Banks

JohnBoy

[At the request of some of the F & F readers, these trheads have been separated from the Cattle Price Bubble thread]

reilig wrote: »

So do you think they will reverse the cuts to these 3 ag support schemes if the bottom falls out of the cattle market and we go back to 2009 prices?
How much was your farm income up in 2011? Could you sustain a reduction by that % again and also bear the reduction in the support schemes?

No, of course they wont reverse those cuts, they cant, this country is broke, living off a lifeline from our troika benefactors. There's more to come next year. last year they raised direct taxes, this year they cut supports and raised indirect taxes, next year I'm guessing it'll be direct taxes again, the year after it'll be indirect taxes and supports. This is the way it's going to be until the books are at least somewhat balanced.

Cuts have been applied to every sector to one degree or other, and yes it could be said that agriculture has been hit worse than others, but agriculture is *right now* doing better than others too so it's to be expected that it's going to get cut more.

Urban dwellers won't have to pay the septic tank charges!

I know, that's why I said that every rural house will have to pay. There's more than just farmers effected by the septic tank charge, it's not a tax on farmers.

Every other group in society is protesting about far less cuts than the agricultural sector had. Why shouldn't the farmers kick up a stink? We didn't cause the recession.

I think the level of protest has in fact been quite low, all round, and most of the people suffering the most from this recession did not cause it. it was caused by mismanagement at the highest levels.

In fact, we lived in an agricultural recession for 20 years when banks didn't even want our custom while they pumped billion after billion into the construction sector. In hundreds of years time when all the ghost estates are demolished and paid for by our grandchildren, land will still be there and people will still need food. The banks or the government never look at it that way though. They were only ever interested in the quick buck!

yeah, and a quick buck is all they're interested in right now in their rush to give every man and his dog who wants to go milking a few hundred grand. they're banks, their purpose in life is to make as much money as possible for themselves and their shareholders. It's not really their fault (except for anglo, who were clearly cowboys of the highest order) it's the government's fault for not controlling them properly.

reilig

JohnBoy wrote: »

yeah, and a quick buck is all they're interested in right now in their rush to give every man and his dog who wants to go milking a few hundred grand. they're banks, their purpose in life is to make as much money as possible for themselves and their shareholders. .

Try going to the bank to borrow a grand today. They won't want to know you. How many people have gotten loans for a couple of hundred grand for to go into dairy? Very few I suspect. Those that did get loans have laid all land deeds and probably house deeds as collaterol. Sean Quinn didn't even have to lay his house deeds for a €3 billion loan from Anglo.

It's not really their fault (except for anglo, who were clearly cowboys of the highest order) it's the government's fault for not controlling them properly

That's the most laughable statement ever made about the banks. Haven't the Irish public bailed out every bank with exception of Ulster Bank (because its not Irish owned). You and I own AIB and BOI at this stage. How could it not be their fault? They all engaged in wreckless lending. They gave money to people who hadn't a hope of paying it back. To say its the government's fault for not controlling them is like blaming a doctor for a person who takes his week's supply of tablets in 1 night.

The banks ran the government and the country for the last 20 years and made a right c@ck up of it!!

gbee

reilig wrote: »

The banks ran the government and the country for the last 20 years and made a right c@ck up of it!!

Absolutely and the famous assassination of President Lincoln was because he was reintroducing reform to take power back from the banks to the publicly elected officials, another exponent of this philosophy was a President Jack Kennedy.

JohnBoy

A bank's purpose is to make as much money as possible for it's shareholders by any legitimate means.

They have no moral compass, only regulations.

The government/regulator decides what is or is not legitimate, so assuming a bank was operating within the rules (which AIB, PTSB and BOI seem to have been largely doing) then really they didnt do a whole lot wrong from a legal/regulatory standpoint.

The same governments that promoted light touch regulation also promoted unnecessary tax incentives to further fuel the fire, all so that they could bring in more and more construction related taxes to buy more and more votes and jobs for the boys.

Ultimate responsibility lies at the top.

Just to re-iterate I'm not including anglo in this. They clearly went above and beyond.

To use your medical analogy the doctor gave the junkie a week's supply of methadone every monday, and as long as the junkie staggered into the surgery the following monday (and presented his medical card) they kept giving the methadone.

and it's grossly irresponsible to give a junkie a week's supply of methadone in one go.

reilig

JohnBoy wrote: »

Just to re-iterate I'm not including anglo in this. They clearly went above and beyond.

Every bank did the same as anglo - anglo just did it worse than the others. We are bailing them all out!!

