Profit from some Banks and Nama

realitykeeper

djpbarry wrote: »

Steps have been made to reduce the deficit - yes or no?

Reducing the deficit results in less borrowing to meet day-to-day expenditure (or "growing the economy" in your world) and, therefore, "tackles" national debt - yes or no?

Yes but a deficit is still a deficit and as long as there is a deficit the national debt continues to grow. Even reducing the deficit to zero will not reduce the debt.

I believe the next recession will be a currency crisis, and the fiat currencies will tumble in value. This would be great if Ireland had significant gold reserves. The small amount of gold Ireland does have is stored abroad and that could be a problem. You see when Ireland needs its gold, other country`s will need theirs and no doubt there will be competing claims to the same physical gold.

realitykeeper

andrew wrote: »

Iceland does borrow money. In fact, they'll be borrowing money (some short term T-Bills) literally TOMORROW.

"Short term" being the significant point. At least their grandchildren will not be paying for their greed, hubris and stupidity.

andrew

realitykeeper wrote: »

"Short term" being the significant point. At least their grandchildren will not be paying for their greed, hubris and stupidity.

Actually I had a bit more of a look and they issue some longer term stuff too.

Anyway, I thought you said they don't borrow at all? And you do realise that they still have a debt/gdp ratio of 94%, so their grandchildren have plenty to pay for.

realitykeeper

realitykeeper wrote: »

Yes but a deficit is still a deficit and as long as there is a deficit the national debt continues to grow. Even reducing the deficit to zero will not reduce the debt.

I believe the next recession will be a currency crisis, and the fiat currencies will tumble in value. This would be great if Ireland had significant gold reserves. The small amount of gold Ireland does have is stored abroad and that could be a problem. You see when Ireland needs its gold, other country`s will need theirs and no doubt there will be competing claims to the same physical gold.

Tumble in value vs what exactly?

All of the non fiat currencies?

FreudianSlippers

realitykeeper wrote: »

I did not start this thread.

According to the President of Iceland (and me) the Icelandic solution to the crisis could have been adopted by any of the modern economies including the United States with its population of over 300,000,000.00

... and you believe that?

aido79

realitykeeper wrote: »

I did not start this thread.

According to the President of Iceland (and me) the Icelandic solution to the crisis could have been adopted by any of the modern economies including the United States with its population of over 300,000,000.00

This might help explain a few things to you and make you think twice about your idolation of the Icelandic "solution":

http://www.washingtonpost.com/news/wonkblog/wp/2015/06/17/the-miraculous-story-of-iceland/

Without its own currency Ireland would have been an almost unbearable place to live by following the Icelandic model.

djpbarry

realitykeeper wrote: »

Yes but a deficit is still a deficit and as long as there is a deficit the national debt continues to grow.

Is that not precisely the point that I and others were trying to make? All the while you insisted that nothing was being done to tackle the debt.

realitykeeper wrote: »

I believe the next recession will be a currency crisis...

Because?

johnnyskeleton

realitykeeper wrote: »

"Short term" being the significant point. At least their grandchildren will not be paying for their greed, hubris and stupidity.

Mod Note:

If we can avoid these one line assertions please, this isn't the Cafe. Particularly since this comment doesn't actually address the point. You asserted that Iceland was growing without borrowing and when this was contradicted you changed the goal posts. If you want to assert something, by all means go ahead. But if challenged you should either be able to back it up or else accept that you overstated your position.

KingBrian2

The initial uproar to Nama was that it was a house for property developers. We see now it is not. It is more like a treasury responsible for the health of the economy as we saw the property developers went to court over Nama so far from it being just for the Dublin construction industry it has proven to be very adept at managing the accounts of the nation.

The property developers suffered more from Nama than the general public. I see that as a good sign. Others will disagree I know but considering how bad the Central Bank governed the banking sector this has been a marked success. It is uncomfortable looking over at Europe and seeing the consequences of austerity but we are fortunate that the economy responding well to improved oversight.

realitykeeper

johnnyskeleton wrote: »

Mod Note:

If we can avoid these one line assertions please, this isn't the Cafe. Particularly since this comment doesn't actually address the point. You asserted that Iceland was growing without borrowing and when this was contradicted you changed the goal posts. If you want to assert something, by all means go ahead. But if challenged you should either be able to back it up or else accept that you overstated your position.

Actually I have not responded to that yet. When I do, I`ll be sure not to change the goalposts.

realitykeeper

Deleted User wrote: »

Tumble in value vs what exactly?

All of the non fiat currencies?

Probably precious metals and to a less extent non fiat currencies.

realitykeeper

FreudianSlippers wrote: »

... and you believe that?

