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ECB, developers, bankers,..who else will we blame?
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The finger of blame points directly at The Department of Finance.
Not the builders, the banks, the politicians nor the ECB.
I doubt few if any in the DoF lost their job livelihood, pension or have been forced to work unbearable hours for years since the crash.
And now that same organisation is complaining about the central bank.0 -
NoMore MrNiceGuy wrote: »And now that same organisation is complaining about the central bank.
http://www.finance.gov.ie/sites/default/files/DOF%20macro%20prudential%20comments%20%288Dec14%29.pdf
Which, in fairness, came after thishttp://www.independent.ie/business/personal-finance/michael-noonan-new-central-bank-mortgage-deposit-rules-too-strict-30782154.html
FINANCE Minister Michael Noonan has said he believes proposed Central Bank rules on mortgage deposits should be softened.
He also said he’ll be pushing the Central Bank not to implement the rules in full in January.0 -
Catching up on news, interesting to just recall Klaus Regling's assessment. Briefly, he sayshttp://www.irishtimes.com/business/financial-services/klaus-regling-tells-inquiry-policy-decisions-added-fuel-to-the-fire-1.2073752
He said that before 2008, when the government had to introduce the bank guarantee, counter-cyclical fiscal or macro prudential policies could have moderated the boom and cushioned the recession.Mr Regling said interest rates were lowered as euro area integration got underway, and Irish banks enjoyed unprecedented access to cross-border funds as foreign banks entered the Irish market and intensified competition.
“At the time, cross-border regulatory and supervisory structures had not kept up with this process, though since then many of these points have been addressed through banking union,” he said.0 -
Good thing we have this banking colapse enquiry going on. I've heard the finacial civil service and politicians have explained how they played no part in the Irish economy diving into mountains of debt to feed spiraling housing prices that could not be sustained by internationaly competitive wages. With those in charge still enjoying pay rises to their pensions which are multiples of the average national wage how could they have known anything was going wrong.0
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[QUOTE=
Ireland and Ireland alone is solely responsible for the mess it is in.[/QUOTE]
no actually it was the bankers-Ireland made have handled the recovery process badly but it always was and always will be bankers who bring us down-they're just bad people-simple as that0 -
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The idea that it was Ireland alone that caused the problem is belied by the fact that the euro has been a disaster for all participants. Local macro-prudential fixes wouldn't have been needed if the euro didn't exist because in the abscence of the euro monetary measures, like higher interest rates during the boom and lower interest rates in any bust causing the currency to depreciate, essentially a self correcting mechanism, would have been easy to implement.0
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The finger of blame points directly at The Department of Finance.
Not the builders, the banks, the politicians nor the ECB.
I doubt few if any in the DoF lost their job livelihood, pension or have been forced to work unbearable hours for years since the crash.- The Monetary (i.e. Central Banking, usually a quasi-independent central bank)
- The Fiscal (i.e. government taxation and spending)
The end result of all of this insanity at both national and European levels was readily predictable. The whole idea of Germany/Northern countries and Greece/Ireland/etc using the same currency should have struck any sane person as an insane idea that could only end in tears and blood.
What I could not have expected was the determination of the various Eurocrat entities to ensure that the peoples of the peripheral countries paid 100 cents on the Euro for every mistake. Your banks are insolvent because they went nuts with all those low interest Euros? You must recapitalise them and don't let them default on anything - especially foreign bondholders. Heck you can't even buy bank bonds that are trading on exchanges at pennies on the Euro, because that would look like default and cause the risk of "contagion."
Same thing in Greece. Your economy collapsed (because you had 17-21% interest rates in the '90s that was appropriate to the Greek market and then much lower interest rates in the first years of the Euro) and you've got 60% youth unemployment? Screw them, just make sure Goldman Sachs and the German banks that stupidly lent you money that never should have been lent get it all back, at any cost. Oh and make sure you don't leave the Volkerkerker that is the Euro, so while you drown in your massive debt pile for the next century you won't be able to devalue your currency and make your exports and tourism cheaper, or those foreign imports like German cars more expensive ...