Tipp Man

the public finance deficit is a much bigger problem than the banks for this country and is more the reason for the cuts than the banks

We would be facing these cuts and increased taxes even if we had the best banks in the world. The Irish government is simply spending far too much money (irrespective of banks)

And there is a lot more "pain" to come

reilig

http://www.breakingnews.ie/ireland/people-were-seduced-by-banks-says-taoiseach-537928.html

Tipp Man

Isn't is a chicken and egg situation though

Yes the banks lent recklessly but people also borrowed recklessly as well. You only have to look around your own areas to see loads of people who were living way beyond their means

Whenever you see people queueing overnight to buy apartments in bog standard areas for ridiculous money then you know something is wrong

Kenny was right last week, the country went mad on borrowed money. The only problem i have is that Kenny didn't stand by his correct comments and bowed to the hysteria

JohnBoy

people were seduced by the banks, no argument there. my point is that those responsible for controlling the banks made a piss poor job of it.


since we're posting news articles about our great leaders.....

http://www.finfacts.com/irelandbusinessnews/publish/article_1010514.shtml

JohnBoy

people were mad to borrow, irish banks were mad to lend, foreign banks were mad to lend to irish banks.


people go mad, controlling madness is one of the roles of government. sadly our governments did the exact opposite and fuelled the madness.

reilig

JohnBoy wrote: »

people go mad, controlling madness is one of the roles of government. sadly our governments did the exact opposite and fuelled the madness.

Totally agree.
My opinion is that the reason why the Government could not (or did not) control the madness is that the banks were controlling the government. They were fueling an unsustainable boom or bubble which made the government look good. If, at the height of the boom in 2006, the government forced the banks to tighten up lending, lend sustainably and only lend to those who could actually pay it back, then FF would have been out on their arse within a wet week!!

Vandy West

The really scary part is that all the cuts to date and the cuts proposed for the next two years are solely to reduce the yearly deficit, from 20 billion a year(2009) to about 3 billion(2014) a year!

Wait till we have to start spending 1/5 of our national income on debt repayment (We will owe about 150 billion after 2014, say 8 billion a year debt repayment and national income of about 40 billion).

Tora Bora

The whole of Europe, is on a financial life support machine, INCLUDING, Germany, believe it or not:eek:
A MAJOR credit event in either Spain or Italy, would have a massive domino effect across Europe and indeed the world. Germany, would take a serious hit.
Italy, came very near to having that credit event in December. It was only prevented, by the ECB flooding the European banking system with dirt cheap loans, at just over 1%. ALL the banks, in Europe literally grabbed the money in a few weeks.
What did they do with it? They simply turned around and bought up billions and billions of soverign debt (bonds), belonging to the weak European states like Italy. The banks make a very nice profit into the bargain, with the bonds paying a coupon of 5% to the banks, and their cost of borrowing is only 1%.
Talk about a PONZI scheme! Hundreds of billions of ECB cash, being handed out to the banks at 1%, being used to lend to bust insolvent governments! The collateral behind all this lending are nothing more than JUNK bonds, issued by these insolvent states. Italy, Greece, Portugal, Ireland etc.:o:eek::mad: Crazy stuff!

5live

Vandy West wrote: »

The really scary part is that all the cuts to date and the cuts proposed for the next two years are solely to reduce the yearly deficit, from 20 billion a year(2009) to about 3 billion(2014) a year!

Wait till we have to start spending 1/5 of our national income on debt repayment (We will owe about 150 billion after 2014, say 8 billion a year debt repayment and national income of about 40 billion).

Thats just to get the budget deficit to 3% of GDP. To comply with the fiscal compact we will have to cut total government debt to 60% of GDP by 2034(?) which will involve running a budget surplus of approx 3% of GDP for 20 years. That is another 6% of GDP to be taxed/cut within a few years of 2014.

These are the good days folks:o

If you want to sort out bank regulation in this country then transfer the Dept of agriculture en masse to the regulators office and it will be sorted within 6 months.

Who caused it is almost immaterial at this stage. The question is whether the EU will absorb approx 30 billion of anglo debt we accepted as public debt to prevent contagion of the european banking system(which didnt work, as practically every european bank is in much the same situation as BOI at best, and AIB at worst).

gbee

JohnBoy wrote: »

sadly our governments did the exact opposite and fuelled the madness.

No they did not. They did it deliberately, especially, Biffo, he is a very well educated man, he thought out the strategy carefully, and his plan has succeeded perfectly.

The problem is that the Irish electorate believed he was working for them instead of Munich.

It's all been a plan to crush us and give up any semblance of sovereignty, what was done was done deliberately, we could go back over each and every intervention made to see how deliberately it was contrived to have what you call the opposite effect, it had the effect it was DESIGNED to have, that is to crush us and it has done so.

JohnBoy

Are you talking about biffo the taoiseach or biffo the finance minister?


because as taoiseach he was only along for the ride.