Of course. The Icelandic solution is the obvious one irrespective of scale. In any case Iceland is hardly a pilot project.

realitykeeper

aido79 wrote: »

Without its own currency Ireland would have been an almost unbearable place to live by following the Icelandic model.

The pain you are so desperate to avoid will come to Ireland with a vengeance with the next recession while Iceland will be leaving it behind in the rear view mirror. Ireland lived it up on credit during the celtic tiger years. Sooner or later, one way or the other, those years of excess must be paid for in full with interest. If you can`t do the time, don`t do the crime.

realitykeeper

djpbarry wrote: »

Is that not precisely the point that I and others were trying to make? All the while you insisted that nothing was being done to tackle the debt.
Because?

The debt is the debt and the deficit is the deficit. Two different things. Eliminating the deficit will do nothing to eliminate the debt.

The next recession may be a currency crisis due to:
Inflated stock markets while low interest rates are still a reality. Also, even though QE has stopped for the time being in the US/UK, it still happened so the US dollar/sterling are already bubble currencies with the Euro catching up quickly. Wouldn`t hold my breath when Janet Yellen speaks of hiking rates and if she does it will be nominal at best.

realitykeeper

KingBrian2 wrote: »

It is uncomfortable looking over at Europe and seeing the consequences of austerity but we are fortunate that the economy responding well to improved oversight.

"Improved oversight" - Shouldn`t that be "hundreds of billions in borrowed euro."

beeno67

realitykeeper wrote: »

Of course. The Icelandic solution is the obvious one irrespective of scale. In any case Iceland is hardly a pilot project.

http://www.reuters.com/article/2015/04/02/us-iceland-economy-insight-idUSKBN0MT0WE20150402
This is an interesting article on Iceland. It may be a little too early to say how Iceland has done. Perhaps wait for a full 10 years to pass from the recession and compare Iceland and Ireland then. My bet would be on Ireland to be in a better situation but only time will tell.

realitykeeper

realitykeeper wrote: »

Probably precious metals and to a less extent non fiat currencies.

All fiat currencies will collapse in value vs all precious metals and which non-fiat currencies?

Any logic as to why?

Rightwing

realitykeeper wrote: »

Probably precious metals and to a less extent non fiat currencies.

Problem ie very evident as we speak. The markets will react violently if/when the Fed increases interest rates. Dow is off 1000 points this month at the mere thought of a .25% hike in September. The central banks have backed themselves into an unwinnable position, they now must appease the markets.

Ultimately, there will be a massive QE4 programme. So we should expect high inflation. I'm not sure about precious metals as it's hard to value them. I wouldn't be a buyer of gold above $1200, even though it's rallying nicely at the moment. Food prices are markets I can see go considerably higher.

realitykeeper

beeno67 wrote: »

http://www.reuters.com/article/2015/04/02/us-iceland-economy-insight-idUSKBN0MT0WE20150402
This is an interesting article on Iceland. It may be a little too early to say how Iceland has done. Perhaps wait for a full 10 years to pass from the recession and compare Iceland and Ireland then. My bet would be on Ireland to be in a better situation but only time will tell.

I would be very happy to take that bet, although 5 years would more than suffice.

realitykeeper

Deleted User wrote: »

All fiat currencies will collapse in value vs all precious metals and which non-fiat currencies?

Any logic as to why?

As you say, all fiat currencies will collapse relative to precious metals but I think the currencies which would be afflicted the most would be those that have been subjected to the most QE. Currencies that would have some resilience would be free floating i.e. not pegged to the major fiat currencies and which are issued (carefully) by newly emerging capitalist countries. In the advanced economies, the Swiss Franc may be one of the safer ones but that is only conjecture on my part.

KingBrian2

realitykeeper wrote: »

The pain you are so desperate to avoid will come to Ireland with a vengeance with the next recession while Iceland will be leaving it behind in the rear view mirror. Ireland lived it up on credit during the celtic tiger years. Sooner or later, one way or the other, those years of excess must be paid for in full with interest. If you can`t do the time, don`t do the crime.

Nobody wants to go back to recession unless you desire wrecking the economy with overspending and banking fraud.

FreudianSlippers

KingBrian2 wrote: »

Nobody wants to go back to recession unless you desire wrecking the economy with overspending and banking fraud.

Recessions are an important part of the growth cycle though - it's failing to recognise that important fact that caused our last 2 recessions to be so severe.

djpbarry

realitykeeper wrote: »

The pain you are so desperate to avoid will come to Ireland with a vengeance with the next recession while Iceland will be leaving it behind in the rear view mirror.

Iceland’s recession-proof now?

realitykeeper wrote: »

Eliminating the deficit will do nothing to eliminate the debt.

