Right so, if the IMF come in does the bank guarantee still stand?
I ask this because…
Reduction in wages for public sector will no doubt lead to more repossessions.
Have heard the argument “if your in the public sector you`ll be fine”. But nobody will be unaffected.
You could have one person in the couple in the private sector one in public.
So by reducing wages in the public sector we will increase repossessions thus increasing chances of the Govt using the bank guarantee. I personally know a few people who a cut in wages would mean repossession and Im talking public servants. Now Im not arguing against wages cuts. Also one of my best friends works in Anglo. Without the guarantee he would be out of a job. Im saying the guarantee was a seriously bad move. My view would have been to let em all fail if they were going to but I could have been convinced to save one or two banks if needed but not them all.
If we ever change the bankruptcy laws I think we would be opening floodgates. It may not look like that now but in 2 years time…
To illustrate just how “immune” the public sector is from repossessions look at this paying special reference to “bad debts written off” comparing 2006 and 2007…
I don’t think “But I already spent my income for the next 30 years! You have to give it to me!” is going to go over too well as an arguement.
In the face of falling revenues everything the government does will have negative consequences. Doing nothing and borrowing the difference only works for so long and eventually leads to catastrophic problems. Increasing taxes puts further pressure on the private sector making it more difficult for them to pay their mortgages and increasing the cost of labour (this discouraging outside investment). Cutting public spending will naturally hit those not being paid anymore but then I don’t see why a job in the civil service should be a job for life.
I would very much like to see the government hire and fire like any other employer.
We have very bad times coming. We can’t do anthing about that. The single question is how can we get through this intact. The answer is to work the badness out as quickly as possible. This will not happen by putting people in prison for debt and then expecting them to pay back the full amount plus legal costs when they get out.
The banks caused this problem along with our own government. The banks must be forced to loose the money. They will if people can just post back the keys.
jaysus lads im arguing against public sector pay cuts. Nor am I arguing against changing the bankruptcy laws. Im trying to highlight how catastrophic bailing out the banks is going to be.
Letting them fail or some of them at least was our chance at purification!
This country hasnt a chance otherwise. By the end of this month billions more will be handed over to people who in my opinion thieves. Reverse Robin Hood types.
Are we going to let this happen kidding ourselves that this is what the country needs for stability? I call their bluff. Nobody else does. The anglo action thread is veryt quiet
Well, maybe. I think the question is how we can get through this with the least bad outcome for the majority of the population - we have to take a utilitarian view on this. This means there will be very bad outcomes for some, whether individuals or companies.
In terms of working the badness out as quickly as possible, I am coming to the view that we need to have a two (at least) speed solution. Given the bank guarantee, we can’t just let the banks call in all their bad debts. We are going to have to let this happen slowly. We are probably going to have to accept that some banks are allowed to limp along until the guarantee expires at great cost to the taxpayer (because the cost of letting them fail is higher). It was well high-lighted on the 'pin that this was a likely outcome of the bank guarantee. So, it seems to me, that zombie banks and a japanese-style economic growth are the likely outcomes for the bank sector for the next two years.
For individuals, we have to look at some other solution. Perhaps a write-off of arrears with a conversion of principal to long-term fixed rate debt (whatever the term might be whether 40, 50, or 60 years) is the only solution. If conditions improve for the individual, they can always refinance. I would also put the repayment of principal as an attachment to earnings, so it comes out as a top-up tax (rather like BIK tax). But I do think that we need a solution for individuals sooner rather than later, particularly as the economy is going to have to have cheaper labour costs to become competitive. It seems clear to me that the ECB will resist inflating out of trouble, therefore, if inflation does begin to pick up again and interest rates rise, we need to have individuals protected against interest rate rises on their existing properties. So, to me, low fixed rate remortgages are a solution.
For new mortgages, we have to move to a sustainable model: secured on the asset, long-term fixed rate?, lower income multiples. To complement this, rents may need to be controlled or at least be more transparent (perhaps social welfare setting public benchmarks for areas based on size of property). The reason for this is that housing is likely to become unaffordable for a larger section of the population, so they will be long-term renters. We have to have the situation where it is possible to rent the same property long-term without being surprised by large rent increases.
if the state , ie the irish people, is liable for all the bad debts of the banks there is no option but to get it over with and declare the country bankrupt. Is 30-40bn a realistic figure or being way way too pessimistic? Just have to face reality rather than years of spending cuts, a long drawn out depression, massive emigration, crippling interest repayements and finally debt default. Time to call a spade a spade and get it over with. The IMF will just make things even worse, but i am beginning to wonder if thats scientifically possible
If anything it’s on the optimistic side! IIRC there is about €120bn in loans to builders out there, and I expect catastrophic losses on these of the order of 40% - seeing as, for example, “development land” is now worth only a third of what it was in 2006, numerous surplus hotels, shopping centres and office blocks will never be used and will end up being demolished, ditto with the ghost estates etc. Call it the guts of €50bn right there.
