The Kingston story: Bidders fail to pay up for auctioned cows

54and56

Bullocks wrote: »

This has me thinking of the AIB ad "backing brave " . I wonder will they still run it with the dairy farmer on it !

There's a difference between brave and reckless!!

Also, don't forget banks sell money, that's the business they are in. Just because they agree to lend it doesn't mean it's an endorsement of your plan or credentials. All they care about is that the collateral pledged will make them whole should the loan go tits up.

Bullocks

Je_suis_Jean wrote: »

There's a difference between brave and reckless!!

Also, don't forget banks sell money, that's the business they are in. Just because they agree to lend it doesn't mean it's an endorsement of your plan or credentials. All they care about is that the collateral pledged will make them whole should the loan go tits up.

Oh you don't have to tell me about banks ! I've sailed close to the wind with them and its not nice

OttoPilot

Water John wrote: »

Well Otto, that's is not as daft as you might think.
There is a significant body of economists that believe the right course of action was for ECB to print money at the time. May be we would have been saved exporting a generation and ten years stagnation.
There is more than one solution.

Completely inappropriate became it bails out and rewards those who took on too much risk.

Addressing another poster, if a farmer was basing his investment decision on the sums in '08 and not taking into account his repayment ability should the market deteriorate, he should lose everything because he's an idiot. Same as many property developers from the boom.

coolshannagh28

OttoPilot wrote: »

Completely inappropriate became it bails out and rewards those who took on too much risk
.

With the benefit of hindsight would the fed have bailed out Lehman Brothers

whelan2

Je_suis_Jean wrote: »

There's a difference between brave and reckless!!

Also, don't forget banks sell money, that's the business they are in. Just because they agree to lend it doesn't mean it's an endorsement of your plan or credentials. All they care about is that the collateral pledged will make them whole should the loan go tits up.

Have given out about ulster bank many times here. The one thing though if you are made jump through hoops to get money it makes you think twice do you need it. This thing of getting same day approval for up to 30k or whatever bank of ireland do is risky stuff.

20silkcut

Je_suis_Jean wrote: »

^^^ This 100%. Why should farmers who roll the dice and get all the upside profit if it works out have no downside if it doesn't whilst others like mf240 understand basic finance and work hard to grow their business in a financially sustainable manner?

Have those advocating that farmers shouldn't have to pay the piper when the inevitable result of their poor/greedy/careless decision making catches up with them ever heard of Moral Hazard? .

What you say is 100% correct logical and correct.
Except that when the Irish government bailed out the banks with our money we all shared in the debt of the Irish banks.

The government set a precedent there basically f*uck moral hazard. They demonstrated on a massive scale and in a very public fashion that debt does not have to be paid off.

When the government are doing it everyone else is going to try it.

Farmer Ed

MIKEKC wrote: »

There wouldn't be much difference in drystock profitability between 08 and now

There's one he'll of a difference between dairying profitability between 08 and now.

54and56

whelan2 wrote: »

Have given out about ulster bank many times here. The one thing though if you are made jump through hoops to get money it makes you think twice do you need it. This thing of getting same day approval for up to 30k or whatever bank of ireland do is risky stuff.

It's only risky for borrowers who are acting impulsively and haven't stress tested their business plan. As long as there is good collateral supportin the loan application there is little risk for the bank.

Milked out

whelan2 wrote: »

Have given out about ulster bank many times here. The one thing though if you are made jump through hoops to get money it makes you think twice do you need it. This thing of getting same day approval for up to 30k or whatever bank of ireland do is risky stuff.

Don't worry boi make you jump thru plenty hoops. Took a good while for me to organise finance with them

Sam Kade

Milked out wrote: »

Don't worry boi make you jump thru plenty hoops. Took a good while for me to organise finance with them

AIB also, with their ring Naas for a loan, no such thing as going into to your local bank for a loan anymore.

OttoPilot

20silkcut wrote: »

What you say is 100% correct logical and correct.
Except that when the Irish government bailed out the banks with our money we all shared in the debt of the Irish banks.

The government set a precedent there basically f*uck moral hazard. They demonstrated on a massive scale and in a very public fashion that debt does not have to be paid off.

When the government are doing it everyone else is going to try it.

But the banks' owners did not get to keep their shares (effectively) because they were diluted so much they are now worthless.

Yet you're saying farmers should keep their land and all its value while current bank shareholders (pension funds, tax payers) shoulder the cost?

