A NAMA for ordinary people not developers.

SkepticOne

Drumpot wrote:

People should be held accountable for their decisions. Im in negative equity and I am quite happy to service loans that I take out at any stage.

This is why I think that if assistance is to occur, it should be to individuals rather than developer businesses. For the most part most people, even those in negative equity, will strive to continue to pay their mortgage. Although much is made of people posting their keys back to their lender ("jingle mail"), it is in reality comparatively rare.

Compare this to developers who have structured their businesses deliberately to allow the equivalent of handing back the keys while minimising damage to the overall business itself. Hence, the hundreds of companies that individual developers set up.

amacca wrote: »

Also when these borrowers re skill I believe that there is high likelihood of no job presenting itself for a significantly large percentage of them in the medium term meaning the this NAMA for individuals might not be worth it from an economic point of view...no job, no repayment, borrowings pile up even more, repossession delayed, market kept artificially high etc unless this scheme proposes to ease the burden by reducing the individuals borrowings for good? ----now that is something I would object to as strenuously as bailing out our developers.

If you take a risk you should be free to enjoy the rewards or you should have to put up with the pain afterward. Certain people need to develop a spine, stand on their own two feet and put some thought into important decisions like taking out a mortgage and imo when you start removing consequences all you seem to get in this life is more childish behaviour rather than gratitude and efforts being made not to make the same mistake twice/improve the system.

I don't think anyone has a problem with the idea that people should take full responsibility for their actions. What I would question is whether this is the priority right now when people are losing their jobs. There will be a lot of people realising that, yes, they should not have bought that house at the top of the market, but now having understood this, they are unable to do anything about it. There's no point in learning from your mistakes if you can't then use that learning to rectify the situation.

The reason any of this is an issue is that when the government extended the guarantee scheme to bond holders, the banks' problems became the country's problems. The banks' reckless lending is the country's reckless lending. In a sense, the bailout has already occurred. We are paying for this bailout through higher costs of borrowing for the government.

Thus if you or anyone can't pay their mortgage through redundancy it is now my problem whether I like it or not. The fact that the underlying security, the house, is now worth a lot less is also my problem, much as I don't like that either.

I don't think any politician of any party right now would contemplate lifting this guarantee as it would immediately trigger a run on the banks and be the end of them politically.

This is why sentiments about people taking personal responsibility are not really relevant to the options available at this point in time. What I'm looking for here is politically realistic alternatives to the current NAMA plan that have some chance of being adopted by some government.

SLUSK

Don't bail out "ordinary" people who bought a house they could not afford. They deserve to end up in the streets. That will teach them a lesson. They can live in tent cities and think about their mistakes.

jmayo

FFS where do some people get their ideas from ?

It is one thing to have to bail out the banks whose demise would have huge widespread consequences for the entire economy, but why the f*** should we bailout individuals some of whom showed no fiscal responsibility whilst they blew borrowed money on hosues they couldn't afford, brand new cars, foreign holidays, flash parties for their kids.

I know one individual who built a beautiful huge house, but borrowed extra to buy a sports car and boat for himself and a big jeep for the wife.
Now he can't get rid of the house and he can't afford the mortgage.
Can someone please tell me why he deserves a bailout ?

Drumpot

jmayo wrote: »

FFS where do some people get their ideas from ?

It is one thing to have to bail out the banks whose demise would have huge widespread consequences for the entire economy, but why the f*** should we bailout individuals some of whom showed no fiscal responsibility whilst they blew borrowed money on hosues they couldn't afford, brand new cars, foreign holidays, flash parties for their kids.

I know one individual who built a beautiful huge house, but borrowed extra to buy a sports car and boat for himself and a big jeep for the wife.
Now he can't get rid of the house and he can't afford the mortgage.
Can someone please tell me why he deserves a bailout ?

I agree and disagree.

I agree with what you are saying in that bailing out Individuals does the economy no good and bailing out the banks is a necessary evil that SHOULD hopefully benefit the economy overall.

But .

I disagree with your comments on individuals "blowing loans". Individuals in trouble are no less entitled to be looking for state subsidy then the banks. The ONLY differance is that bailing individuals out does not serve the greater good of the economy. .

And I dont believe people that took out mortgages that they cannot afford now should automatically be castigated. While there is personal responsibility on peoples part to be prudent, you cant expect everybody to know how much a bank should loan them, or how house prices will go.

