The Great Irish Sell Off Monday 9.30pm

listermint

Barely Hedged wrote: »

Hindsight is a great thing.

If only the government could have tendered for hindsight in 2011 and used this bought hindsight to subsequently convince the markets to lower the yields we were paying on rolling our national debt. All this while holding onto all the banks assets that would appreciate again and sell at the top of the market.

Idiots indeed or idiotic for believing this is a plausible outcome?

Hindsight as in looking at the many recessions over the last 100 years each with recovery. To not plan for recovery was to shoot oneself in the foot so no I don't think they should get off lightly. The housing and commercial stock were assets but were treated as dead wood when all previous recessions demonstrate that they were not dead wood. Recovery was bound to occur and was already in the midst of starting when this all went down. Not planning for this recovery with effective taxes against these property portfolio investments was not only poor but downright incompetence.

Wanderer78

homerjay2005 wrote:

a greater commuter transport network would mean less need for people to have to live in Dublin.

You certainly have sound logic and I would agree, our transport and housing needs are intrinsically linked and must be approached in tandem, no easy task though.

Mod: do you know of another thread discussing this exact subject matter, couldn't find one? This is a heavily politicised subject matter and is very complex. I'd say your heads will be wrecked keeping this one in check. Thank you

beauf

I posted it mainly as the show highlighted these funds attitude to renting and renters. They were very honest that the aim is maximize rents, pay as little tax as possible, that they are a business to make money and not provide social housing. There's been a lot of comment how these big companies would be good for the rental market. I think the show made it crystal clear what their impact will be for renters. Their aim was to keep growing in Ireland, as its obviously the time to make a killing in the market.

Michael D Not Higgins

Wanderer78 wrote: »

You certainly have sound logic and I would agree, our transport and housing needs are intrinsically linked and must be approached in tandem, no easy task though.

Mod: do you know of another thread discussing this exact subject matter, couldn't find one? This is a heavily politicised subject matter and is very complex. I'd say your heads will be wrecked keeping this one in check. Thank you

Transport has nothing to do with this programme or the topic of the forum. Go to the commuting and transport forum to discuss the M50 and commute times to the city.

Barely Hedged

listermint wrote: »

Hindsight as in looking at the many recessions over the last 100 years each with recovery. To not plan for recovery was to shoot oneself in the foot so no I don't think they should get off lightly. The housing and commercial stock were assets but were treated as dead wood when all previous recessions demonstrate that they were not dead wood. Recovery was bound to occur and was already in the midst of starting when this all went down. Not planning for this recovery with effective taxes against these property portfolio investments was not only poor but downright incompetence.

So you knew exactly in 2011 how long the recovery would take? It's all well and good saying that everything is cyclical but how long does the cycle last and can you remain liquid to ride out the cycle. The facts of the matter were in 2010 and 2011 that the government was not in a position to remain liquid for very long and they were getting creased on debt repayment rollovers. Do you know how much this would have cost the state?

The government selling to the funds was on the basis of keeping the state liquid, reducing our debt to GDP ratio and bringing down the yield on Irish government debt. It was simply not possible to trundle along in the hope we'd ride out the cycle - there's too much at stake. These funds provided a life line to Ireland for all of the above when we were in dire straits. We did our best by setting up NAMA to realise some value out of the cycle.

Your posts lack all the context of the time when these decisions were made

hytrogen

Wanderer78 wrote:

Banks 'sell' debt, period! Many well respected and well researched people would agree with my synopsis of banks. Many of these institutions are not truly helping society as a whole, they are exactly as I described them. Again I would agree with Chomsky, largely due to the marketing industry, people make uninformed, irrational decisions regarding purchasing including the purchasing of property

And marketing has a regulator too you know? Called the Advertising Standards Authority. The problem here is the previous generations got too greedy when they smelt "free money" coming from Europe, cheap credit and gambled to the highest repayments level without conscience or thought for anyone else including their future generations or society's outcome and when the cows came home they cried woe is me!

Barely Hedged

Wanderer78 wrote: »

Banks 'sell' debt, period! Many well respected and well researched people would agree with my synopsis of banks. Many of these institutions are not truly helping society as a whole, they are exactly as I described them. Again I would agree with Chomsky, largely due to the marketing industry, people make uninformed, irrational decisions regarding purchasing including the purchasing of property

Sell debt I.e. enable people to borrow doesn't help society. Interesting opinion

Wanderer78

hytrogen wrote:

And marketing has a regulator too you know? Called the Advertising Standards Authority. The problem here is the previous generations got too greedy when they smelt "free money" coming from Europe, cheap credit and gambled to the highest repayments level without conscience or thought for anyone else including their future generations or society's outcome and when the cows came home they cried woe is me!