Bass Reeves

whelan2 wrote: »

Have given out about ulster bank many times here. The one thing though if you are made jump through hoops to get money it makes you think twice do you need it. This thing of getting same day approval for up to 30k or whatever bank of ireland do is risky stuff.

All the banks are this way now. Gone are the day you could get loan approval at the first meeting. However if the present rules were in place between 2003-2005 I would not have over 60 acres of land now.

20silkcut wrote: »

What you say is 100% correct logical and correct.
Except that when the Irish government bailed out the banks with our money we all shared in the debt of the Irish banks.

The government set a precedent there basically f*uck moral hazard. They demonstrated on a massive scale and in a very public fashion that debt does not have to be paid off.

When the government are doing it everyone else is going to try it.

Hindsight is 20/20 vision. Truth is the government made a mistake that broke the country that night. Some mentioned about would the US government rescue Lehman if they knew the result in March 2008. However would the Irish Government have given the blanket guarantee in the form they gave it. All they had to do was guarantee new bonds, not all bonds. I think in hindsight neither would the government nationalize Anglo. In truth it was the EU that forced them to pay the bondholders completely in the end to stop contagion.

Few people realize that our defict was also cause by Government overspending on wages and on public spending and with a tax base that was predicated on property taxes which also collapsed.

MIKEKC wrote: »

There wouldn't be much difference in drystock profitability between 08 and now

I would have to disagree, finishing margin have been completely squeezed. As well processors and supermarkets have specs in place that have limited finishers choice of animal. In 2008-13 (until the horse meat scandal) processors killed a lot of out of spec bulls over 24 months and even over 30 months. This market has now disappeared, these were some of the most profitable cattle I ever sold. Since then costs have risen fertlizer by about 25% and feed prices the same.

Sam Kade wrote: »

AIB also, with their ring Naas for a loan, no such thing as going into to your local bank for a loan anymore.

This is a huge issue banks no longer take the local knowledge factor into account. It would be impossible now for a lads who is poor with bookwork to borrow money

20silkcut

OttoPilot wrote: »

But the banks' owners did not get to keep their shares (effectively) because they were diluted so much they are now worthless.

Yet you're saying farmers should keep their land and all its value while current bank shareholders (pension funds, tax payers) shoulder the cost?

Yes and of course those shareholders many of them were made up of the very same tax payers who bailed them out.

It's ok for small people to lose.


It's ok for farmers to have their farms re-possessed but the further up you go the rules change.
The big boys can get their money back if their bets don't come through.
Just saying like.

When banks take the high moral ground on moral hazard just keep that in mind.

BoatMad

20silkcut wrote: »

What you say is 100% correct logical and correct.
Except that when the Irish government bailed out the banks with our money we all shared in the debt of the Irish banks.

The government set a precedent there basically f*uck moral hazard. They demonstrated on a massive scale and in a very public fashion that debt does not have to be paid off.

When the government are doing it everyone else is going to try it.

This is an incorrect comparison

The Irish state recapitalised the banks to allow them to continue functioning so that YOU and I wouldn't loose our money

you or I didnt "share " in any debt.

The actions of the state , in no way are justification to move the banks away from prudent lending decisions or in any way changes their approach to moral hazard

the simple fact is , the responsibility rests almost entirely with the borrower. If you fail to meet your payments you are subject to enforcement and thats the way the cookie does and must crumble

( thats not to say banks may take accounts of alternative methods to secure repayment )

The banks "owe" us nothing

BoatMad

20silkcut wrote: »

Yes and of course those shareholders many of them were made up of the very same tax payers who bailed them out.

It's ok for small people to lose.


It's ok for farmers to have their farms re-possessed but the further up you go the rules change.
The big boys can get their money back if their bets don't come through.
Just saying like.

When banks take the high moral ground on moral hazard just keep that in mind.

Gods knows , I have runs ins with banks,

But the banks "owe" us nothing. The decision to prevent them failing was primarily done to protect the state and its people. If you lost your deposits or your salary was lost , you be a bit " pissed off"

Investors in banks are protected in the same way as depositors , primarily because investors in banks are low return as they are seen as low risk. Change that risk level by allowing banks to fail and you see what happened in 2008 with lehmans

OttoPilot

20silkcut wrote: »

Yes and of course those shareholders many of them were made up of the very same tax payers who bailed them out.

It's ok for small people to lose.