SkepticOne

jmayo wrote: »

FFS where do some people get their ideas from ?

It is one thing to have to bail out the banks whose demise would have huge widespread consequences for the entire economy, but why the f*** should we bailout individuals some of whom showed no fiscal responsibility whilst they blew borrowed money on hosues they couldn't afford, brand new cars, foreign holidays, flash parties for their kids.

I know one individual who built a beautiful huge house, but borrowed extra to buy a sports car and boat for himself and a big jeep for the wife.
Now he can't get rid of the house and he can't afford the mortgage.
Can someone please tell me why he deserves a bailout ?

This is a largely repeat of other posts in the thread which I have tried to address.

Sand

And I dont believe people that took out mortgages that they cannot afford now should automatically be castigated. While there is personal responsibility on peoples part to be prudent, you cant expect everybody to know how much a bank should loan them, or how house prices will go.

Id agree to a certain extent. People who bought at stupid prices in the last 3-4 years would have borrowed at pretty high interest rates relative to what currently exists. If they could manage it then, they can surely manage it now. I know my own mortgage has dropped by a quarter. So all other things considered I have relatively more disposable income than 3 years ago.

So why are others in trouble now, at a time of low interest rates? 15% unemployment rates might explain it. If you are employed, you can service a mortgage. If you are not, you cannot. I dont blame someone who was made unemployed for running into difficulties with servicing a mortgage. Others clearly do as apparently, no one should borrow more than they could repay on the dole...

couerdelion

Sand wrote: »

Id agree to a certain extent. People who bought at stupid prices in the last 3-4 years would have borrowed at pretty high interest rates relative to what currently exists. If they could manage it then, they can surely manage it now. I know my own mortgage has dropped by a quarter. So all other things considered I have relatively more disposable income than 3 years ago.

So why are others in trouble now, at a time of low interest rates? 15% unemployment rates might explain it. If you are employed, you can service a mortgage. If you are not, you cannot. I dont blame someone who was made unemployed for running into difficulties with servicing a mortgage. Others clearly do as apparently, no one should borrow more than they could repay on the dole...

It's not quite as simple though as 'the mortgage interest rates have dropped so it should be more affordable'. Mine and many of my friends circumstances have changed too. Wage cuts at work (I've had to take 10% my partner 50%) plus tax increases mean that I'm worse off now than ever. If the interest rates hadn't come down then I would more than likely have defaulted on my mortgage.

Sand

Thats what I am saying - if people are having difficulties with their mortgage now, in a time of lower interest rates, its more than likely down to them losing their jobs or having to accept pay cuts.

Hence I find the sorrowful shaking of the head and comments about borrowing more than you can afford on the dole to be a bit shortsighted. Sure, if someone borrowed in excess of their income...their problem. If they borrowed within their income, and then their income was taken away from them due to redundancy or wage cuts...its hard to argue they were exceptionally reckless in their borrowing.

couerdelion

Sand wrote: »

Thats what I am saying - if people are having difficulties with their mortgage now, in a time of lower interest rates, its more than likely down to them losing their jobs or having to accept pay cuts.

Hence I find the sorrowful shaking of the head and comments about borrowing more than you can afford on the dole to be a bit shortsighted. Sure, if someone borrowed in excess of their income...their problem. If they borrowed within their income, and then their income was taken away from them due to redundancy or wage cuts...its hard to argue they were exceptionally reckless in their borrowing.

Ah ok, sorry mis-read you.

I do get fed up with all the 'borrowed beyond your means' rubbish that gets spouted. The banks obviously agreed that people weren't borrowing beyond their means at the time and the problem is the economic decline.
Nobody foresaw that when borrowing money, or envisaged wage cuts.

amacca

SkepticOne wrote: »

This is why I think that if assistance is to occur, it should be to individuals rather than developer businesses. For the most part most people, even those in negative equity, will strive to continue to pay their mortgage. Although much is made of people posting their keys back to their lender ("jingle mail"), it is in reality comparatively rare.

