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Can someone please explain to me why NAMA is even needed?

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    #62
    SkepticOne
    Closed Accounts Posts: 6,718 ✭✭✭SkepticOne


    me_right_one wrote: »
    And what amount of money is adequate to spend on buying a house in your opinion? From talking to any old timers, you will quickly get a lesson on inflation. Back in the day, people earned 3 pence a week, then a schilling, then a pound, then three pound, then twenty pounds etc. Prices / wages only ever go one way, so it only makes sense that people bought up while they could! Sure there's fluctuations, sometimes even recessions, but generally whatever you pay for something now will seem cheap in 20 years. It always works that way.
    But house prices in the bubble did leave behind ordinary prices which roses at a much more moderate pace. See attached graph3785760797_465d1bfa6f_o.gif
    To say the couple you knew were daft to pay 400k for their house in Maynooth is ridiculous. Its all about supply and demand, if thats what they were making at the time, thats what they were worth, bubble or not. How much do you think they should have paid? I guarantee you they would still get 280k - 300K for it now. So all in all, that couple would be down about 60k each. They will prob be out about 1k per year for the rest of their lives. Not great, but not a doomsday scenario, and it certainly wasnt their fault!
    It is all supply and demand but a huge amount of this demand in the latter stages of the bubble was speculative based on anticipated future rises. It was a sort of collective madness.

    However I also very much disagree with djpbarry's suggestion that ordinary people are in some way to blame for the banks failure to run their business correctly. If you overspend on a house your responsibility is to pay back the loan for that house. That is where your responsibility ends. You are not responsible for the banks not being able to raise capital on the markets or other such problems. It is up to the banks as businesses to make sure that they are sufficiently capitalised.

    Each group has its separate area of responsibility. The banks failed in theirs.


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    #63
    [Deleted User]
    Posts: 17,378 ✭✭✭✭ [Deleted User]


    NAMA is essential... Bank I work for went bust and the Belgian government ended up collapsing. Icelandic banks go bust and look what happened up there. American banks go bust and it's chaos. We've done well to keep all our banks running as far as I'm concerned.

    This isn't about bailing out the developers.. Every single bit of business in this country relies on banking and at the moment, they can't lend which is making all businesses suffer. I'm sick of this "bailing out the developers" stigma the red-tops (Indo included) have given the plan.. What's the alternative? The banks need these toxic assets off their balance sheets. End of story.

    Irish people just love to bitch and moan that life isn't fair. What are you actually moaning about?
    Joe Soap has to pay back his loans? Tough. We signed up to the loans.
    The developers getting bailed out? Doesn't anyone understand what a limited company is.
    Golden Circle? Where?

    The worst thing is the crazy claims that this thing is costing 54 billion or whatever. It's not.. A five year old could understand that they're selling the assets and getting most of it back. Even if it's not all of it, the help to the economy over the next 5 years will cover the loss. And since when does everyone have an economics degree and know about banking?! Seriously.. Reading the newspapers and keeping up with the current scandels doesn't give any of ye economics degrees. I've hardly read one informed post in this whole thread. It's like reading a newspaper with thirty angry editors.

    Most people in this country but will scream blue murder at any proposal. Doesn't anyone remember the enormous stimulus plan the US implememented? Doesn't anyone actually read bloomberg and see how things happen in other countries? Of course not.. the Daily Star and shit conversation over pints is enough to form an opinion apparently.


    Final point: Yes the banks fuked up. But there's no point going on about the past and letting bad sentiment make bad decisions.


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    #64
    djpbarry
    Registered Users Posts: 13,104 ✭✭✭✭djpbarry


    Sand wrote: »
    What your are forgetting is that at a time of record high employment, record wage increases, record low interest rates and incredibly easy access to credit...people were paying what they could reasonably afford.
    As long as none of those parameters changed, yes, and unfortunately for many, they did. People gambled on the good times continuing and they lost.
    SkepticOne wrote: »
    However I also very much disagree with djpbarry's suggestion that ordinary people are in some way to blame for the banks failure to run their business correctly.
    Oh, wait now. Where did I say that?


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    #65
    SkepticOne
    Closed Accounts Posts: 6,718 ✭✭✭SkepticOne


    djpbarry wrote: »
    Oh, wait now. Where did I say that?
    Sorry my mistake. You did indeed not say that.