It's ok for farmers to have their farms re-possessed but the further up you go the rules change.
The big boys can get their money back if their bets don't come through.
Just saying like.

When banks take the high moral ground on moral hazard just keep that in mind.

Who are these "big boys" who got their money back? The majority of bank bondholders (pension funds, low risk investment funds) lost money on bank bonds because they were forced to sell them very cheaply, due to the default risk. The people who made money are the speculative funds who bought them at rock bottom prices and were repaid in full, but they bought them knowing they were taking a risk they would be paid at all.

screamer

I think the main thing people in general fail to remember, is that when you borrow from a bank to purchase something, you don't own that something till the last payment is made on time and in full.
Same as if you secure a loan against an asset, they basically own your asset until you make that last full and final payment. I can understand the emotional attachment farmers have to land especially that which has transcended generations, but realistically, putting your farm/ house/ whatever up as collateral against a loan effectively means it's no longer yours, like it or not.
I really dislike banks, they are a necessary evil, but make no mistake, they're no ones friend. They'll sweet talk you and make you feel all important till you sign on the dotted line. Then, if you can't pay back, they'll destroy you, but it's just "business" after all..... to them.

BoatMad

OttoPilot wrote: »

Who are these "big boys" who got their money back? The majority of bank bondholders (pension funds, low risk investment funds) lost money on bank bonds because they were forced to sell them very cheaply, due to the default risk. The people who made money are the speculative funds who bought them at rock bottom prices and were repaid in full, but they bought them knowing they were taking a risk they would be paid at all.

Im beginning to realise its not worth arguing with the " banks screwed the taxpayers" brigade , most have actually no knowledge of how banks work, how the money supply works why the Troika arrived here, where the money actually went and the mechanisms of how the banks were recapitalised

instead they parrot the hard left agitator line " of " they screwed us " etc

BoatMad

screamer wrote: »

I think the main thing people in general fail to remember, is that when you borrow from a bank to purchase something, you don't own that something till the last payment is made on time and in full.
Same as if you secure a loan against an asset, they basically own your asset until you make that last full and final payment. I can understand the emotional attachment farmers have to land especially that which has transcended generations, but realistically, putting your farm/ house/ whatever up as collateral against a loan effectively means it's no longer yours, like it or not.
I really dislike banks, they are a necessary evil, but make no mistake, they're no ones friend. They'll sweet talk you and make you feel all important till you sign on the dotted line. Then, if you can't pay back, they'll destroy you, but it's just "business" after all..... to them.

actually this isn't the case at all. It all depends on the structure of the loan and the type of collateral. The banks may have a completely unsecured loan ( Ive had several of those over the years ) , partly secured , or fully secured.

To recover a loan, the bank must seek a court judgement against you in essence they must show you have failed to live up to your side of the contracted undertaking, even then a court may not find favour with the bank, may delay, or may order alternative arrangements . The banks may have to then decide to progress the cased to a higher court etc . Typically in Ireland unlike the US personal loans are " full recourse " loans , and are not secured solely against a particular asset , i.e. the bank can seek judgement and recover more then the declared collateral if that collateral doesnt meet the value of the loan. IN certain cases they are non-recourse loans where the bank can only act against the nominated asset

In the case of horse purchases , even then there are rules that prevent the bank from arbitrarily repossession of the asset, especially where a certain number if payments have been made.

Its not as simple as you outline it at all.

as for

f you can't pay back, they'll destroy you, but it's just "business" after all..... to them.

banks are unemotional, they dont " destroy " anything, They merely seek to protect their business where you the borrower does not live up to you contractual commitments

if anything its borrowers who " destroy " themselves

as for " sweet talking " you, Ive yet to hear any bank " sweet talk " me on anything

screamer

BoatMad, it is that simple TBH, and if people actually stopped to realise this very simple structure of you borrow you don't own till you pay last payment, (yes sure you might have the use of that new car or whatever, it may be in your name, but if you don't pay for it, they'll take it back) or worse, you borrow with personal guarantee or by putting up asset against loan then you effectively give the banks your asset. (Yes, they have to go to court to get their hands on it, but usually, that is not a problem).
The only exception is an unsecured loan, which these days is virtually impossible to secure. Banks will go to any lengths to recoup their money, even getting mortgage judgements etc...... so I think if people can do without bank loans, they're better off.

And yes, they banks set out to get their money back, it's their business, but they will and they do destroy families and family businesses in the process, it may be a by-product of their debt collection but it is what many borrowers experience.