Compare this to developers who have structured their businesses deliberately to allow the equivalent of handing back the keys while minimising damage to the overall business itself. Hence, the hundreds of companies that individual developers set up.I don't think anyone has a problem with the idea that people should take full responsibility for their actions. What I would question is whether this is the priority right now when people are losing their jobs. There will be a lot of people realising that, yes, they should not have bought that house at the top of the market, but now having understood this, they are unable to do anything about it. There's no point in learning from your mistakes if you can't then use that learning to rectify the situation.
.
.
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Thus if you or anyone can't pay their mortgage through redundancy it is now my problem whether I like it or not. The fact that the underlying security, the house, is now worth a lot less is also my problem, much as I don't like that either.

I don't think any politician of any party right now would contemplate lifting this guarantee as it would immediately trigger a run on the banks and be the end of them politically.

This is why sentiments about people taking personal responsibility are not really relevant to the options available at this point in time. What I'm looking for here is politically realistic alternatives to the current NAMA plan that have some chance of being adopted by some government.

Snipped a bit out, I suppose its easy to see from my previous posts that they are partly fueled by some begrudgery and a certain amount of desire to see people who borrowed recklessly pay the price.

Just some points on this before I continue, I dont consider people who borrowed with a reasonable prospect of paying back and had a reasonable prospect of keeping their job/income getting into difficulty reckless borrowers, neither do I consider those that took out sensible multiples of their income as borrowings reckless so I would not like to see these people hard done by, so Im not an utter hardliner who believes those who borrowed and could'nt pay back should be dealt with harshly......but part of setting up a politically realistic alternative to NAMA that involves aiding those individual borrowers in default or danger of default does however have to deal with sorting out those borrowers considered to be reckless from those considered to be just unfortunate - I believe that drawing this line would be as fraught with controversy and liable cause uproar as NAMA currently is/will be.

But thats an aside to my main point, you say above that you would question whether people taking full responsibility for their actions should be a priority right now given that people are losing their jobs. In response I would say that the only way to resolve this mess quickly and not prolong and increase the damage caused is for both developers and individuals to be made take full responsibility for their actions right now and take the hits. Its hugely unfortunate but I believe that ultimately the only way a system/society works smoothly and efficiently is if individuals have to take responsibilty for their actions either voluntarily or because society sees to it that they have to....

You also say that the idea of people taking personal responsibility are not really relevant at this point in time......completely disagree, I think its very relevant (at the heart of this debate actually) because lack of responsibilty is what got us into this mess, ameliorating personal responsibilty is imo making things worse right now and if we continue to do this will disimprove things even more in the future.

Its hard to back up what Im saying as its partly gut instinct (which of course can be wrong but Ive learned to trust it), partly a sense of not wanting others to get away with borrowing too much and holding on to a house when I firstly was'nt able to and subsequently chose not to becuase I didnt want to be in debt the rest of my life. That might be an ugly sentiment but I got lucky/made the right choice and want to benefit from it and it feels wrong if I dont benefit fully. Sort of like having the best hand in poker and someone changing the rules to allow the player with a pair of twos take the pot....you may have got the hand through luck but you stayed in the game up till this point and played conservatively by the rules, kept an eye on the probabilities and now when youre in the driving seat someone changes the rules.....very disappointing. Makes you think that being a productive, hard working member of society just isnt worth it....makes you think that if enough people do something foolish/criminal they get away with it...creates a disincentive for behaving responsibly etc

Having said that, its hard to back it up but not necessarily impossible......Something similar to a NAMA (albeit administered by the banks) for individual borrowers is already being tried in the states with less than favourable results. I think this shows that bailing out the individual borrower is no more a good idea than bailing out the developer (albeit indirectly) with his labyrinthine mass of companies. And if it doesnt show this then it definitely shows how a well meaning piece of legislation of this type is fraught with unintended negative consequences that are very hard to eliminate no matter what you try.

They call it Mortgage Modification The US annonced it in February and it was a mortgage modification programme targetted at loans backed by fannie mae and freddie mac designed to stop the surge in foreclosures over there, give avg joe from the US OF A a chance and thus get the economy back on track which is what I believe your ultimate motivation for suggesting an individual bailout scheme is.