'Light touch regulation', Bill black really should have been involved in this documentary! I still stand by Chomsky's uninformed, irrational decisions quote!

Barely Hedged wrote:

Sell debt I.e. enable people to borrow doesn't help society. Interesting opinion

The operation of many of these institutions is not just about profiteering but it's actually about power and control, it's a very powerful method of increasing 'worker insecurity', as explained very well by people such as Chomsky. It works extremely effectively

Barely Hedged

Wanderer78 wrote: »

'Light touch regulation', Bill black really should have been involved in this documentary! I still stand by Chomsky's uninformed, irrational decisions quote!



The operation of many of these institutions is not just about profiteering but it's actually about power and control, it's a very powerful method of increasing 'worker insecurity', as explained very well by people such as Chomsky. It works extremely effectively

Can you give examples of where the funds and banks operating in Ireland have exerted power and control to increase worker insecurity.

Can you in fact define worker insecurity?

Wanderer78

Barely Hedged wrote: »

Can you give examples of where the funds and banks operating in Ireland have exerted power and control to increase worker insecurity.

Can you in fact define worker insecurity?

apologies, i thought it was self evident, but i think the documentary done a pretty good job of showing worker insecurity. this is actually quiet a difficult subject matter to explain and id do a bad job of trying to but noam chomsky does a fantastic job of explaining it.

give me some time in trying come up with some sort of explanation though. thank you

listermint

Barely Hedged wrote: »

So you knew exactly in 2011 how long the recovery would take? It's all well and good saying that everything is cyclical but how long does the cycle last and can you remain liquid to ride out the cycle. The facts of the matter were in 2010 and 2011 that the government was not in a position to remain liquid for very long and they were getting creased on debt repayment rollovers. Do you know how much this would have cost the state?

The government selling to the funds was on the basis of keeping the state liquid, reducing our debt to GDP ratio and bringing down the yield on Irish government debt. It was simply not possible to trundle along in the hope we'd ride out the cycle - there's too much at stake. These funds provided a life line to Ireland for all of the above when we were in dire straits. We did our best by setting up NAMA to realise some value out of the cycle.

Your posts lack all the context of the time when these decisions were made

It does not. The loopholes in the tax laws were known for over 18 months and were not touched.

Explain to me how not planning for an upturn in the assets by disallowing the tax payer to collect any return is sound, on any level?

Please

Michael D Not Higgins

Wanderer78 wrote: »

give me some time in trying come up with some sort of explanation though. thank you

Only insofar as it relates to property.

Barely Hedged

listermint wrote: »

It does not. The loopholes in the tax laws were known for over 18 months and were not touched.

Explain to me how not planning for an upturn in the assets by disallowing the tax payer to collect any return is sound, on any level?

Please

Did you ever consider that they were allowed run for 18 months for a good reason?

What if the buyers stipulated that the government was responsible for compensating them for any drop in the value of the underlying assets in return for accepting what you have suggested. The funds could have let the asset go to ruin and then picked up compensation from the government. What would you think of the government then?

All you're posts are arguing from no perspective or context. You need to ask yourself why did they do what they do and what were the alternatives to understand why they made the decisions.

Wanderer78

Michael D Not Higgins wrote: »

Only insofar as it relates to property.

thank you, i understand where you're coming from but this is a very complex subject matter that involves many different areas in particular finance and banking but is all related both directly and indirectly to property. to be honest, im not sure i truly can explain it anyway

riclad

Bring in a law in the next budget any company based in the eu,or the us,
must pay at least 20 per cent tax on rental income regardless of what loans they have or what interest they pay.
Its not fair as irish landlords mosty pay 40 per cent tax on rental income,
depending on how much interest they pay on the mortgage.
I think the problem is nama sells 1000 plus houses at a discount,
so they end up being bought by american investors.
Nama does not want 1 or 2 houses to irish landlords.
They want to sell a block containg 200 apartments to one company.
Nama offered 100s of houses to local authoritys and they were refused ,
i think because the councils dont want to buy large estates ,
they,ll buy 4 houses on one estate.

beauf

Barely Hedged wrote: »

Did you ever consider that they were allowed run for 18 months for a good reason?

What if the buyers stipulated that the government was responsible for compensating them for any drop in the value of the underlying assets in return for accepting what you have suggested. The funds could have let the asset go to ruin and then picked up compensation from the government. What would you think of the government then?

All you're posts are arguing from no perspective or context. You need to ask yourself why did they do what they do and what were the alternatives to understand why they made the decisions.

You seem to be arguing that while bad, it could have been even worse. I'm not sure thats really valid point here.