As for sweet talking you, well maybe you've not experienced it, but it happens, even these days. I guess it depends on what potential return they see in engaging in such behaviour.

20silkcut

OttoPilot wrote: »

Who are these "big boys" who got their money back? The majority of bank bondholders (pension funds, low risk investment funds) lost money on bank bonds because they were forced to sell them very cheaply, due to the default risk. The people who made money are the speculative funds who bought them at rock bottom prices and were repaid in full, but they bought them knowing they were taking a risk they would be paid at all.

There were senior bond holders who were protected. I know that a fella called Timothy Geithner in the U.S. Somehow had the authority to step in and stop the Irish government from Burning bond holders.
The rights and wrongs of it are another matter and there is sweet damn all we can do about it.

But who ever these senior bond holders are be they governments or pension funds or Russian oligarchs they are above this moral hazard.
I'm just arguing to keep this in mind when banks get on their high horse about moral hazard. Pay back what you owe but don't listen to their bull ****! Or feel too guilty.

Sam Kade

I wonder did the pension money come through.

OttoPilot

20silkcut wrote: »

There were senior bond holders who were protected. I know that a fella called Timothy Geithner in the U.S. Somehow had the authority to step in and stop the Irish government from Burning bond holders.
The rights and wrongs of it are another matter and there is sweet damn all we can do about it.

But who ever these senior bond holders are be they governments or pension funds or Russian oligarchs they are above this moral hazard.
I'm just arguing to keep this in mind when banks get on their high horse about moral hazard. Pay back what you owe but don't listen to their bull ****! Or feel too guilty.

Taxpayers bailing out government and pension funds, how awful. Investment funds did make money but they took a risk by buying risky bonds.

And bonds at the end of the day are nowhere near as speculative as land because the holders were not exposed to higher returns, unlike farmers and developers who gambled to make larger profits.

Buford T. Justice XIX

Sam Kade wrote: »

I wonder did the pension money come through.

I don't think it will make any difference.

The sheriff (giving the rest of us a bad name:mad:) seems determined to proceed with an online sale for whatever few coppers she can hoover up. If the first bidder cannot pay, the sale proceeds to the next highest bidder.

Bullocks

Buford T. Justice V wrote: »

I don't think it will make any difference.

The sheriff (giving the rest of us a bad name:mad:) seems determined to proceed with an online sale for whatever few coppers she can hoover up. If the first bidder cannot pay, the sale proceeds to the next highest bidder.

Is that the case here ? Will the second bidder automatically be next in line

Brown Podzol

OttoPilot wrote: »

Taxpayers bailing out government and pension funds, how awful. Investment funds did make money but they took a risk by buying risky bonds.

And bonds at the end of the day are nowhere near as speculative as land because the holders were not exposed to higher returns, unlike farmers and developers who gambled to make larger profits.

Not exposed to higher returns.Fixed income securities are traded every day, the speculation is in the capital movement.

coolshannagh28

20silkcut wrote: »

There were senior bond holders who were protected. I know that a fella called Timothy Geithner in the U.S. Somehow had the authority to step in and stop the Irish government from Burning bond holders.
The rights and wrongs of it are another matter and there is sweet damn all we can do about it.

But who ever these senior bond holders are be they governments or pension funds or Russian oligarchs they are above this moral hazard.
I'm just arguing to keep this in mind when banks get on their high horse about moral hazard. Pay back what you owe but don't listen to their bull ****! Or feel too guilty.

http://www.bloomberg.com/news/articles/2016-02-08/geithner-gets-jpmorgan-credit-line-to-invest-with-warburg-pincus
Timothy Geithner gets his reward.

Water John

Lots of bank sympathisers on here Coolshannagh. Just need to look at interest charged, compared to banks borrowing cost. Were being mugged.

OttoPilot

Brown Podzol wrote: »

Not exposed to higher returns.Fixed income securities are traded every day, the speculation is in the capital movement.

I never said they weren't speculative, I just said that they weren't as much as say land, equities or commodities. If a business makes an extra ten million a year, equity value will go way up but debt value won't rise as much because interest payments are fixed and the only factor affected is chance of default which was probably small anyway.

OttoPilot

Water John wrote: »

Lots of bank sympathisers on here Coolshannagh. Just need to look at interest charged, compared to banks borrowing cost. Were being mugged.

Same with the cost of producing milk vs retail prices.