In theory it was supposed to be a good thing. Banks have an incentive to save a mortgage rather than have it foreclose and on top of this they were offered $4,000 for every successfully modified mortgage. This was a type of bailout for individual borrowers which seems to have been very unsuccessful (to date anyway - i suppose it still has time to turn things around but Im not holding my breath)

1. Modifying mortgages costs banks money, by reducing current payments or overall debt the bank loses money and the individual wins. Unfortunately but predictably this means that there is a huge incentive to cheat.

homeowners in the states have started intentionally skipping payments on their mortgages to qualify for this scheme and housing counselling services have started advising their customers to do this.

This ultimately means more losses for the banks which if a similar scheme were introduced here would hit our taxpaying pockets because of our guarantee. worse economically than just foreclosing in the first place.

also btw, the boston fed also stated that 30% of seriously delinquent mortages cure (return to health - payments restart, debt is cleared) which means (at least over there) that 30% of the money you put into bailing out individuals is wasted as they would have found a way to pay it off anyway...i believe this would probably be a higher figure over here because if theres one thing we can do its hang on to a house by hook or by crook.


2. The redefault rate on these modifications was horrific, 90 days after being modified, over half the mortgages were in default again making their scheme nothing more than delaying the inevitable. From a banks point of view over there it can foreclose right now and sell house at todays price or foreclose in 90 days time and more than likely make less money as the price of the house will likely have declined.

This ultimately means its more profitable for the banks to foreclose and if a similar scheme were introduced here would hit our taxpaying pockets even more becuase the banks would make less from such a scheme.

It also would seem to back up my earlier point that bailing out individuals and helping them retrain may not be such a great idea. they still might not be able to pay their mortgages as the jobs they retrain for may not exist so you would just be prolonging the inevitable and making a bigger mess with such a scheme. Borrowings could actually increase leaving borrowers in a bigger hole..banks make less money etc while those that could have paid (the by hook or by hook crowd - good for your pocket) get away if you are suggesting the scheme would reduce the overall amount owed.


Now im not saying that we could not come up with a better scheme over here but I dont just think, I believe that any attempt to reduce the debt owed by a person will ultimately be a bad thing...and not just becuase it might upset someone like me but a bad thing from an economic and political and social perspective.

It would also be horrifically hard to implement in any fair way without serious unintended consequences (see above). I also would think that if we did embark upon a mortgage modification scheme a lot of developer loans would magically qualify for modification down the road making it an even bigger developer bailout in the long run. The more I think about the more Im not in favour of NAMA in its current form either. Removing consequences for any form of bad behaviour is imo ultimately a bad idea as it just leads to a bigger mess down the road.It may look like a good idea now, it may look fine in 10/20/30 years time but ultimately its just storing up trouble imo.

No omlette without shells being broken and Im fond of a good omlette etc etc!

AlekSmart

Good piece by Gene Kerrigan in todays Indo....

http://www.independent.ie/opinion/columnists/gene-kerrigan/namas-nothing-to-worry-about-as-such-1867235.html

I was particularly taken by one of his final paragraphs.....

On Wednesday, Nama advertised for tenders for the position of "Derivatives Valuation Service Provider", that is, an expert in the valuation of "derivatives". These are financial instruments with a controversial record. It could be this is a necessary move, for unspectacular technical reasons. It could also suggest that some loans being bought by Nama are not so much toxic as radioactive.

We don't know and won't know, it's none of our business. "Commercial sensitivities", y'know. We just pay up and shut up.

The issue of just how little ,we the shareholders of NAMA,are being told about it`s workings is of huge significance.

Any mention of the term "Derivatives" SHOULD be of immense interest to us all in the wake of the U.S experience...bottles of coloured smoke...snake-oil.....and WE need a valuer for them...didng ding ding went the alarm bells !!!

There appears to be a Government consensus that this Financial Stuff is waay beyond the ken of ordinary mortals and best left to the Colm McCarthy`s,Peter Bacon`s and God between us and all harm....the Seanie Fitzpatrick`s.....

Nothing to do with NAMA should be concealed from the Public at this stage...and for sure the 5 year review period should be removed NOW and replaced by an annual PUBLIC inspection of it`s operations.

To once again quote Gene Kerrigan....

Establishment cheerleaders repeatedly tell us there's "no alternative". And, of course, it's not a bank bailout, or a builder bailout. (I love Colm McCarthy's careful wording: "There will be no bailout of the banks as such, unless the Government overpays for the loans." Ah, what a wonderful cover-me-arse phrase -- "As such". And, since it's stated government policy to overpay for those loans . . . oh, well.)