Then there’s another €80bn or so in residential mortgages, and losses here are likely to be around the 5% mark, so that’s another €4bn
And IIRC about the same again in other loans to private individuals: credit cards, overdrafts, car loans, personal loans etc. Losses here are likely to be somewhat higher than residential mortgages, about 10% I’d say. Another €8bn.
And finally around €100bn in loans to non-builder companies. Given the impending carnage in the retail sector, I think we can expect fairly hefty losses here too. 7% or so?
And add another €60bn for the budget deficits for the next three years. So the Gombeenment needs to raise €127bn in the next few years to plug the budget deficit and pay off the bank losses. Or to put it another way, borrow 80%+ of (rapidly falling) GNP.
IMO theres no “getting it over and done with” as quickly as possible etc. I think we are now in uncharted waters and concerns people may have based on their previously held ideological stances will soon become largely irrelevant. The current situation is unprecedented and will require a response, the type of which, which has not been seen before. What it will be is anybodys guess.
Mass debt forgiveness is one option, unpalatable as it may be to many who did not take part in the excesses of the past decades and who would effectively be penalised as a result. However, if the alternative is a widespread collapse of the current social structures it may be preferable.
Its not until things begin to get really bad will people be forced to contemplate real alternatives. At the moment most are still at the stage where theyll laugh along to Ryan Tubridy’s mockery of anyone who engages in ‘doom and gloom’. It wont remain like that indefinitely.
Still absolutely sickening of course to think that the bankers have been provided with a blank cheque consisting of taxpayers money. The architects of the misery to come should at least be made to share in some of the pain. As we’ve noted before, its more likely that they will be watching it all unfold from the comfort of their faraway yachts.
If you created some form of new status for those who did not actively engage in the madness. Who led a life of responsibility a type of FREE AGENT status could be afford or granted to them. So if they wished to engage the state in a new direction they would be given priority. Its a the only way I can think of balancing out a universal debt forgiveness as you can not let those who have erred and brought disaster to these shores at the wheel. Its a bit like losing your driving license if I could use that clumsy analogy.
I understand bankruptcy should serve this purpose somewhat. However I am not sure it was deisnged for this context nor coudl it work efficiently as seem to be bankrupt entirely as a collective.
So its either everyone for themselves and a reversion force to rule or something else…
So ye who be with least debt-sin can have a go for a while. Everyone simply has to agree to go along with it dat’s the snag
What else are you going to do with them, leave them blighting the countryside, slowly falling into disrepair and becoming magnets for vermin of all kinds, human and otherwise?
Nobody is going to buy them, for the simple reason that nobody needs them. There are tens of thousands of units built that we Just. Don’t. Need. You just have to come to terms with that fact. Granted, loads of them are in the likes of Leitrim and Longford, but still, the only value they have is any residual scrap/recycle value of the pipes, wiring, wood and tiles.
Likewise with the shopping centres and hotels and office blocks that will never actually open or be used. You want to leave them lying about, decaying and full of squatters, winos, junkies and knackers?
I have to admit I find it truly fascinating that out of a post detailing the €120 billion hole in the national finances, the one point you choose to quibble over is whether or not surplus units might be knocked down!
Miles from anywhere important
Miles from work
Full estates empty or incomplete.
Now how does one flog em? i wouldnt buy 1 house in an estate on my own, no fucking way.
I would’nt buy a house in the arse end of nowhere, when good stock is available closer to the City (Midleton), i was actually thinking to myself this week, that even if it was for free, i wouldnt live there, it has NOTHING going for it.
You will not get Council tenenents in there, they don’t like to move fr from the gene pool and the access to ammenities without personl transport is fuck all.
So, who does buy a house there?
I av’nt figured out a resonable answer except that demolition is a real threat.
Just to clarify that i am asking about ghost estates in the middle of nowhere , ie leitrim/longford etc - no offence to leitrimites etc
leave them as they are. it cost no money to leave them as they are.
people here seem to think they are in the middle of nowhere. therefore no blighting occurs.
houses in the middle of nowhere that no one wants to live in falling into disrepair? surely the greatest crisis of all time
i am aware we dont need them. that is not in question. the question is WHY should they be demolished.
so you are saying the only reason they should be demolished is to get recycleable material out of them?
how many junkies do you think are going to hitch/take a bus/ walk to leitrim to squat in a 3 bed semi?
even if they do decide to partake in such an adventure - isnt that a good thing? ie they will be away from civilisation.
you and SW seem to be under the misaprehension that 2gaffs thinks these houses are sellable.
2gaffs would like to clarify that this is not the case.
2gaffs agrees that most of these house will not be sold and/or lived in.
2gaffs would like an answer to his question ie - “whats the point of demolishing these ghost estates”
IIRC, the council has to maintain these estates as part of the local charter or regulations, so it may be demolition is the answer, and i’d suggest most of em are shells only (anecdotal) at least, most of the ones i have looked at are.
Unoccupied houses quickly begin to rot and decay (ever seen a local shop or cinema one year from closing? the change is alarming) and they will become unsafe very quickly.
what about fire/arson?)
What happens to the poor fucker who actually lives in an estate on his own? i’m sure there is a picture of such on ghostestates.com
but, if not domolition, then what? a permenant monument to stupidity and greed?