Is Noonan in the room at all.

jetfiremuck

As the title suggests he stated that there would be no Ecb rate cut until Easter and here we are today with a cut!!!!. The 3.6 billion error was dismissed as human error. Time to get independent auditors in to bring transperency to this. Can someone explain why finding that we owe less would not impact the upcoming budget. Is it to save face and maintain credibility.

Zubeneschamali

jetfiremuck wrote: »

Can someone explain why finding that we owe less would not impact the upcoming budget.

Owing 2% less than we thought will cut our interest payments by 1 or 2 hundred million euros. Small beer beside the 10 billion we need to cut.

amen

The budget and what we owe are different things.

Currently we owe approx 148billion Euro.
So after finding the "missing". 3.7 we still owe 144.3billion. A very large amount of money which we have to pay back.

In order to pay this back the government creates a budget that pays for all our essential services such as health, police, teachers and also pays back any foreign debt.

Currently each year we spend about 16Billion more than we take in so the budget has to first look at ways to reduce this deficit so we only spend what we take in i.e. no more or at least very little borrowing.

If we assume that all of the 16billion deficit is used to pay back the 148billion that we owe then it would take 9 years 3 months.

If we reduce the amount that we owe to 144.3billion it still takes 9 years so at most we would be saving 3 month over 9 years.

Not a lot of saving.

WalterMitty

Baldy was on radio basically threatening banks to pass on the rate cuts.
This ignores the fact that banks are paying more for their funds than the rate they will be forced to charge meaning they are losing money. Why does that matter? Well ALL taxpayers own these banks and want to see some upside in their value so we can sell them on and recoup a few billion but more importantly if they are profitable they will grow capital and be more liekly to lend money to irish businesses and retail customers.
I know many struggling mortgage holders will benefit from a cut to rates but so will those who can easily afford their mortgages. If govenment decides to help mortgage holders in trouble fine but it should be more targetted than a blanket subsidy/discount on variable rate mortgages.

The_Thing

I think he'd make a great undertaker, he exudes an almost tangible aura of doom and gloom.

D1stant

The_Thing wrote: »

I think he'd make a great undertaker, he exudes an almost tangible aura of doom and gloom.

This is true. Confucus say 'Everytime Noonan farts, Panda dies'

Cubed

Not defending Noonan here but it is possible that the missing 3.6 million was just a reporting error on the face of financial statements sent to Europe, the same amount of money is still in the pot as was last week/month and what Noonan was basing his budget off of...

Bullseye1

One of the reasons the banks are in trouble is because there is a huge number of tracker mortgages. The people on variable rates have been subsidising the loses made on trackers. If the trackers get the automatic cut it's only fair that those on variable also get the cut.

WalterMitty wrote: »

Baldy was on radio basically threatening banks to pass on the rate cuts.
This ignores the fact that banks are paying more for their funds than the rate they will be forced to charge meaning they are losing money. Why does that matter? Well ALL taxpayers own these banks and want to see some upside in their value so we can sell them on and recoup a few billion but more importantly if they are profitable they will grow capital and be more liekly to lend money to irish businesses and retail customers.
I know many struggling mortgage holders will benefit from a cut to rates but so will those who can easily afford their mortgages. If govenment decides to help mortgage holders in trouble fine but it should be more targetted than a blanket subsidy/discount on variable rate mortgages.

ArmaniJeanss

Bullseye1 wrote: »

The people on variable rates have been subsidising the loses made on trackers. If the trackers get the automatic cut it's only fair that those on variable also get the cut.

So giving the benefits of a tracker to people who aren't on a tracker and never appplied for a tracker is 'only fair'. I don't quite get that.

I was offered, by Ulster Bank, a choice between a tracker and a 2-year-fixed reverting to variable (or tracker if still available). I chose to lock in the tracker immediately, despite my repayments for the first 2 years being €45pm more.
Why should those who chose the later option now get the benefits of the tracker?

And I also fail to see how you can square giving everyone the benefits of a tracker with your correct point that trackers are bad for the bank.

Bullseye1 wrote: »

One of the reasons the banks are in trouble is because there is a huge number of tracker mortgages.

I do accept trackers are a disaster for the banks by the way. Though its worth pointing out that because trackers were a 2002-2007 product that ~100% of people with trackers are in big negativity equity. Whereas not all variable rate mortgages are.
So us tracker people don't have much to crow about.

baddebt

Bullseye1 wrote: »

One of the reasons the banks are in trouble is because there is a huge number of tracker mortgages. The people on variable rates have been subsidising the loses made on trackers. If the trackers get the automatic cut it's only fair that those on variable also get the cut.