The expensive after-shave,deep tans and smooth silk-kerchief brigade appear to have won the day alright,leaving the sans-culottes to drink brackish water in the gutter. :mad:

ART6

If I understand many of the posts in this thread, people who took out mortgages they couldn't afford in bad times were reckless. Bankers who lent excessively on wildly overvalued security were not. Individuals facing repossession should not be bailed out. They are not essential to the national economy. Banks should be bailed out because they are essential to the economy.

There are however other significant differences:

The individuals who committed themselves to unaffordable mortgages probably didn't claim to be financial experts. The banks did so claim. The common man has little qualification for financial forecasting. Bankers are supposed to be (and claim to be) experts.

Individuals based their investments on single properties that they believed they knew the value of since that was what they paid for them. Banks based their investments on future asset values suggested to them by others.

Individuals had, in my view at least, every right to rely upon the advice of bankers and mortgage advisers who would apply professional experience to that advice. In the financial industry it is called "Due Dilligence". If it was not applied in the case of individual mortgages, it certainly doesn't seem to have been in the outlandish lending to developers.

So who was the more reckless? The individual who took out a €300k loan to buy a house of known value, or the bank who lent €30m to a developer who said he wanted to build a skyscraper in New York? Would I bail out the individual? No. I wouldn't. In the days when I had a morgage I also bought mortgage protection insurance in case I got sick or lost my job. Would I bail out the bankers? No I wouldn't. I would either nationalise and properly capitalise one of them or I would set up a national "good" bank and either way let the rest of them stew in the juice of their own making. If investors in the banks lost their shirts, tough. The fundamental and accepted rule in investment is if you can't afford to lose it, don't do it.

So what about the pension funds that invested in bank shares? Their fund members will lose their pensions if the banks are allowed to go bust. OK, pursuade the funds to sell their bank shares to the good bank at pre-collapse values and to then require them to use the money to buy shares in the good bank. If any of the banks survive, then profit for the taxpayer. If they don't, then at least no loss.

If the commercial banks were allowed to fail, would it destroy the Irish economy? Why should it? If Ireland is perceived to have a sound economy and a good national bank with a sound balance sheet guaranteed by the state, then there is no reason to believe that other financial institutions would not simply move in to fill the void. In my view there is much more risk in the state taking on massive debts of unknown value to a level several times that of the GNP and many times greater than any possible tax income to fund them.

Liam Byrne

couerdelion wrote: »

The banks obviously agreed that people weren't borrowing beyond their means at the time and the problem is the economic decline.

Not entirely true. I remember going into a bank and telling them I'd done the maths based on their rates and reckoned I could borrow €X, repaying €Z per month without major hassle.

In passing, I mentioned an extra amount €Y, but said that I reckoned that would have to wait because I could only afford to repay €Z per month.

Yer wan logged onto a computer and said "We can give you €X+Y, at €Z+400 per month"

I nearly fainted, and said "What part of 'I can comfortably repay €Z per month' didn't come across ? I've done the maths and definitely could not justify an extra €400 outgoing per month"

So basically, they'd have let me hang myself, and only my own sense stopped that from happening, or I'd be rightly screwed now.

Rybka

Jees, When will this country cop on.

I had a look at BOI website - they were prepared to offer me 5x my wage for a mortgage. Even in these conditions.

No person should be allowed over 3.5x their basic wage for a mortgage. No mortgage should be allowed over a period of more than 25 years.

I am not Irish, but this country has not yet accepted what is coming - In my opionion we are looking at house prices at 50% less than now - not peak. If Nama gets off the ground it could in the long run make things even worse - but delayed for a few years - at every PAYE persons expense.

Rybka

Drumpot wrote: »

To suggest that many people were prudent by renting is laughable to be honest. I dont know one person who can honestly say they didnt buy because they saw a crash down the road (and I know alot of people). They simply couldnt afford to.

Perhaps that is true, every Irish person I knew was clambering to get on the ladder.

I however came from Scotland, I had (still have) a mortgage on a very nice apartment in Ayr, Scotland bought in 1998 for 32,000. A comparabile place would fetch minimum 100,000 even in1999. At peak in Ireland it would be worth 300,000. That is simply madnesss.

It is time to let market forces get to work, we let the market work when prices were going up, let it work on the way down.