Yet still the political classes and some sychphants continue to insist that this as all the fault of national governments and had nothing whatsoever to do with the desire of EU psychpaths to build a European superstate regardless of the wishes of the European people.0 -
Not sure I agree that the Euro currency was responsible for the colapse of the Irish economy. Cheap interest rates in the Euro could equally have allowed credit for investment in business development and sources of employment instead of the boom in residential property investment that was characteristic of the boom time Irish economy. To my mind it was the failure of Irish government to keep housing costs within reach of workers on average wages that made some sort of bust in the pyramid scheme property ladder unstoppable. The cost of buying even the so called "affordable" units in new developments went past seven times the national average industrial wage in many parts of the country. We have one of the lowest population densities in the Euro area so I had thaught it would have been obvious that utilising this space could allow for genuinly affordable housing and kept Ireland with a cost of living competitive with the rest of the Euro currency countries. Instead regulations and costs of new developments were left to climb and banks allowed lend people far more than could be normally repayed to feed what was not a free market because of increased restrictions on new developments.
Heard some coverage of the banking enquiry with Bertie Ahern agressively questioning how could he have known what was in people's bank accounts. The obvious fact he was denying any knowledge of was that in an economy, with essential requirements for life like shelter climbing in price without control and even with encouragement, he was making it a lot less likely that workers could maintain anything in their bank account.
Later in the week I then heard the FFail finance spokesperson explaining they should stop the clock because he was fed up of listening to the answer of the Labour party leader to his question about their budget projections in the run up to the bust. It is comical that FFail can now twist this "banking enquiry" into stage show for politicians to wash their hands of any knowledge of fundamental aspects of the Irish economy and their role in its collapse.0 -
Yet still the political classes and some sychphants continue to insist that this as all the fault of national governments and had nothing whatsoever to do with the desire of EU psychpaths to build a European superstate regardless of the wishes of the European people.
Well first of all and despite all the hype, the majority of voters in the most recent EU parliamentary elections voted for parties that have as their objective the building of a closer and more integrated Europe, so no it is not against the wishes of the majority of the peoples of Europe.
As for the idea that the Euro is to blame for all of this, again it is an over simplification, it is like a craftsman blaming all his mistakes on the loss a tool despite the fact that he had an array of other tools available to do the job. For instance the Irish government could have done exactly the same as the Swiss government to prevent the development of a property bubble:
- Cash deposit of 30% for demonstrable savings not a gift etc.
- Maximum monthly repayments restricted to 20% of net monthly salary
- No tax reliefs
Put a quick stop to it.0 -
An economy has two distinct, equally important and equally powerful controls under Keynesian theory.
- The Monetary (i.e. Central Banking, usually a quasi-independent central bank)
- The Fiscal (i.e. government taxation and spending)
The end result of all of this insanity at both national and European levels was readily predictable. The whole idea of Germany/Northern countries and Greece/Ireland/etc using the same currency should have struck any sane person as an insane idea that could only end in tears and blood.
What I could not have expected was the determination of the various Eurocrat entities to ensure that the peoples of the peripheral countries paid 100 cents on the Euro for every mistake. Your banks are insolvent because they went nuts with all those low interest Euros? You must recapitalise them and don't let them default on anything - especially foreign bondholders. Heck you can't even buy bank bonds that are trading on exchanges at pennies on the Euro, because that would look like default and cause the risk of "contagion."
Same thing in Greece. Your economy collapsed (because you had 17-21% interest rates in the '90s that was appropriate to the Greek market and then much lower interest rates in the first years of the Euro) and you've got 60% youth unemployment? Screw them, just make sure Goldman Sachs and the German banks that stupidly lent you money that never should have been lent get it all back, at any cost. Oh and make sure you don't leave the Volkerkerker that is the Euro, so while you drown in your massive debt pile for the next century you won't be able to devalue your currency and make your exports and tourism cheaper, or those foreign imports like German cars more expensive ...