Shifting the goalposts, once again – nobody said that eliminating the deficit will eliminate the debt. Stupid comment.

realitykeeper wrote: »

The next recession may be a currency crisis…

May be? You said it will be – which is it?

realitykeeper wrote: »

…I think the currencies which would be afflicted the most would be those that have been subjected to the most QE.

So currencies that have been subjected to QE will lose value?

Wow. Insightful stuff.

realitykeeper wrote: »

… the Swiss Franc may be one of the safer ones but that is only conjecture on my part.

As opposed to virtually everything else you’ve posted?

realitykeeper

djpbarry wrote: »

Stupid comment.

How moderate of you.

aido79

realitykeeper wrote: »

The pain you are so desperate to avoid will come to Ireland with a vengeance with the next recession while Iceland will be leaving it behind in the rear view mirror. Ireland lived it up on credit during the celtic tiger years. Sooner or later, one way or the other, those years of excess must be paid for in full with interest. If you can`t do the time, don`t do the crime.

From reading your posts on this thread and others it's like you are hoping things will go badly for the Irish economy just so you can attempt to prove that you are in some way right about the bank bailouts being a bad idea even though you don't seem to understand what could have happened if they had not gone ahead.

FreudianSlippers

realitykeeper wrote: »

. In the advanced economies, the Swiss Franc may be one of the safer ones but that is only conjecture on my part.

Market seems to have spoken in the last two days and chosen the Euro as their default "safe" currency.

K-9

Mod:

Handbags down please. Attack the post not the poster thank you.

Rightwing

FreudianSlippers wrote: »

Market seems to have spoken in the last two days and chosen the Euro as their default "safe" currency.

No, it's all about whether the Fed Reserve will raise interest rates or not. A world economy in turmoil and there will be no increases and the € will appreciate significantly.

CruelCoin

Rightwing wrote: »

No, it's all about whether the Fed Reserve will raise interest rates or not. A world economy in turmoil and there will be no increases and the € will appreciate significantly.

Not really. Its rather more to do with the crash in the Chinese stock markets.

People are crapping themselves that a reduction in Chinese growth will impact negatively on their trade predictions.

The Chinese are looking at a rate cut, the prospect of which is having a greater effect than an American one.

fliball123

BoJack Horseman wrote: »

I think you are overstating the potential value of a re-privatised AIB.

Also, as things stand, NAMA wont make a profit..... a small loss is the most likely outcome.

Overall, the financial crisis wont see a profit for the state.
And if it did, lowering our already low income tax rates would be the worst place to spend it.

Sorry Low income tax rates ..can you explain this nonsense statement?

fliball123

andrew wrote: »

I'm fairly sure that that borrowing mainly went to cover that little bank bailout we had, as well as the massive deficit at the time. I'd like to see some evidence that increases in government expenditure are fuelling the GDP growth we're currently seeing.

Oh wait there is no evidence of that, see page 6 of the Central Bank's quarterly bulletin. Specifically, 'public consumption' versus every other component of national income shown on that table, as well as the associated commentary on the following pages.

This is false the main area of borrowing over the last decade was nothing to do with banks it was the difference of what we take in v.s what we pay out. Just look at this we are nearly 200 billion in debt about 64 billion is for the banks and this figure is reducing as AIB , BOI and nama are starting to turn profits. If they sell AIB that will reduce the figure further, reports are AIB could go for 20billion so the rest if for overspending on welfare and public sector pensions and pay

fliball123

realitykeeper wrote: »

So you agree. The growth is fueled with borrowed money. If the government had not bailed out the banks, those with mortgages would have their mortgages written off and this would would enable them to pay more toward education, healthcare etc. The Icelandic government did this and their economy is now growing without borrowing money.

false we had already a debt of 130/140 billion due to overspending in this area with out any bank going into trouble..The banks are a sideshow in this country we would of got to the same levels of debt without the banks due to our spending

fliball123

andrew wrote: »

No. Government expenditure fell, hence it could not have contributed to growth, since growth is an upward movement. All it did was reduce the size of the fall.



Those two things do not follow.




Iceland does borrow money. In fact, they'll be borrowing money (some short term T-Bills) literally TOMORROW.