IMO The Govt wanted Nama to get in and out fast. So rather than maximizing the return, they sold as much as they could to whoever could buy the most property and/or debt in one go.

Which is why the smaller businesses or individuals couldn't buy the own property back at any price. The banks/Nama wouldn't deal with them.

Which would be fine except for the housing crisis.

impr0v

listermint wrote: »

It does not. The loopholes in the tax laws were known for over 18 months and were not touched.

Explain to me how not planning for an upturn in the assets by disallowing the tax payer to collect any return is sound, on any level?

Please

I am no expert on tax law, and this not the forum for it.

However, Eoghan Murphy stated at one point during the follow-up discussion on Claire Byrne live that the 'loophole' was deliberately written into the legislation: if funds held on to the assets for five years or more post-purchase they would avoid tax (capital gains?).

This was presumably designed to attract the purchases in the first place, and to avoid destabilising the housing market further with repeated quick flips of the underlying properties with each percentage point rise in house/apartment values.

Perhaps there was also a desire to foster a greater presence of professional/institutional landlords in the letting market - I don't know.

In any event, the key point is that, judging by what Murphy said, it wasn't a loophole in the traditional sense of that word.

beauf

riclad wrote: »

...Nama offered 100s of houses to local authoritys and they were refused ,
i think because the councils dont want to buy large estates ,
they,ll buy 4 houses on one estate.

Seems that Local Authority got out of housing. preferring to outsource social housing (and affordable housing) though third parties, (LLs).

Wheeliebin30

impr0v wrote: »

I am no expert on tax law, and this not the forum for it.

However, Eoghan Murphy stated at one point during the follow-up discussion on Claire Byrne live that the 'loophole' was deliberately written into the legislation: if funds held on to the assets for five years or more post-purchase they would avoid tax (capital gains?).

This was presumably designed to attract the purchases in the first place, and to avoid destabilising the housing market further with repeated quick flips of the underlying properties with each percentage point rise in house/apartment values.

Perhaps there was also a desire to foster a greater presence of professional/institutional landlords in the letting market - I don't know.

In any event, the key point is that, judging by what Murphy said, it wasn't a loophole in the traditional sense of that word.

Stephen Donnelly just said on East coast that the tax law was written in 1997.

Once Micheal Noonan was made aware of this 6 months ago he closed the loophole.

emo72

Talking with a friend of mine today who is a developer and he told me why we are in a mess. Developers can't get money to build stuff, and buyers can't get mortgages to buy stuff. That's it. Game over.

murphaph

beauf wrote: »

I think there's a bigger issue here. They had a fire sale to vulture funds. When they could have sold to owners here at a greater profit. People were waiting to buy and Nama said it wasn't going to do a fire sale so as not to collapse the market. What they actually was did was fire sale the property out from under Irish owners.

I suppose you can look at it this way too: The government sells housing to foreign funds. They are capitalised externally, with little to no Irish banking sector involvement so no risk that this debt will some day come back to bite the taxpayer in the arse again. If they sell it all to Mary and Joe, it will be financed largely through Irish banks. The risk of this debt coming back to bite the taxpayer is significantly higher as we seem averse to making the defaulting on a mortgage a reason to lose your home!

emo72

emo72 wrote: »

Talking with a friend of mine today who is a developer and he told me why we are in a mess. Developers can't get money to build stuff, and buyers can't get mortgages to buy stuff. That's it. Game over.

Completely different game though, developers built loads of houses in the expectation that people would move to the far flung "commuter fringes" and spend half their working days travelling to and from work and pay premium prices for them. Today's developers already have the high priced land near Dublin, and won't build and sell for less than "they're worth!", which is above what the average house buyer can afford.
The lenders are wary of lending to build overpriced houses that may not sell and left holding the baby after the next recession.

We do not have a steady state economy, it's either growth or recession and we're due a flip over back to recession soon.

Barely Hedged

beauf wrote: »

You seem to be arguing that while bad, it could have been even worse. I'm not sure thats really valid point here.

IMO The Govt wanted Nama to get in and out fast. So rather than maximizing the return, they sold as much as they could to whoever could buy the most property and/or debt in one go.

Which is why the smaller businesses or individuals couldn't buy the own property back at any price. The banks/Nama wouldn't deal with them.

Which would be fine except for the housing crisis.

The government trying to avoid a bad situation getting a lot worse is not a valid assertion of the context in which decisions were made in 2010 and 2011 is not a valid point. Where were you for those years if you don't think that?