Yet still the political classes and some sychphants continue to insist that this as all the fault of national governments and had nothing whatsoever to do with the desire of EU psychpaths to build a European superstate regardless of the wishes of the European people.
One other area of responsibility is that of the Central bank and financial regulator, how did they fail us so badly?
Yet their still seems to be little protection for the little people, and US still hasn't reversed the Glass Steagle. No use going to get all upset about something that's just going to happen again and again.0 -
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Tea drinker wrote: »Easy money
Yet their still seems to be little protection for the little people, and US still hasn't reversed the Glass Steagle. No use going to get all upset about something that's just going to happen again and again.
I just looked up Glass Steakle on Wikapedia and do not understand how reversing the Glass Steagle would impact on the Irish Economy. There was ment to be some reversal of parts of the Glass Steagle Act in the run up to the US financial crisis. How is this US financial regulation impacting the economy in Ireland?
Even more action at the banking enquiry which I just read is subject to an internal investigation because of alleged self-censorship. They now don't want to listen to the head of the property developer's favourite Bank at the time it cost billions of euro to the Irish tax payer. Why are they having an internal investigation into self-censorship when they are so publicly limiting what they listen to?0 -
Blaming the euro is like blaming cakes for your obesity.
Incidentally that's another area where it's hard to find personal responsibility in this country.0 -
Blaming the euro is like blaming cakes for your obesity.
That may be true of overweight people, but it doesn't directly translate into macroeconomics.
The monetary and macroeconomic tool-kits available to central banks and governments have been built-up over the past 500 years, creating a rich exhibition of financial machinery as impressive (to economists, at any rate) as any fleet of tanks or jets.
The European single currency has effectively created a situation where much of that machinery has been taken out of the smaller countries, whilst being retained by the richer countries.
So for example, whilst the ECB may effectively print money for Germany via QE, Greece, who needs QE more than anyone, cannot avail of QE because of how the statutes of the ECB that have been written. Those statutes were influenced mostly by... guess who... Germany, and the wealthy economies.
The same goes for fiscal policy. Small countries like Belgium must risk their economic growth prospects in order to lie in the "Procrustran Bed" of the Fiscal Compact, and keep their fiscal balance within an utterly arbitrary and silly range to placate the Germans.
In short, the position of comparing vulnerable peripheral countries to fat people, is deeply ideologically driven, when in fact a large part of the problem is these countries have been deprived of the monetary and fiscal tools that sovereign governments usually rely upon to mitigate and prevent economic shocks, and to stimulate domestic growth.0 -
A Tyrant Named Miltiades! wrote: »Must we always rely on such imperfect analogies? We're not trying to teach primary school students macroeconomics here. Sometimes analogies are important to rid a logical point from all ideological baggage, but in your case, the very analogy is weighed down in ideology: essentially that of fat greedy pigs who can only lose their excess fat by hard work and exercise.
That may be true of overweight people, but it doesn't directly translate into macroeconomics.
The monetary and macroeconomic tool-kits available to central banks and governments have been built-up over the past 500 years, creating a rich exhibition of financial machinery as impressive (to economists, at any rate) as any fleet of tanks or jets.
The European single currency has effectively created a situation where much of that machinery has been taken out of the smaller countries, whilst being retained by the richer countries.
So for example, whilst the ECB may effectively print money for Germany via QE, Greece, who needs QE more than anyone, cannot avail of QE because of how the statutes of the ECB that have been written. Those statutes were influenced mostly by... guess who... Germany, and the wealthy economies.
The same goes for fiscal policy. Small countries like Belgium must risk their economic growth prospects in order to lie in the "Procrustran Bed" of the Fiscal Compact, and keep their fiscal balance within an utterly arbitrary and silly range to placate the Germans.
In short, the position of comparing vulnerable peripheral countries to fat people, is deeply ideologically driven, when in fact a large part of the problem is these countries have been deprived of the monetary and fiscal tools that sovereign governments usually rely upon to mitigate and prevent economic shocks, and to stimulate domestic growth.