As a Scotsman I also fail to understand Nama - every taxpayer should be going crazy over this - In Ireland it seems like there is a reluctant acceptance. This is in my opinion an issue worth revolution - why should the taxpayer pay the bill of developers, FF, and bankers?

Diarmuid

couerdelion wrote: »

Nobody foresaw that when borrowing money, or envisaged wage cuts.

That's blatantly false. If you don't forsee any wage cuts or potential job losses over the life of a 40 year mortgage, you have no one to blame except yourself.

Stress testing of a mortgage repayment and strict loan values should mitigate this risk. (For instance in France the rule is "Only one third of your monthly income can be used to service a mortgage on your main home (or rent payments if you are a tenant), any other mortgages, any loans, credit card repayments, and if applicable maintenance payments. The monthly cost of your proposed French mortgage plus the life assurance cover must be included as well.")

Unfortunately the Irish banks were too "smart" for that and the Irish public were too willing to go along with their irresponsible lending.

ART6

Diarmuid wrote: »

That's blatantly false. If you don't forsee any wage cuts or potential job losses over the life of a 40 year mortgage, you have no one to blame except yourself.

Stress testing of a mortgage repayment and strict loan values should mitigate this risk. (For instance in France the rule is "Only one third of your monthly income can be used to service a mortgage on your main home (or rent payments if you are a tenant), any other mortgages, any loans, credit card repayments, and if applicable maintenance payments. The monthly cost of your proposed French mortgage plus the life assurance cover must be included as well.")

Unfortunately the Irish banks were too "smart" for that and the Irish public were too willing to go along with their irresponsible lending.

Totally agree. If bank lending for mortgages had been restricted in the same way here, perhaps house prices wouldn't have gone through the roof in the first place, so leading to the bubble. That, however, would have required regulation, and given the stamp duty receipts the government had no incentive to do so. Typical FF approach. Grab the ready money and spend it without any long term strategy.

jmayo

Drumpot wrote: »

I agree and disagree.
...
disagree with your comments on individuals "blowing loans". Individuals in trouble are no less entitled to be looking for state subsidy then the banks. The ONLY differance is that bailing individuals out does not serve the greater good of the economy. .

And I dont believe people that took out mortgages that they cannot afford now should automatically be castigated. While there is personal responsibility on peoples part to be prudent, you cant expect everybody to know how much a bank should loan them, or how house prices will go.

I am not catisgating the unlucky who borrowed reasonable amount to buy a home they needed and have now lost their jobs.
But a lot of people were completly wreckless and saying it is the banks fault for lending it to them is a cop out.

SkepticOne wrote: »

This is a largely repeat of other posts in the thread which I have tried to address.

Sorry but I am just trying to reinforce the opinion that it is a bad idea to start bailing out individuals.
OK.

couerdelion wrote: »

Ah ok, sorry mis-read you.

I do get fed up with all the 'borrowed beyond your means' rubbish that gets spouted. The banks obviously agreed that people weren't borrowing beyond their means at the time and the problem is the economic decline.
Nobody foresaw that when borrowing money, or envisaged wage cuts.

Ever heard of personal responsibility for ones actions :rolleyes:
When did we start always trying to blame someone else for our bad decisions.

We all know how well run the banks were.
The ones controlling lending in the banks were on commission, thus it was in their own interest to push as many loans as possible.

Fine if you lost your job and now have problems paying, you deserve leeway. But what of the ones that borrowed 100%, plus used the credit card and credit union to furnish the place ?
What of the ones that did not have job security, what of the ones who had to rent a room in order to make repayments ?
A lot of people jumped on the much hyped property ladder, because they believed the myth that they had to buy because it was only going to increase.

A fair few people could see that Irish property prices were completely askew and vastly overvalued, thus did not buy.
Of course we were the idiots back in 2006 and now we are expected to pick up the pieces for those wise switched on ones of 2002-2007.