I'm not entirely sure if McCreevy would have done anything different, there are those that say he was sent to europe precisely because he was looking to calm things down, but what McCreevy started biffo certainly finished.


But as I said already, ultimate responsibility lies at the top. and there was only one man at the top for a very long time. The rat that then deserted the ship he'd sank.

irishh_bob

reilig wrote: »

Try going to the bank to borrow a grand today. They won't want to know you. How many people have gotten loans for a couple of hundred grand for to go into dairy? Very few I suspect. Those that did get loans have laid all land deeds and probably house deeds as collaterol. Sean Quinn didn't even have to lay his house deeds for a €3 billion loan from Anglo.



That's the most laughable statement ever made about the banks. Haven't the Irish public bailed out every bank with exception of Ulster Bank (because its not Irish owned). You and I own AIB and BOI at this stage. How could it not be their fault? They all engaged in wreckless lending. They gave money to people who hadn't a hope of paying it back. To say its the government's fault for not controlling them is like blaming a doctor for a person who takes his week's supply of tablets in 1 night.

The banks ran the government and the country for the last 20 years and made a right c@ck up of it!!

your doctor analogy re _ the banks is pretty lame , the goverment reaches every facet of the country including the banks , the financial regulator is a public servant appointed by the goverment , he ignored what sean fitzpartrick and co were up to , actually i believe bertie told him to turn a blind eye to what they were up to , the banks were an essential part of the property boom , they supplied the funds to the developers , the developers projects provided thousands of jobs and billions of euro in revenue to the goverment which the goverment then spent buying votes through massive increases in social welfare and public sector pay

goverment policy and bank policy were joined at the hip in this country for over a decade

irishh_bob

Tipp Man wrote: »

Isn't is a chicken and egg situation though

Yes the banks lent recklessly but people also borrowed recklessly as well. You only have to look around your own areas to see loads of people who were living way beyond their means

Whenever you see people queueing overnight to buy apartments in bog standard areas for ridiculous money then you know something is wrong

Kenny was right last week, the country went mad on borrowed money. The only problem i have is that Kenny didn't stand by his correct comments and bowed to the hysteria

true but the fact of the matter is that individual borrowers have not been bailed out but the banks in ireland and by proxy in europe ( they lent to irish banks ) have had thier bacon saved , the banks debts have been loaded on to the tax payer , i agree that even without the bank bailout , the deficit is too high and cuts were required but the banking bailout turned us from a country with an unhealthy imbalance between income and expenditure to a debt ridden basket case facing a multi generation repayment plan

the bank bailout is immoral and is a symptom of ( IMO ) our unhealthy relationship with the EU

id have perfered we let the banks fail , saved deposit holders to the tune of a quater of a million and cut the deficit over night if nesscesery

Tipp Man

irishh_bob wrote: »

true but the fact of the matter is that individual borrowers have not been bailed out but the banks in ireland and by proxy in europe ( they lent to irish banks ) have had thier bacon saved , the banks debts have been loaded on to the tax payer , i agree that even without the bank bailout , the deficit is too high and cuts were required but the banking bailout turned us from a country with an unhealthy imbalance between income and expenditure to a debt ridden basket case facing a multi generation repayment plan

the bank bailout is immoral and is a symptom of ( IMO ) our unhealthy relationship with the EU

id have perfered we let the banks fail , saved deposit holders to the tune of a quater of a million and cut the deficit over night if nesscesery

Do you know how much it would have cost to save just deposit holders??

irishh_bob

Tipp Man wrote: »

Do you know how much it would have cost to save just deposit holders??

i know that its a pill which most people would gladly swallow , savings bond holders and external investors is an ongoing bitter one , the course of action which was taken served no ones interest including the political class

Tipp Man

irishh_bob wrote: »

i know that its a pill which most people would gladly swallow , savings bond holders and external investors is an ongoing bitter one , the course of action which was taken served no ones interest including the political class

I have heard a figure of EUR 87billion mentioned a few times but have yet to see actual data for this

If this is correct then it would have cost more (certainly as much) to save the depositors alone than the current route

irishh_bob

Tipp Man wrote: »

I have heard a figure of EUR 87billion mentioned a few times but have yet to see actual data for this

If this is correct then it would have cost more (certainly as much) to save the depositors alone than the current route

how could it be more than the current route when the current plan covers all deposits plus those who lent money to irish banks

had a threshold of 250 k on deposits been put in place , no individual savers bar bono and large corporations would have gotten stung

iceland protected thier savers , they defaulted and had to slash spending and thier currency got devalued , had we been forced to exit the euro as a punishment by germany and france for burning thier banks , id still say it was a better deal than the current one , i think we should leave the euro and slash spending