Government spending has not fallen at all ..can you show me any stats on that?

fliball123

fliball123 wrote: »

Government spending has not fallen at all ..can you show me any stats on that?

http://www.tradingeconomics.com/ireland/government-spending

fliball123

Deleted User wrote: »

http://www.tradingeconomics.com/ireland/government-spending

So lets look at that in detail and I will point out 3 things to you, firstly your graph stops at 2013 and spend has gone up since that year so its above that as can be seen from my link you can see that we are nearly back up to the spend of 2007 before we had the crash. secondly we also will be paying a payrise above increments for all 300k public sector workers this year. and thirdly there is no mention in this report of the fact that irish water will not be taken off the balance (spend over 1/2 a billion a year) sheet of the government so all saving made on spending over the years of the downturn will be gone by this time next year and we will be be spending more than the high point in 2007 when the 3 points take effect.

http://www.tradingeconomics.com/ireland/government-spending

fliball123

fliball123 wrote: »

So lets look at that in detail and I will point out 3 things to you, firstly your graph stops at 2013 and spend has gone up since that year so its above that as can be seen from my link you can see that we are nearly back up to the spend of 2007 before we had the crash. secondly we also will be paying a payrise above increments for all 300k public sector workers this year. and thirdly there is no mention in this report of the fact that irish water will not be taken off the balance (spend over 1/2 a billion a year) sheet of the government so all saving made on spending over the years of the downturn will be gone by this time next year and we will be be spending more than the high point in 2007 when the 3 points take effect.

http://www.tradingeconomics.com/ireland/government-spending

The graph does not stop at 2013.

How anyone can look at the graph and say that "Government spending has not fallen at all" is beyond me. Yes we are now returning to a spend similar to before the crash, but in between 2009 -> 2015 we have been spending less, meaning spending has fallen. Undoubtedly.

If the 300k public sector pay increases total close to €500m, then you might be right ( €1.6k per person?).

The Government paid for Water provision in 2013 too. The figures above won't not have the spend in it. They'll never have been 'removed'.

fliball123

Deleted User wrote: »

The graph does not stop at 2013.

How anyone can look at the graph and say that "Government spending has not fallen at all" is beyond me. Yes we are now returning to a spend similar to before the crash, but in between 2009 -> 2015 we have been spending less, meaning spending has fallen. Undoubtedly.

If the 300k public sector pay increases total close to €500m, then you might be right ( €1.6k per person?).

The Government paid for Water provision in 2013 too. The figures above won't not have the spend in it. They'll never have been 'removed'.

No Irish water was being paid out of motor tax at that stage and the additonal cost of giving he 100 euros to people who signed up has to be taken in aswell, they have admitted they are trying to get it off balance sheet which it will not at least not for this year. So we will be above the spend of the highest peak back in 2007 by the end of the year. Anyways its a side argument to the main topic of the thread. All this has to do with Andrews post saying that spending has dropped and stating that it has nothing to do with growth and then has nothing about the borrowing of money in this equation when these borrowings are being used as a stimulus for growth.

fliball123

fliball123 wrote: »

No Irish water was being paid out of motor tax at that stage and the additonal cost of giving he 100 euros to people who signed up has to be taken in aswell, they have admitted they are trying to get it off balance sheet which it will not at least not for this year. So we will be above the spend of the highest peak back in 2007 by the end of the year. Anyways its a side argument to the main topic of the thread. All this has to do with Andrews post saying that spending has dropped and stating that it has nothing to do with growth and then has nothing about the borrowing of money in this equation when these borrowings are being used as a stimulus for growth.

Which is clearly true.

fliball123

Deleted User wrote: »

Which is clearly true.

Dropped from when..it dropped for a couple of years (during the crash) and is clearly rising again I have given you 3 reasons why by the end of the year it will have risen above the all time high of 2007 so it has not dropped and will be above its hightest peak ever by the end of the year..

K-9

fliball123 wrote: »

So lets look at that in detail and I will point out 3 things to you, firstly your graph stops at 2013 and spend has gone up since that year so its above that as can be seen from my link you can see that we are nearly back up to the spend of 2007 before we had the crash. secondly we also will be paying a payrise above increments for all 300k public sector workers this year. and thirdly there is no mention in this report of the fact that irish water will not be taken off the balance (spend over 1/2 a billion a year) sheet of the government so all saving made on spending over the years of the downturn will be gone by this time next year and we will be be spending more than the high point in 2007 when the 3 points take effect.

http://www.tradingeconomics.com/ireland/government-spending

Mod:

You're going way off topic from the subject in the opening post, which is about the banks.

Leave the PS pay stuff for another thread thank you.

fliball123

K-9 wrote: »

Mod:

You're going way off topic from the subject in the opening post, which is about the banks.

Leave the PS pay stuff for another thread thank you.

I was talking about government spend not ps pay specifically with regard to this.

gaius c

Someday wrote: »

So if we sell or float AIB and let’s say we get €22 Billion, take €20 Billion off what we borrowed to bail them out. That leaves us a saving on repayments of about 1 billion and 2 Billion over?

Let's say I sold my banger of a car for €1.2 million...