Could you imagine the situation of breaking up and individually selling massively complex portfolios, some performing and a lot non performing, that are all based around archaic land registry law? It would be an absolute circus and it is not how any large organisation approaches any portfolio offload

murphaph

murphaph wrote: »

I suppose you can look at it this way too: The government sells housing to foreign funds. They are capitalised externally, with little to no Irish banking sector involvement so no risk that this debt will some day come back to bite the taxpayer in the arse again. If they sell it all to Mary and Joe, it will be financed largely through Irish banks. The risk of this debt coming back to bite the taxpayer is significantly higher as we seem averse to making the defaulting on a mortgage a reason to lose your home!

At those firesale prices, few would default on such a small mortgage repayment ann if the occupiers were social welfare claimants the payments could be taken at source.

No real risk to the banks.

hytrogen

beauf wrote:

Seems that Local Authority got out of housing. preferring to outsource social housing (and affordable housing) though third parties, (LLs).

They definitely do have a lot to answer for in terms of building public housing, firstly let's get away from calling it social housing because that has such a negative stigma about social welfare, abuse etc. It's public housing owned by a public authority.
Secondly it should be for anyone to rent not just people or families on social welfare benefits. The sooner we get away from this the faster we'll get to a more ordered society.
You are completely right they haven't erected a planning permission sign in decades and when they do it's for low density housing, waste of space again, because of the stigma and ghettoisation they induced in the 70's & 80's (e.g. the ballymun towers) so they've been skating on thin ice since, meanwhile they now rake in millions annually through LPT and can't decide how to spend it appropriately..

Barely Hedged

[Deleted User] wrote: »

At those firesale prices, few would default on such a small mortgage repayment ann if the occupiers were social welfare claimants the payments could be taken at source.

No real risk to the banks.

What fire sale prices? Examples given can be cherry picked and selective at best...

listermint

Barely Hedged wrote: »

What fire sale prices? Examples given can be cherry picked and selective at best...

Well it has been argued anew that selling the foreign assets was both at the time and after one of the more ridiculous things to do specifically when there was buyers falling over themselves to go after them the UK assets where practically torn from Nama's hands. I dont technically agree that its mandate was sound from the get go.

But you are still arguing that it was appropriate for government at the time not to account for an upturn or recovery when they were dealing with these matters. As has been stated these loopholes existed since the late 90's its clear that the firesale of getting rid of assets was as short sighted as having to put your fact to the monitor to read the text.

They should have put in methods for dealing with recovery and recouping some losses via taxation. You cannot argue that it should not have been done. Im sorry.

groovyg

I was confused about the widower down in Cork, he put up the house as collateral for his business which then went bust as a result of the recession. I wondered when his wife died would the life assurance not have covered the mortgage? or did they not have life assurance?

Barely Hedged

listermint wrote: »

Well it has been argued anew that selling the foreign assets was both at the time and after one of the more ridiculous things to do specifically when there was buyers falling over themselves to go after them the UK assets where practically torn from Nama's hands. I dont technically agree that its mandate was sound from the get go.

But you are still arguing that it was appropriate for government at the time not to account for an upturn or recovery when they were dealing with these matters. As has been stated these loopholes existed since the late 90's its clear that the firesale of getting rid of assets was as short sighted as having to put your fact to the monitor to read the text.

They should have put in methods for dealing with recovery and recouping some losses via taxation. You cannot argue that it should not have been done. Im sorry.

Why do you think global accountancy firms make large amounts of money on tax advisory services? Their job is to pore over tax law to exploit loopholes. More often than not, the revenue commissioners only see this when tax receipts or returns are submitted. See the inheritance of property as another recent example. It is a reasonable expectation, in any country, that these types of issues will always arise. The accountancy firms wouldn't be in business otherwise...

What losses has NAMA suffered in the UK? Are you talking about them offloading them at par and now the assets are worth more? Sounds like more hindsight to me.

Again, you don't fully understand the transfer and sale of distressed assets and the constraints the government were working under. Unless you consider the context you'll never get your head around it

listermint

Barely Hedged wrote: »

Why do you think global accountancy firms make large amounts of money on tax advisory services? Their job is to pore over tax law to exploit loopholes. More often than not, the revenue commissioners only see this when tax receipts or returns are submitted. See the inheritance of property as another recent example. It is a reasonable expectation, in any country, that these types of issues will always arise. The accountancy firms wouldn't be in business otherwise...

What losses has NAMA suffered in the UK? Are you talking about them offloading them at par and now the assets are worth more? Sounds like more hindsight to me.

Again, you don't fully understand the transfer and sale of distressed assets and the constraints the government were working under. Unless you consider the context you'll never get your head around it

Enough of the smug talk, i fully understand the sale of distressed assets. It appears folks may be too close to the coal face for criticism.

One thing that should be learned from this there should always be redundancy, and hindsight is not or never an excuse. Its a term used by those who failed to prepare and plan.

You know what they say about that,

im sure.