You signed up for variable , Your choice (in the terms of that , it does state that passing on any rate cut/increase is at the decrestion of the bank ) yep the banks should pass on this cut , but we know they won't , but don't be bashing those on trackers (saying you subsidise us blah blah blah ) ,
I signed up for Tracker (a wise choice for me ....well at least for the moment )...my choice .
we live and die by the choices we make

WalterMitty

The government on tv basically threatening banks to reduce rates for variable rate mortgage holders even if the cost of funding such mortgage for bank is higher! bonkers, there are an awfull lot of people paying variable rate mortgage who can easily pay their mortgages. Forcing banks to pass on rate cuts to such people is susbsidising their mortgages when such funds could remain in banks for benefit of majority of taxpayers and/or those really struggling to pay mortage.

Sudsy86

baddebt wrote: »

You signed up for variable , Your choice (in the terms of that , it does state that passing on any rate cut/increase is at the decrestion of the bank ) yep the banks should pass on this cut , but we know they won't , but don't be bashing those on trackers (saying you subsidise us blah blah blah ) ,
I signed up for Tracker (a wise choice for me ....well at least for the moment )...my choice .
we live and die by the choices we make

I dont think he was bashing...Is it not a known fact that Banks are loosing out on trackers and the only way to make up there losses is by increasing variable rate...

I agree yes a bad decision on picking a variable rate but does a person paying a higher variable rate due to increases since the country was pounded into submission deserve a break?

I am variable rate, didn't have the choice of a tracker but my mortgage was increased due to the recession...Would be nice to have a cut for a change...

Tefral

jetfiremuck wrote: »

Can someone explain why finding that we owe less would not impact the upcoming budget. Is it to save face and maintain credibility.

Say you owed your best friend €10k for a life saving event in your life.. You had to pay it back as soon as you could as your friend was doing you a favour and he had the money but could have done with it himself.... If you found €1k in the couch you couldnt go out and spend it in the pub you would give it to your friend so that you could be debt free sooner rather than later would you not?

The fact is we owe alot to alot of countries. We cant just derail our plans to rein in our spending because we found the few billion...

Armin_Tamzarian

cronin_j wrote: »

The fact is we owe alot to alot of countries. We cant just derail our plans to rein in our spending because we found the few billion...

We didn't really find a few billion, more that we discovered we owed less.
This money affects our total debt, it doesn't really have an impact on our deficit though.

To go back to your analogy.
You thought you owed 10,000 but now discovered that you only owe 9,800.
The money you have in your pocket now doesn't change, your total debt is just slightly lower.

ei.sdraob

amen wrote: »

The budget and what we owe are different things.

Currently we owe approx 148billion Euro.
So after finding the "missing". 3.7 we still owe 144.3billion. A very large amount of money which we have to pay back.

In order to pay this back the government creates a budget that pays for all our essential services such as health, police, teachers and also pays back any foreign debt.

Currently each year we spend about 16Billion more than we take in so the budget has to first look at ways to reduce this deficit so we only spend what we take in i.e. no more or at least very little borrowing.

If we assume that all of the 16billion deficit is used to pay back the 148billion that we owe then it would take 9 years 3 months.

If we reduce the amount that we owe to 144.3billion it still takes 9 years so at most we would be saving 3 month over 9 years.

Not a lot of saving.

To add under "best case scenario" (hey we know how those get revised down) we endup north of 220 billion or so in debt
in the same debt neighbourhood as Greece and Italy which apparently would be "sustainable"

Thats assuming the wildly optimistic growth materialises, they already had to revise down the figures few days ago due

sigh

Head The Wall

Sudsy86 wrote: »

I dont think he was bashing...Is it not a known fact that Banks are loosing out on trackers and the only way to make up there losses is by increasing variable rate...

I agree yes a bad decision on picking a variable rate but does a person paying a higher variable rate due to increases since the country was pounded into submission deserve a break?

I am variable rate, didn't have the choice of a tracker but my mortgage was increased due to the recession...Would be nice to have a cut for a change...

And what about us taxpayers that don't have any mortgage at all? I don't think it should be passed on to variable rate mortgage holders as the banks are costing the likes of me enough already.