right hand man and the annointed one.

Fratton Fred

I take back everything I said.

It seems obvious now why the bank was bailed out and tbh, it should have allowed to go to the dogs.:mad:

puglover

jank wrote: »

I agree but what I think what the "drama" is about is that we are heading in that direction and there is nothing anyone, not even the government can do about it. It is like seeing the end of the film before watching the whole film and no matter how much you can wish it away, you know the end of the story and what the outcome will be.

We will be at 20% unemployment in 18-24 months and the government are clueless about the banking sector.

There are lots of measures that can be taken but the Irish Goverment interventions are the complete opposite of what any economist would prescribe in a depression such as this. They should be injecting money into the economy to stimulate it by cutting vat, not taking money out by lowering minimum wage & increasing taxes.

People don't seem to realise this is dramatic, the GNP figures forecast for 2008 & 2009 are the lowest since records began, and some would even think that these are optimistic and it may drop as low as -6%. We're talking worse than Angelas Ashes period!!