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    #66
    Liam Byrne
    Closed Accounts Posts: 18,163 ✭✭✭✭Liam Byrne


    Deleted User wrote: »
    Bank I work for went bust and the Belgian government ended up collapsing

    All the more reason NOT to create NAMA, so!!!! Let this pathetic and incompetent government collapse!


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    #67
    Amhran Nua
    Closed Accounts Posts: 4,124 ✭✭✭Amhran Nua


    Liam Byrne wrote: »
    All the more reason NOT to create NAMA, so!!!! Let this pathetic and incompetent government collapse!
    Not to mention the banks seem to be quite capable of raising capital on their over €100 billion of residential mortgages without any help from NAMA.


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    #68
    jackofalltrades
    Registered Users Posts: 3,253 ✭✭✭jackofalltrades


    Deleted User wrote:
    And since when does everyone have an economics degree and know about banking?! Seriously..
    Well since I'm going to be paying for many years into the future for the catastrophic mess created by people with economics degres, I think I've earnt the right to have an opinion on the matter.
    A five year old could understand that they're selling the assets and getting most of it back.
    A five year old would probably understand aswell that its madness paying close to €10 million for an empty field thats only worth €1 million at best.(Refering to RTE's 'PrimeTime' show example of a 16.5 acre field in Edenderry bought for €11.5 million.)


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    #69
    gurramok
    Closed Accounts Posts: 13,992 ✭✭✭✭gurramok


    Deleted User wrote: »
    NAMA is essential... Bank I work for went bust and the Belgian government ended up collapsing. Icelandic banks go bust and look what happened up there. American banks go bust and it's chaos. We've done well to keep all our banks running as far as I'm concerned.

    This isn't about bailing out the developers.. Every single bit of business in this country relies on banking and at the moment, they can't lend which is making all businesses suffer. I'm sick of this "bailing out the developers" stigma the red-tops (Indo included) have given the plan.. What's the alternative? The banks need these toxic assets off their balance sheets. End of story.

    Irish people just love to bitch and moan that life isn't fair. What are you actually moaning about?
    Joe Soap has to pay back his loans? Tough. We signed up to the loans.
    The developers getting bailed out? Doesn't anyone understand what a limited company is.
    Golden Circle? Where?

    The worst thing is the crazy claims that this thing is costing 54 billion or whatever. It's not.. A five year old could understand that they're selling the assets and getting most of it back. Even if it's not all of it, the help to the economy over the next 5 years will cover the loss. And since when does everyone have an economics degree and know about banking?! Seriously.. Reading the newspapers and keeping up with the current scandels doesn't give any of ye economics degrees. I've hardly read one informed post in this whole thread. It's like reading a newspaper with thirty angry editors.

    Most people in this country but will scream blue murder at any proposal. Doesn't anyone remember the enormous stimulus plan the US implememented? Doesn't anyone actually read bloomberg and see how things happen in other countries? Of course not.. the Daily Star and shit conversation over pints is enough to form an opinion apparently.


    Final point: Yes the banks fuked up. But there's no point going on about the past and letting bad sentiment make bad decisions.


    Wrong.

    http://www.irishtimes.com/newspaper/opinion/2009/0915/1224254555311.html


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    #70
    [Deleted User]
    Posts: 17,378 ✭✭✭✭ [Deleted User]


    gurramok wrote: »
    Wrong.

    http://www.irishtimes.com/newspaper/opinion/2009/0915/1224254555311.html

    i stopped at "may".. the cost isn't going to be known for years.

    i'm sure it will be a loss but i don't see many alternatives.


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    #71
    SkepticOne
    Closed Accounts Posts: 6,718 ✭✭✭SkepticOne


    Deleted User wrote: »
    i'm sure it will be a loss but i don't see many alternatives.
    What in your opinion are the specific downsides of the alternatives that have been proposed?


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    #72
    starbelgrade
    Closed Accounts Posts: 20,739 ✭✭✭✭starbelgrade


    Deleted User wrote: »
    NAMA is essential... Bank I work for went bust and the Belgian government ended up collapsing. I


    If only the same would happen here, we'd all be a lot happier.

    You bitch about Joe Soap being stuck with HIS toxic loans, but you are happy to commit to the bailing out the f*ckers who helped him get there, without the limited liability that protects the golden circle.

    Shame on you.

    Shame on you.


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