It is bad enough having to bail out the banks and the f***ing idiots that ran them into the ground, without having to bailout every tom dick and mary that chose to buy between 2000 and 2008.
Where do we draw the line ?

akkadian

jdivision wrote: »

who's going to pay for the Nama for individuals? The people who showed fiscal responsibility while all around them put money on credit cards, bought houses they shouldn't have and generally lived beyond their names. It's bad enough the bailouts we have coming now, I'm not in favour of bailing out individuals who made bad choices. And believe me I have plenty of problems with both nama and not nationalising the banks

I agree. It's very hard on those who lost jobs but it's ultimately a choice of bailing out the the conservative spending Irish people (those that DIDN'T buy overpriced houses and cars..) OR the liberal spenders (those that were too happy to spend spend spend on overpriced things. Constantine Georgiev (name might be spelled wrong) had it right I think, in his editorial in the Tribune or Independent. He basically said:

1) NAMA need to be properly regulated i.e no banking or property types (with vested interests) should dominate the comity. It needs to be a balanced comity that is responsible for helping to raise asset value responsibly, and sell off assets in auctions only when necessary and in the optimal possible manner.

2) The Irish tax-payer (in general - BOTH home owners with no job and negative equity, AND non mortgage holders) should have some guaranteed slice of any reduction in repayment on NAMA toxic debts.


Anyway, it's all a moot point ultimately. The obvious answer is huge cuts that are OPTIMIZED to be in areas that are not performing, and most importantly! NOT LIKELY TO START PERFORMING.
That is where the real trimming and sacrifice must be made.

For example, the cross border institutions (aimed at bridging the hate between protestants/catholics/unionists/loyalists/Republicans etc. etc. ) projects are very important to me out of respect for everyone in the North BUT, I think the UK needs to help with money for that now as their economy is in better condition and big enough to do so.

Inevitably, there needs to be public sector wage cuts and even redundancies (not preferable) if necessary. Reuductions in positions would have to be weighed against social welfare payout and severance of course.
If the economy fails, we all lose. Better to be poorer for a few years than poorer for many years.

However, I don't believe in cuts in the green energy sector. Subsisdies for students studying green energy postgrads etc. (the green energy area is performing) is a good idea and not hugely expensive, and the agriculture and fisheries sectors need to be maintained too.


Obviously, people have to expect wage cuts. How can this be made any clearer?
Heavy recession -> _DE_flation, peole are spending less money for goods and services AND can afford to be more competivie -> wage cuts across the board are logical. To not do that would be gross incompetance. Ireland needs to improve competitiveness. It's as simple as that. Sustainability of jobs is very important and at least the government is making progress with that -> i.e. subsidies for companies that employ Irish workers *subject to the usual condidtions.

I beleive puble sector wage spending cuts should figure hugely. And as I said, it's only logical to index wage cuts inline with the deflation, and even lower. The salary hikes from the boom times shoul to be UNDONE IMO. Please don't cut nurses wages though. They desserve mnore not less.

Capital projects like the new terminal 2 for the airport in Dublin should not be cut, as labor is cheap for that now. How many construction workers are out of work now??


I also want to say that I respect out trade unions. They are a symbol of integrity and respect for the worker as they fight for decent standards, but I would HOPE that they won't resist public sector wage cuts too much. These cuts are ESSENTIAL and logical.

Social welfare should be cut by 20 % at least I think. -Deflation/lower rents ......

The minimum wage needs to be lowered. Again, only logical given the deflation and lower rents.


Finally, and most importantly, there needs to be big cuts for those at the top - those that didn't guard us from the wolf (bad/corrupt banking practices)

As for blame! That's the easy part. It goes in the same order as any sailing ship. Captain on down..

Government ->Banks -> Property tycoons -> public

(in decreasing order of blame)

Yes SOME of the public are partly to blame. Some people really did spend too much and help inflate the bubble. It was naiive.
However, many did not and the ones that did not should be allocated shares in NAMA assets also. It's only fair.

I want to close by saying, it's better everyone eat their humbe pie for a few years than become third world citizens.

This is why we cant have a NAMA for people not developers:

http://www.thepropertypin.com/viewtopic.php?f=4&t=1859

Check out the range of incomes of borrowers!

and
http://www.thepropertypin.com/viewtopic.php?f=4&t=2132

40% of the demand in 2006 were investors.

These are the people you would be bailing out

SkepticOne

Deleted User wrote: »

This is why we cant have a NAMA for people not developers

It might be worth rereading the start of the thread where it is explained what constitutes ordinary people for the purposes of this discussion. If it was proposed that gamblers on the property market were to be helped then I would be against it just like I am the current NAMA proposal.

