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Morgan Kelly - Pump a few billion into the middle class coffers?

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    #62
    wild_cat
    Closed Accounts Posts: 1,291 ✭✭✭wild_cat


    DeVore wrote: »
    ps: google ACC Bank in the late 80's.

    "All this has happened before and will happen again."

    DeV.

    My mother never stops ranting about that.

    Especially when interest rates went up to 18%....

    They still managed to pay off the mortgage on 200 acre farm though with out selling a site.


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    #63
    skregs
    Registered Users Posts: 746 ✭✭✭skregs


    Ok so, lets say you got a mortgage in 2007. You could obviously make the repayments on the house at the time.

    Why not freeze interest rate hikes instead and spend those billions on job creation, allowing people to continue paying off their debts?


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    #64
    Knasher
    Registered Users Posts: 2,370 ✭✭✭Knasher


    skregs wrote: »
    Why not freeze interest rate hikes instead and spend those billions on job creation, allowing people to continue paying off their debts?
    Freezing the interest rate costs money, it doesn't generate it.


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    #65
    [Deleted User]
    Posts: 0 ✭ [Deleted User]


    DeVore wrote: »
    Its more like telling people you will chop down dead trees for free but if their tree is living they have to pay a maintenance upkeep.


    DeV.
    It's like an insurance, if you don't cut down the dead tree it might fall on your car!
    But you must trim the healthy ones at the same time to avoid discontent.

    Any form of debt forgiveness must include all debt, not just the toxic stuff.
    or none at all.

    As a mortgage payer as well, I'd be mighty pissed if only those who are in difficulties are forgiven.


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    #66
    skregs
    Registered Users Posts: 746 ✭✭✭skregs


    Knasher wrote: »
    Freezing the interest rate costs money, it doesn't generate it.

    If the government has a controlling stake in the bank though, can they not pass the losses onto the bank? Or is that far too idealistic?


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    #67
    Knasher
    Registered Users Posts: 2,370 ✭✭✭Knasher


    skregs wrote: »
    If the government has a controlling stake in the bank though, can they not pass the losses onto the bank? Or is that far too idealistic?

    I don't think they even need a controlling stake, the central bank can control interest rates.

    The problem is due to the fact our banks are extremely insolvent so they can't absorb the losses. And due to the large amount of money the government has invested into the banks, if the banks go down it will lead to a default.


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    #68
    knotknowbody
    Registered Users Posts: 262 ✭✭knotknowbody


    Rabidlamb wrote: »
    Right, soon as this starts getting political momentum I'm going to stop paying my mortgage for 90 days & go interest only then for the next 6 months.

    Bank comes in & writes off 25% of my mortgage
    I bring the €50 notes back out from under the mattress
    ?????????????
    Profit

    I know people who took their mortgage off DD, went to interest only and started missing payments every second or third month over a year ago, in the expectation that debt forgiveness would come about. I am personally opposed to it as I believe if you take out a mortgage you should pay it back as a matter of principle, but I can see the arguments for it, and if it results in more spending power in the economy then I would accept it, but with strict conditions to prevent people like those I mentioned above gaining from it when the can easily afford to repay their loan and still live comfortably.


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    #69
    shaunsweb
    Closed Accounts Posts: 57 ✭✭shaunsweb


    Hi all,
    Like yourselves, I read with interest the article in relation to Mortgage Forgiveness for those in Distress. The idea is not a new one (look at what has been going on with the Banks, and the Developers who have had their debts passed to Nama and who in turn have given some debt forgiveness to them). Where I am uncomfortable is the idea that those who are in distress can have one or 2 options openen to them (at expense of taxpayer):
    1. Let them walk away
    2. Forgive them a portion of their debt
    Well what about those who by hook or by crook (and who have had to do without), are servicing their mortages and keeping up with their payments? It's difficult and with news of household charges, water levies and septic charges, it's going to make them "feel more than their fair share of the pain". This is not fair on them!

    A possible solution that I see might be the following:
    Everyone who has a mortgage, gets their mortgage renegotiated (based on the current value of their property (and a repayment schedule based on that amount is determined)). That way everyone benefits, money is released to help pay the Government levies, and perhaps a few more coffers will make it into the local economy.

    What's your thoughts?

    Thanks for reading. S


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    #70
    iPlop
    Closed Accounts Posts: 2,822 ✭✭✭iPlop


    shaunsweb wrote: »
    Hi all,
    Like yourselves, I read with interest the article in relation to Mortgage Forgiveness for those in Distress. The idea is not a new one (look at what has been going on with the Banks, and the Developers who have had their debts passed to Nama and who in turn have given some debt forgiveness to them). Where I am uncomfortable is the idea that those who are in distress can have one or 2 options openen to them (at expense of taxpayer):
    1. Let them walk away
    2. Forgive them a portion of their debt
    Well what about those who by hook or by crook (and who have had to do without), are servicing their mortages and keeping up with their payments? It's difficult and with news of household charges, water levies and septic charges, it's going to make them "feel more than their fair share of the pain". This is not fair on them!

    A possible solution that I see might be the following:
    Everyone who has a mortgage, gets their mortgage renegotiated (based on the current value of their property (and a repayment schedule based on that amount is determined)). That way everyone benefits, money is released to help pay the Government levies, and perhaps a few more coffers will make it into the local economy.

    What's your thoughts?

    Thanks for reading. S


    You're forgetting this thread is full of posters who couldn't get on the property ladder, so they want to see families homeless and on the streets.

    It's the only solution, that's why threads like this are started, so people can decide the best way to make people homeless.


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    #71
    Sofa King Great
    Registered Users Posts: 869 ✭✭✭Sofa King Great


    Sink The Banana wrote: »


    You're forgetting this thread is full of posters who couldn't get on the property ladder, so they want to see families homeless and on the streets.

    It's the only solution, that's why threads like this are started, so people can decide the best way to make people homeless.
    eh couldnt get on the property ladder? Clearly the people who can't pay now couldn't either bit they still did.

    It's not about making people homeless, it's about rewarding people for poor money management to the detriment of responsible borrowers who continue to pay and those who didn't Borrow more than they could afford in the first place.


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    #72
    iPlop
    Closed Accounts Posts: 2,822 ✭✭✭iPlop


    Sofa King Great wrote: »
    eh couldnt get on the property ladder? Clearly the people who can't pay now couldn't either bit they still did.

    It's not about making people homeless, it's about rewarding people for poor money management to the detriment of responsible borrowers who continue to pay and those who didn't Borrow more than they could afford in the first place.

    Not at all, people could afford it back then, they can't now because they're unemployed, which is the real issue.

    If there was plenty of work out there then yes no help, but there isn't.Luckily I didn't buy in the boom and I don't fall into this category.

    All the people I know that bought in the boom were frightened they would never be able to afford a family home and they were very well paid, so the argument that they couldn't afford it is BS, they can't afford it now because............wait for it............THEY'RE UNEMPLOYED!!!!!!!


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    #73
    Sofa King Great
    Registered Users Posts: 869 ✭✭✭Sofa King Great


    Sink The Banana wrote: »
    Sofa King Great wrote: »
    eh couldnt get on the property ladder? Clearly the people who can't pay now couldn't either bit they still did.

    It's not about making people homeless, it's about rewarding people for poor money management to the detriment of responsible borrowers who continue to pay and those who didn't Borrow more than they could afford in the first place.

    Not at all, people could afford it back then, they can't now because they're unemployed, which is the real issue.

    If there was plenty of work out there then yes no help, but there isn't.Luckily I didn't buy in the boom and I don't fall into this category.

    All the people I know that bought in the boom were frightened they would never be able to afford a family home and they were very well paid, so the argument that they couldn't afford it is BS, they can't afford it now because............wait for it............THEY'RE UNEMPLOYED!!!!!!!
    When entering into a facility to be repaid over 30 years it is prudent to factor in a period of unemployment.

    Why should I pay for that? You can be damn sure that if they made money on the sale of the house they wouldn't give it to me.


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    #74
    iPlop
    Closed Accounts Posts: 2,822 ✭✭✭iPlop


    Sofa King Great wrote: »
    When entering into a facility to be repaid over 30 years it is prudent to factor in a period of unemployment.



    Yes of course it is and don't forget we all saw this recession coming didn't we?

    That's why people took out these loans, so the house they bought would be worth nothing, and they would be saddled with this debt.


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    #75
    Sofa King Great
    Registered Users Posts: 869 ✭✭✭Sofa King Great


    Sink The Banana wrote: »
    Sofa King Great wrote: »
    When entering into a facility to be repaid over 30 years it is prudent to factor in a period of unemployment.



    Yes of course it is and don't forget we all saw this recession coming didn't we?

    That's why people took out these loans, so the house they bought would be worth nothing, and they would be saddled with this debt.
    As harsh as this may sound, a commercial agreement entered into between two willing parties in the last 10 years is not my problem and I don't see why I should have to pay for it.


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    #76
    prinz
    Registered Users Posts: 14,598 ✭✭✭✭prinz


    gosuckonalemon wrote: »
    Morgan Kelly is a highly respected Economist. He predicted years ago that our economy was unsustainable and a recession/property collapse was inevitable. I think I'll take his word on this one.

    He was also one of the highly respected lecturers who trained up many of the economists who went on to work at the major banks and went ahead with the 100% mortgages etc. Anyone with half a brain was predicting years ago that property collapse was inevitable..


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    #77
    Monty Burnz
    Closed Accounts Posts: 12,455 ✭✭✭✭Monty Burnz


    cosmicfart wrote: »
    in other words ALL persons who bought property at the height of the boom should have some sort of a reduction. otherwise it wont be fair and the people who still have jobs wont be able to start begrudging others who have lost theirs and now simply dont have money.

    You know that the Irish taxpayers own the banks, right?
    And you know that this plan would involve many billions more in losses for the banks, right?
    And you know whose pockets these losses will come out of in increased taxation, cuts in services, and increasing national debt, right?

    It's pretty obvious, but I thought I'd better check that we are on the same page and all.


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    #78
    Frank Black
    Closed Accounts Posts: 4,296 ✭✭✭Frank Black


    Sofa King Great wrote: »
    As harsh as this may sound, a commercial agreement entered into between two willing parties in the last 10 years is not my problem and I don't see why I should have to pay for it.


    You already are - ever since the bank guarantee.


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    #79
    Monty Burnz
    Closed Accounts Posts: 12,455 ✭✭✭✭Monty Burnz


    gosuckonalemon wrote: »
    Morgan Kelly is a highly respected Economist. He predicted years ago that our economy was unsustainable and a recession/property collapse was inevitable. I think I'll take his word on this one.
    I find it more than a little amusing that many of the same people who were spitting venom at Kelly when he pointed out the obvious bubble a few years back are now hailing him as the greatest thing since sliced bread when he suggests giving the bubble mortgage goons a free pass with other people's money.


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    #80
    Monty Burnz
    Closed Accounts Posts: 12,455 ✭✭✭✭Monty Burnz


    black francis wrote: »
    You already are - ever since the bank guarantee.
    So he got financially raped by Fianna Failure, and now he should bend over again?

    I don't understand that logic. Fool me once - shame on you, etc.


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    #81
    iPlop
    Closed Accounts Posts: 2,822 ✭✭✭iPlop


    Sofa King Great wrote: »
    As harsh as this may sound, a commercial agreement entered into between two willing parties in the last 10 years is not my problem and I don't see why I should have to pay for it.


    I agree with you, but it's not going to solve the problem and it's that problem that's depressing the economy more than it should be.Debt forgiveness is not a new idea, it's been used around the world for decades to get economies going again.

    And while we're at it, why should you be paying the USC for people that are on the dole, people scamming the system, Junkies on disability benefit, senior bond holders that took huge risks and now want their money back and are getting it back.

    The real issue is job creation, people are so hung up on debt forgiveness that the attention is focused on that rather than the government and job creation.

    If the jobs were there we wouldn't need debt forgiveness now would we?


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    #82
    Sofa King Great
    Registered Users Posts: 869 ✭✭✭Sofa King Great


    black francis wrote: »
    Sofa King Great wrote: »
    As harsh as this may sound, a commercial agreement entered into between two willing parties in the last 10 years is not my problem and I don't see why I should have to pay for it.


    You already are - ever since the bank guarantee.
    Guaranteeing bank deposits and writing off mortgages are also two very different things. One just has to look at that budgeting place that went bust a few weeks ago to see what the impact of allowing the banks to fail would have been


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    #83
    Sofa King Great
    Registered Users Posts: 869 ✭✭✭Sofa King Great


    Sink The Banana wrote: »
    Sofa King Great wrote: »
    As harsh as this may sound, a commercial agreement entered into between two willing parties in the last 10 years is not my problem and I don't see why I should have to pay for it.


    I agree with you, but it's not going to solve the problem and it's that problem that's depressing the economy more than it should be.Debt forgiveness is not a new idea, it's been used around the world for decades to get economies going again.

    And while we're at it, why should you be paying the USC for people that are on the dole, people scamming the system, Junkies on disability benefit, senior bond holders that took huge risks and now want their money back and are getting it back.

    The real issue is job creation, people are so hung up on debt forgiveness that the attention is focused on that rather than the government and job creation.

    If the jobs were there we wouldn't need debt forgiveness now would we?
    Debt forgiveness would reward the financially foolish. This would not aid job creation or free up money.


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    #84
    Monty Burnz
    Closed Accounts Posts: 12,455 ✭✭✭✭Monty Burnz


    grumpymunster wrote: »
    So far as I am aware the plan is to look at those in trouble with their residence not investment or holiday property. People have very short merories when you have a leader of a country advocating at a conference that those who talk down the country should commit suicide and that there is no risk in buying property, then the ordinary people can be forgiven to my mind.
    Call me a cynic, but I don't swallow every bucket of shyte the government produces for their own political ends, and I certainly never swallowed anything that corrupt conman Ahern ever said. All the information that you needed to see the bubble was there in the public domain - people who ignored it, chose not to believe it, or never even asked the questions are victims of their own actions, however much they try to wriggle out of their personal responsibility.
    grumpymunster wrote: »
    And Bertie was not the only one advocating this banks generally encouraged people to buy houses this year in case they cant afford them next year.
    It must be great to look back with such rosy glasses.
    Only a moron would take advice from a salesman about whether or not to buy the salesman's product. Banks sell loans. That's all you ever need to know about taking advice from banks. :rolleyes:


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    #85
    iPlop
    Closed Accounts Posts: 2,822 ✭✭✭iPlop


    Sofa King Great wrote: »
    Debt forgiveness would reward the financially foolish. This would not aid job creation or free up money.

    But Job creation is the problem no? If people were working this would not even be on the table.


    And financially foolish is totally wrong, It wasn't foolish when it was the boom and everyone was working and were able to pay their debts, it's foolish now because were in a deep recession and we need to blame people rather than builders, banks that have been forgiven for their mistakes.


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    #86
    Frank Black
    Closed Accounts Posts: 4,296 ✭✭✭Frank Black


    Sofa King Great wrote: »
    Guaranteeing bank deposits and writing off mortgages are also two very different things. One just has to look at that budgeting place that went bust a few weeks ago to see what the impact of allowing the banks to fail would have been

    Not saying that debt forgiveness is right. Meerly pointing out that is it already happening and that we (the taxpayers) are already paying for it.

    While the bank gaurantee may have initially been planned to gaurantee bank deposits, the effect of it has been that the state has taken on all the bank loans - many of these loans are un-recoverable and have already been 'forgiven' through Nama. You mention that a commercial agreement between 2 parties is none of your business - the sad fact is that since September 2009 it has become so.


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    #87
    Sofa King Great
    Registered Users Posts: 869 ✭✭✭Sofa King Great


    Sink The Banana wrote: »
    Sofa King Great wrote: »
    Debt forgiveness would reward the financially foolish. This would not aid job creation or free up money.

    But Job creation is the problem no? If people were working this would not even be on the table.


    And financially foolish is totally wrong, It wasn't foolish when it was the boom and everyone was working and were able to pay their debts, it's foolish now because were in a deep recession and we need to blame people rather than builders, banks that have been forgiven for their mistakes.
    Are you suggesting that writing off people's mortgages will aid job creation?

    Surely the 5 bn would be far better invested in infrastructural projects, retraining, IDA grants, tax breaks?


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    #88
    Sofa King Great
    Registered Users Posts: 869 ✭✭✭Sofa King Great


    black francis wrote: »
    Sofa King Great wrote: »
    Guaranteeing bank deposits and writing off mortgages are also two very different things. One just has to look at that budgeting place that went bust a few weeks ago to see what the impact of allowing the banks to fail would have been

    Not saying that debt forgiveness is right. Meerly pointing out that is it already happening and that we (the taxpayers) are already paying for it.

    While the bank gaurantee may have initially been planned to gaurantee bank deposits, the effect of it has been that the state has taken on all the bank loans - many of these loans are un-recoverable and have already been 'forgiven' through Nama. You mention that a commercial agreement between 2 parties is none of your business - the sad fact is that since September 2009 it has become so.
    I know we are both agreeing here but can you provide any examples of debt forgiveness by NAMA?


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    #89
    iPlop
    Closed Accounts Posts: 2,822 ✭✭✭iPlop


    Sofa King Great wrote: »
    Are you suggesting that writing off people's mortgages will aid job creation?

    Surely the 5 bn would be far better invested in infrastructural projects, retraining, IDA grants, tax breaks?

    If people had jobs we wouldn't be talking about writing off mortgages would we?

    And the circle is complete ,round and round we go.


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    #90
    prinz
    Registered Users Posts: 14,598 ✭✭✭✭prinz


    Sink The Banana wrote: »
    If people had jobs we wouldn't be talking about writing off mortgages would we?
    And the circle is complete ,round and round we go.

    Yes we would. One of Morgan Kelly's other arguments is, and has been for years, that wage rates have to be slashed in this country, public and private, in order to regain any sort of competitive edge. If you have a job but are earning a lot less than you were a few years ago then you'd still be in mortgage difficulty.


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    #91
    Frank Black
    Closed Accounts Posts: 4,296 ✭✭✭Frank Black


    Sofa King Great wrote: »
    I know we are both agreeing here but can you provide any examples of debt forgiveness by NAMA?

    http://businessetc.thejournal.ie/namas-loan-book-already-has-e1-7bn-in-worthless-debt-2010-10/


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