The Deutsche Mark was already so influential, the German Central Bank influenced all other currencies by their decisions already.0 -
A Tyrant Named Miltiades! wrote: »Must we always rely on such imperfect analogies? We're not trying to teach primary school students macroeconomics here. Sometimes analogies are important to rid a logical point from all ideological baggage, but in your case, the very analogy is weighed down in ideology: essentially that of fat greedy pigs who can only lose their excess fat by hard work and exercise.
That may be true of overweight people, but it doesn't directly translate into macroeconomics.
The analogies used by people are only useful in betraying their bias. For example, a few years ago, there was many analogies offered painting Trichet's ECB as being a fireman trying to rescue countries from burning buildings.
This was at a time when the ECB was apparently doing its best to undermine the Euro as a trustworthy currency, had made and was making the Greek crisis far worse as it panicked at the results of its earlier mistakes, and its communication strategy was essentially anarchic chaos.
This is to contrast with Draghi's ECB who abated the Eurozone crisis with just a few words which made clear that the ECB would defend the Euro to the hilt.0 -
Everyone thinks success in life involves working really hard, or getting really lucky, or working hard and getting lucky.
But really, to be successful in life, you just have to not screw up. What do we mean by that?- Don't have kids before you're married or in a stable permanent relationship
- Don't have kids you can't afford
- Don't buy crap you can't afford
- Don't buy cars you can't afford
- Don't buy houses you can't afford
- And don't marry unreliable people
That's it. If everyone took this level of personal responsibility seriously, there'd have been no financial crisis in this country.0 -
I don't agree everyone thinks the same about success in life. I think it is more specific to the individuals philosophy of what is important.
From a biology perspective success could be considered to be seen in people who reproduce the most. Waiting until being married to try to reproduce fits in with the trend in this country for first babies to be born to increasingly older mothers. As far as I have heard marriage is on average happening at older ages in recent years. It also has ment some people leave this until it is too late and from a biology perspective because they do not reproduce they could be seen as a failure.
In biology terms a reckless borrower who dies owing the bank a few million euro while having ten children could be seen as more successful than someone who works hard follows your advice and passes away with a good credit record and no children. If everyone in this country took seriously the level of personal responsability you describe there would be far less births and from a purely biological perspective that could not be seen as success.
In some countries which have seen dramatic falls in births like Japan there is talk of the economic difficulty created by the aging population not having young workers to support the increasingly elderly average.
I heard a tax analyst commenting on the radio this morning about property tax and mentioned a hope that property values would continue to rise. If we keep encouraging a high value to property here we are continuing to run our country for the benefit of banks and investment fund balance sheets and pushing our economy towards the biologicaly failing example of Japan with the only diference being the open migration from other parts of europe making the population statistics here less dramatic.0 -
Everyone thinks success in life involves working really hard, or getting really lucky, or working hard and getting lucky.
But really, to be successful in life, you just have to not screw up. What do we mean by that?- Don't have kids before you're married or in a stable permanent relationship
- Don't have kids you can't afford
- Don't buy crap you can't afford
- Don't buy cars you can't afford
- Don't buy houses you can't afford
- And don't marry unreliable people
That's it. If everyone took this level of personal responsibility seriously, there'd have been no financial crisis in this country.
Untrue unless you are paying for your cars and houses out of petty cash. If you are employed you can afford X. If you are not employed, you can afford less than X. Unless you can absolutely positively guarantee you will always be in employment, and will never have a reduction in income, then you are at risk of buying stuff now that you wont be able to afford in future. Your employment prospects and your earning power are not in your control.
The belief that the current situation will continue reliably into the future is one false belief that is consistently shown up through history. The most recent crisis also showed up another false belief often held, that all risks are understood and controlled.
Everytime you take out a loan, a risk that you will not be able to repay the loan is taken on by *both* sides in the contract. If either side enters into that contract without acknowledging that, then they deserve what they get.0 -
Everyone thinks success in life involves working really hard, or getting really lucky, or working hard and getting lucky.
But really, to be successful in life, you just have to not screw up. What do we mean by that?- Don't have kids before you're married or in a stable permanent relationship
- Don't have kids you can't afford
- Don't buy crap you can't afford
- Don't buy cars you can't afford
- Don't buy houses you can't afford
- And don't marry unreliable people
That's it. If everyone took this level of personal responsibility seriously, there'd have been no financial crisis in this country.
People claim they have this right to have a bunch of kids and that we should subsidise them in social housing with extra cash every week.0 -
FreudianSlippers wrote: »I agree with this to a large extent, particularly the children thing which always annoys me.
People claim they have this right to have a bunch of kids and that we should subsidise them in social housing with extra cash every week.
Is there any serious party or group which claims they have a right to a bunch of kids in their manifesto? Is that a right that needs to be stated and defended by major political groups these days?
With the ponzi scheme that is the western social welfare state, you're not subsidising their kids. Your subsidising your right to a pension. When you retire, who exactly is going to earn the tax euros to cover your unproductive years? Their kids.
The real threat to your economic future is not people having a bunch of kids. Its people having no kids.0 -
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Yet still the political classes and some sychphants continue to insist that this as all the fault of national governments and had nothing whatsoever to do with the desire of EU psychpaths to build a European superstate regardless of the wishes of the European people.
Bollocks it would.0 -
The Pope, the weather, GAA, etc etc0
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Blaming the euro is like blaming cakes for your obesity.
Incidentally that's another area where it's hard to find personal responsibility in this country.
No it's really not. It might be like eating cake if cake was made essential to the economy, governments gave tax breaks to eat it, doctors suggested the eating if it was relatively harmless and the EU kept producing more and more cake.0 -
So you accept that Ireland (for example) had "awful governance", but you're trying to insist that if it had its own currency to dick around with, everything would have been dandy?
Bollocks it would.
Of course it would. Momentary policy is the main instrument that affects asset prices and the Irish CB has fairly high interest rates historically.0 -
Everyone thinks success in life involves working really hard, or getting really lucky, or working hard and getting lucky.
But really, to be successful in life, you just have to not screw up. What do we mean by that?- Don't have kids before you're married or in a stable permanent relationship
- Don't have kids you can't afford
- Don't buy crap you can't afford
- Don't buy cars you can't afford
- Don't buy houses you can't afford
- And don't marry unreliable people
That's it. If everyone took this level of personal responsibility seriously, there'd have been no financial crisis in this country.
It would be perfectly easy to ignore most of that and just inherit wealth. And achieving all that may not make the person financially sound -- he could have an illness. Or lose a job despite not buying stuff he couldn't afford before hand0 -
Eugene Norman wrote: »Of course it would. Momentary policy is the main instrument that affects asset prices and the Irish CB has fairly high interest rates historically.0
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With the ponzi scheme that is the western social welfare state, you're not subsidising their kids. Your subsidising your right to a pension. When you retire, who exactly is going to earn the tax euros to cover your unproductive years? Their kids.
The real threat to your economic future is not people having a bunch of kids. Its people having no kids.
It is worth noting that if people had no kids your future isn't great even in a state with no welfare.0 -
Plenty of other tools at the disposal of the state which were not used - pretty much everything was geared towards inflating property prices.
I agree.
During the boom I worked at a printers and made copies of costings for a builder for an estate of good quality houses. The different types of house had a total cost of about 120,000euro. I can't remember did this include the price of the land they were built on. This figure is a long way from what these houses were marketed for.
The affordable housing scheme even sold houses and apartments well above building costs to people who had to prove low earnings to qualify for the scheme.0 -
On VinB he showed the front of the Irish Times, Noonan feels the new Central bank rules on Mortgage lending are too restrictive.0
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Is there any serious party or group which claims they have a right to a bunch of kids in their manifesto? Is that a right that needs to be stated and defended by major political groups these days?
With the ponzi scheme that is the western social welfare state, you're not subsidising their kids. Your subsidising your right to a pension. When you retire, who exactly is going to earn the tax euros to cover your unproductive years? Their kids.
The real threat to your economic future is not people having a bunch of kids. Its people having no kids.0
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