SkepticOne

jmayo wrote: »

Sorry but I am just trying to reinforce the opinion that it is a bad idea to start bailing out individuals.

If you merely repeat points that have been addressed earlier in the thread you don't reinforce your opinion but undermine it. It is maybe the case that you disagree with how those points are addressed but, if so, deal with that rather than repeating the same point.

akkadian

SkepticOne wrote: »

It might be worth rereading the start of the thread where it is explained what constitutes ordinary people for the purposes of this discussion. If it was proposed that gamblers on the property market were to be helped then I would be against it just like I am the current NAMA proposal.

exactly, I'm not on for fattening up the wallets of people that took chances with the country's growth by fueling the bubble to satisfy their own greed.
At the very least, if NAMA is going to be an entity that works or at least tries to work, for everyone.

Give the rewards (if there are any) to developers - how is that fair - they wouldn't exist without the Irish tax-payer. That's like usurping a bird's nest and taking it's eggs.

Give the rewards to the government (us in a way?). That can't really work. We ARE NOT the government.

Pledge all of the money to tax breaks! That wouldn't work because the government would just increase taxes to balance the tax breaks out, or try to anyway

In my opinion, these are very uncertain times. I don't believe in this bottoming out of the recession globally. It's temporary duct tape to me.
Any money collected by the government (that is superfluous to debt repayment etc) should be retained in gold and silver, mainly gold if possible. - real assets, things that retain value. I believe in highly conservative spending for the next 10 years, as the global economy is like a pensioner with a walking stick right now.

It's just a matter of time before H1N1 v2.0 or H34N11 or Iran, or North Korea happens or something happens to Meryl Lynch and the whole thing collapses again...the list is endless.
If anyone thinks that economic boom times are coming to any region in this period, they're crazy. As all of the financial institutions are saying, growth if there is any, will be slow and painful, and for places like California, Michigan, Spain, Ireland, and Greece etc. there won't be any.
Any money raised by the government through NAMA (that is superfluous to immediate debt repayment) IMO, needs to be used to buy assets that retain their value and increase value in times like these - gold, silver, platinum, copper etc.

There's more chance of the Euro, dollar or sterling rapidly losing value than there is of some new gigantic silver deposit find, and even if there were big deposit finds, it would retain some value, a currency is effectively worth nothing. Other than face value, every bank note costs about 4 cents to make and is effectively worth nothing.

SkepticOne

SkepticOne wrote: »

It might be worth rereading the start of the thread where it is explained what constitutes ordinary people for the purposes of this discussion. If it was proposed that gamblers on the property market were to be helped then I would be against it just like I am the current NAMA proposal.

Regardless of investors the information with the range of incomes of the borrowers is enough to say let them deal with it themselves. We cant be taking money from one section of society to give to another so that they can live in expensive housing.

SkepticOne

Deleted User wrote: »

Regardless of investors the information with the range of incomes of the borrowers is enough to say let them deal with it themselves. We cant be taking money from one section of society to give to another so that they can live in expensive housing.

If it was a case of arbitrary transfer of money from one set of citizens to another with no social benefit or no possibility of return, then I think most people would have no problem agreeing with you. However that is not what is being proposed here.

SkepticOne

SkepticOne wrote: »

If it was a case of arbitrary transfer of money from one set of citizens to another with no social benefit or no possibility of return, then I think most people would have no problem agreeing with you. However that is not what is being proposed here.

Im 100% behind you on helping the people and job instead of blowing it on developers and banks. 100%.

But I really dont think a NAMA for the average person could work. NAMA has a lower limit for loans. Could we even do this for peoples mortgages? We would have to base it on income to mortgage ratios or just for people who have lost their jobs. Then you have people who might say look we have children lets on of us "lose our job" and look after the kids and sure NAMA Will help us out.
Then you have the differences in accommodation types and some will say Im stuck in an 1 bed apartment that I cant afford I want a life I want a family I need more bedrooms for this.....

Its a mine field. The only way we can bail out the average person is through reforming the bankruptcy laws and then..........

a sovereign default or waiting until the bank guarantee runs out and choosing a bank to save.

Its going to cost us heavily no matter what we do. I can see your looking for a fairer way and Im glad some people are looking into and debating other options. I hate to hear people say or infer that there is no other option than NAMA. :mad: