Upside's of the downturn?

dceire

Given all the doom and gloom around what with all the War, crime, oil prices, global warming, flooding and in particular the 'recession' have we anything good to expect in the near future.

Here’s a few to get us started:
1. Seem's we'll all have less money maybe there will be less fat people!:D
2. You wont feel bad about giving crappy or hand-made presents for Christmas, birthdays etc.
3. You wont feel bad about staying at home watching TV for days!
4. Alot of good music is written about the bad times 'Rent Day Blues', 'Ghost of Tom Joad' etc

Macha

5. The idea of young professionals being able to afford a home isn't as laughable as it was 3 years ago
6. Cheaper rent - woohoo!

Turd Ferguson

People will stop giving their change to homeless people and they will all eventually die, thus cleaning up the streets.

Pj!

Yeah agree with the good music. We need something good to complain about to write good music.

dotsman

1. Seem's we'll all have less money maybe there will be less fat people!:D
Unfortunately, it tends to be those who have less money to spend on food who usually end up buying the cheap fatty foods, eating in chippers etc
2. You wont feel bad about giving crappy or hand-made presents for Christmas, birthdays etc.
You should always feel bad about giving a crappy present (well , if it's to me anyway;))
3. You wont feel bad about staying at home watching TV for days!
Just like student life so
4. Alot of good music is written about the bad times 'Rent Day Blues', 'Ghost of Tom Joad' etc
OK, I'll give you that (but you have to admit a lot of ****e music is also written during recessions - we'll start with rick ashley!)
5. The idea of young professionals being able to afford a home isn't as laughable as it was 3 years ago.
Well, it's actually getting worse for them as the banks will be lending less and they won't have jobs (high paying ones anyway) to pay the mortgage!
6. Cheaper rent - woohoo!
True, but seeing as renters are going to be renting for a very long time, they'll need all the help they can get!

Dirk Gently

dceire wrote: »

have we anything good to expect in the near future

estate agents will be unemployed and unable to secure a mortgage for themselves.

dceire

dotsman wrote: »

1. Seem's we'll all have less money maybe there will be less fat people!:D
Unfortunately, it tends to be those who have less money to spend on food who usually end up buying the cheap fatty foods, eating in chippers etc!

Dotsman your exactly whats wrong with these doom & gloom days, lighten up!
Anyway do you ever watch the news? May i draw your attention to third world countries, all the people look like Keira Knightly...now think Ireland in say 2 years. A load of ginger Keira Knightlys full of Freckles!!!:D

dotsman

dceire wrote: »

A load of ginger Keira Knightlys full of Freckles!!!:D

I'm sure there's a biblical reference for this...





































...oh yeah, armaggedon

dceire

I know it'll be great...now who's with me! ...Anyone?

ejmaztec

Old recession quip No 1.

Only a pigeon will be able to put a deposit on a Merc.

runningman

Anyone with a good permenant pensionable job becomes very attractive - roll on the super models!!!

mumhaabu

The best thing about the recession is maybe eventually people might wake up for once in their lifes and realise the proper bunch of ****€rs Fianna Fail are may learn to give them the electoral kicking they deserve.

Cookie_Monster

YOUR MA!!!

Run_to_da_hills

Those on the Dole now have it better than those in the 80ies, ie hundreds of Sat channels, Broadband, and a wide range of video game consuls to choose from so there is never a dull moment

On the downside of todays dole drawers is that they are only officially allowed 12 days annual holidays. If they want to travel abroad and they must get a form signed from the dole office before they leave the country

mumhaabu

Cookie_Monster wrote: »

YOUR MA!!!

I got banned from here for saying this how about a little consistency now!

ejmaztec

mumhaabu wrote: »

I got banned from here for saying this how about a little consistency now!

Saying what?

Turd Ferguson

ejmaztec wrote: »

Saying what?

For saying Yor....oh I see what you're trying to do there!!!

SimpleSam06

dotsman wrote: »

Well, it's actually getting worse for them as the banks will be lending less and they won't have jobs (high paying ones anyway) to pay the mortgage!

That would be one of the major reasons prices are collapsing, the banks are lending less. You don't get priced out of the market on the way down, a product is only worth what the market can or will pay for it. The worst off will be those that bought in the last three or four years, already in negative equity and being handed a six-figure hiding by interest rate rises. And the lower prices fall, the longer back that cutoff point stretches.

dotsman wrote: »

True, but seeing as renters are going to be renting for a very long time, they'll need all the help they can get!

What does this mean?

dotsman

SimpleSam06 wrote: »

That would be one of the major reasons prices are collapsing, the banks are lending less. You don't get priced out of the market on the way down, a product is only worth what the market can or will pay for it. The worst off will be those that bought in the last three or four years, already in negative equity and being handed a six-figure hiding by interest rate rises. And the lower prices fall, the longer back that cutoff point stretches.

Oh, you can easily get priced out of the market on the way down. That's what's happening now in many cases. There are a lot of people who, over the past year, have seen the amount they can borrow reduce much further than the price of houses have. Fact is, there is no typical FTB (ie who is heavily dependant on a high LTV mortgage) in a better position today than they were this time last year. In fact, many are worse off. The only people who can enjoy the reduced prices are those that are cash heavy, and only need a lower LTV mortgage.

SimpleSam06 wrote: »

What does this mean?

I thought that was pretty self explanatory. I am assuming that most people are renting now with the intention of one day owning their own home. To be able to do so, they are going to need one mother of a deposit (compared to the last few years), and having been a renter before I bought, I know just how hard it is to save for a deposit while forking over for ridiculous rent (for me, I'm actually paying less on my mortgage than I did on rent!). Therefore, they are likely to be renting for a very long time.

ewj1978

1:there'll be more ladies on the streets doing their thing for even less money..(competition sucks )

ewj1978

ewj1978 wrote: »

1:there'll be more ladies on the streets doing their thing for even less money..(competition to suck )

fixed it for yer...

ewj1978

cheers bud +1..

eoferrall

SimpleSam06 wrote: »

That would be one of the major reasons prices are collapsing, the banks are lending less.

What about the fact that people wont sell, it doesn't matter if "market prices" fall, people will not move as much and be more inclined to stay exactly were they are. Only people who HAVE to move for what every reason ultimately lose out. Yes people are paying hefty mortgages etc but they have a house and if they can afford the mortgage, then they are not that much worse off, unless they need to sell at bottom of price crash. So as i said only those who have to sell majorly lose out.

SimpleSam06

dotsman wrote: »

Oh, you can easily get priced out of the market on the way down. That's what's happening now in many cases. There are a lot of people who, over the past year, have seen the amount they can borrow reduce much further than the price of houses have.

Hahaha, ah yes. It doesn't work like that, sorry. Prices are falling to meet the amount people can pay for them, just the same way they rose to accommodate the loosened lending conditions on the way up. All an FTB needs to do is sit on their arse and they'll save six figures over the lifetime of a mortgage.

This fact is terribly upsetting to all the vested interests and specuvestors, but it doesn't change the fact that it is a fact.

dotsman wrote: »

In fact, many are worse off. The only people who can enjoy the reduced prices are those that are cash heavy, and only need a lower LTV mortgage.

Goodness gracious, you mean the banks have started to practise responsible lending, rather than the idiotic free for all they were indulging in over the last eight years? :eek:

dotsman wrote: »

I thought that was pretty self explanatory. I am assuming that most people are renting now with the intention of one day owning their own home. To be able to do so, they are going to need one mother of a deposit (compared to the last few years), and having been a renter before I bought, I know just how hard it is to save for a deposit while forking over for ridiculous rent (for me, I'm actually paying less on my mortgage than I did on rent!). Therefore, they are likely to be renting for a very long time.

Wrong again, I'm afraid. Even with the reduced prices, renting in many places is still less than the interest portion on a mortgage, which is just as "dead" as rent. So if someone can afford a reasonable mortgage, they can afford to save up for a few years to gather a decent deposit. This has the added advantage that prices are dropping constantly, so they will end up with a smaller mortgage over a lesser period of time, as I said, saving them six figures over the course of a mortgage.

Its not as self explanatory as some would like it to be.

SimpleSam06

eoferrall wrote: »

What about the fact that people wont sell, it doesn't matter if "market prices" fall, people will not move as much and be more inclined to stay exactly were they are.

With 40% of demand at the peak being investors on mostly IO mortgages, I'd say there are more than enough sellers under severe pressure to drive prices down generally. Many of these properties have to be sold, and sold they will ultimately be.

If you're thinking about renting instead to cover the mortgage, well lots of other people had the same idea, which is why rents are falling across the board, producing the sorry rental yields that currently exist, so it makes even more sense to rent for the moment.

eoferrall wrote: »

Only people who HAVE to move for what every reason ultimately lose out. Yes people are paying hefty mortgages etc but they have a house and if they can afford the mortgage, then they are not that much worse off, unless they need to sell at bottom of price crash. So as i said only those who have to sell majorly lose out.

Do you have any conception how much property was sold '01 to '06? There are around a quarter of a million empty properties in this country according to the CSO, almost a decade's supply, even if not one other house is built (and they are still building), the majority of which are likely "investment" properties.

The property forum is already seeing the first of no doubt many people looking for a way to cut their losses after they overextended themselves to get on the ladder, in unsaleable apartments in serious negative equity.

SimpleSam06

eoferrall wrote: »

What about the fact that people wont sell, it doesn't matter if "market prices" fall, people will not move as much and be more inclined to stay exactly were they are.

Also, just to back up my point, here are the stats for properties for sale and rent on Daft. Seeing any trends there?

Sorry lads, reality disagrees with your arguments.

dotsman

SimpleSam06 wrote: »

Hahaha, ah yes. It doesn't work like that, sorry. Prices are falling to meet the amount people can pay for them, just the same way they rose to accommodate the loosened lending conditions on the way up. All an FTB needs to do is sit on their arse and they'll save six figures over the lifetime of a mortgage.

This fact is terribly upsetting to all the vested interests and specuvestors, but it doesn't change the fact that it is a fact.


Goodness gracious, you mean the banks have started to practise responsible lending, rather than the idiotic free for all they were indulging in over the last eight years? :eek:

Wrong again, I'm afraid. Even with the reduced prices, renting in many places is still less than the interest portion on a mortgage, which is just as "dead" as rent. So if someone can afford a reasonable mortgage, they can afford to save up for a few years to gather a decent deposit. This has the added advantage that prices are dropping constantly, so they will end up with a smaller mortgage over a lesser period of time, as I said, saving them six figures over the course of a mortgage.

Its not as self explanatory as some would like it to be.

Let me guess - you're one of them from the property pin or other such websites.

I honestly don't know where to start. To be honest, from your post, it seems that a reasonable debate would prove impossible. If you do want to start a separate thread, go ahead, because this thread will go seriously off topic.

Back on topic. An upside to this downturn? Perhaps all those who wished for doom will come to realise their mistake.

SimpleSam06

dotsman wrote: »

Let me guess - you're one of them from the property pin or other such websites.

Nope, I keep away from there because you have too many singing from the same hymnsheet. Dissent is healthy, not to mention entertaining.

dotsman wrote: »

I honestly don't know where to start. To be honest, from your post, it seems that a reasonable debate would prove impossible. If you do want to start a separate thread, go ahead, because this thread will go seriously off topic.

Well a couple of points, if you don't want to deal with the accurate points I have raised, you forfeit the discussion, and secondly, this is AH. I can't remember the last time an offtopic objection was raised.

dotsman wrote: »

Back on topic. An upside to this downturn? Perhaps all those who wished for doom will come to realise their mistake.

And perhaps all those who caused the problem by their greed and stupidity will be punished?

SimpleSam06

SimpleSam06 wrote: »

And perhaps all those who caused the problem by their greed and stupidity will be punished?

The banks are certainly getting a caning at the moment, but they have our savings down the back of their trousers, and keeping them to bail out their cohorts in the construction industry.

SimpleSam06

Deleted User wrote: »

The banks are certainly getting a caning at the moment, but they have our savings down the back of their trousers, and keeping them to bail out their cohorts in the construction industry.

Yes, I think up to €22,000 is covered by the government in any one account, so it might be an idea to spread your money around, although I would say the possiblity of one of the big ones tanking is fairly remote.

The news from the international markets is frankly terrifying at the moment, you have the US government seizing control of Fannie Mae and Freddy Mac, the two companies responsible for over five trillion in mortgage debt, with almost ten percent of mortgage holders behind or in default stateside, along with record lows on the stock markets, and scary words like stagflation (thats when the economy starts turning into a third world economy) being muttered behind closed doors. The pound sterling is collapsing and analysts are reporting "ugly data" coming down the wires. Even the Chinese are looking at a kicking, which might only be expected after a thirty year boom, but they couldn't have picked a worse time for it.

We live in interesting times.

ejmaztec

Give it a few years and the Africans will be buying our fair-trade butter.

dotsman

SimpleSam06 wrote: »

Nope, I keep away from there because you have too many singing from the same hymnsheet. Dissent is healthy, not to mention entertaining.


Well a couple of points, if you don't want to deal with the accurate points I have raised, you forfeit the discussion, and secondly, this is AH. I can't remember the last time an offtopic objection was raised.

I'll deal with the points you have raise, if you are willing to listen and open your mind! As regard off-topic, perhaps a mods can split this thread into a new one (just because it happens regularly in after hours, doen't mean I like it!)

SimpleSam06 wrote: »

And perhaps all those who caused the problem by their greed and stupidity will be punished?

Unfortunately, the people who caused this include the vast majority of the populatio! There was no conspiracy, no one force behind this. We would all love to find a scapegoat. For me, the government are the only ones who need to take a hit on this. Everyone else was just doing what they were allowed to do. It's a free market, and builders, EA's investors etc were all just going what they were supposed to do - make a profit! That's why, the only one's who should take responsibilty are the goverment - they should have stepped in and enforced controls (through tax/stamp duty changes instead of the opposite - tax breaks for developers/investors). However, again, as the government's ultimate boss, we the people allowed them continue on!

Ultimately, thse who gained most from the past 10 years won't suffer at all from any downturn. Most of them have long since cashed out and left the average joe mixed in with the reckeless fool to pick up the pieces.

SimpleSam06

dotsman wrote: »

I'll deal with the points you have raise, if you are willing to listen and open your mind!

I deal with facts, and attempt to make reasonable predictions based on those facts. Whether or not you like those facts is irrelevant to me. If you have new facts to bring to the table rather than handwaving opinion, I'll happily discuss with you. If your facts are more in line with reality than mine, I'll even change my mind!

dotsman wrote: »

As regard off-topic, perhaps a mods can split this thread into a new one (just because it happens regularly in after hours, doen't mean I like it!)

Actually, the topic is "upsides of the downturn", and one poster rightly pointed out that dropping property prices were an upside. You responded with the oft-repeated fallacy that it wasn't a good thing, and I corrected you on that. I would say its perfectly on-topic, in that I agree with the original poster.

dotsman wrote: »

Unfortunately, the people who caused this include the vast majority of the populatio!

No, I would lay the blame largely on irresponsible lending practices by the banks.

dotsman wrote: »

There was no conspiracy, no one force behind this. We would all love to find a scapegoat. For me, the government are the only ones who need to take a hit on this.

We are the government, and whatever hit the government takes will be taken by us in the form of our taxes. There is already a cack handed effort underway to subsidise FTBs with grants, an effort which I personally will be responding to by giving amounts equal to or greater than the extremely large amounts of tax I pay to whichever party will put a stop to it.

dotsman wrote: »

Everyone else was just doing what they were allowed to do.

And they shouldn't have been allowed to do it, relaxing banking regulations to allow such idiocy as securitisation was a big mistake, along with philosophies like "knowledge economies". Madness.

dotsman wrote: »

That's why, the only one's who should take responsibilty are the goverment - they should have stepped in and enforced controls (through tax/stamp duty changes instead of the opposite - tax breaks for developers/investors). However, again, as the government's ultimate boss, we the people allowed them continue on!

While I provisionally agree with you that most of the politicians in charge of the boom should be placed in a small cell until the economy recovers, the entire blame cannot be laid upon them.

dotsman wrote: »

Ultimately, thse who gained most from the past 10 years won't suffer at all from any downturn.

Tell that to the banks.

If you're in the repossession business, the next few months are likely to be very busy!

dotsman

SimpleSam06 wrote: »

I deal with facts, and attempt to make reasonable predictions based on those facts. Whether or not you like those facts is irrelevant to me. If you have new facts to bring to the table rather than handwaving opinion, I'll happily discuss with you. If your facts are more in line with reality than mine, I'll even change my mind!


Actually, the topic is "upsides of the downturn", and one poster rightly pointed out that dropping property prices were an upside. You responded with the oft-repeated fallacy that it wasn't a good thing, and I corrected you on that. I would say its perfectly on-topic, in that I agree with the original poster.


No, I would lay the blame largely on irresponsible lending practices by the banks.


We are the government, and whatever hit the government takes will be taken by us in the form of our taxes. There is already a cack handed effort underway to subsidise FTBs with grants, an effort which I personally will be responding to by giving amounts equal to or greater than the extremely large amounts of tax I pay to whichever party will put a stop to it.


And they shouldn't have been allowed to do it, relaxing banking regulations to allow such idiocy as securitisation was a big mistake, along with philosophies like "knowledge economies". Madness.


While I provisionally agree with you that most of the politicians in charge of the boom should be placed in a small cell until the economy recovers, the entire blame cannot be laid upon them.


Tell that to the banks.

Why blame the banks? And which banks are you referring to (there's a lot of them and they had very different lending practices)? For example, AIB barely changed it's lending policy over the past 10 years, while the sub prime banks had only just entered the market as we were peaking.

Ultimately, why aren't you blaming the people who borrow money from the banks? A bank answers to it's shareholders (for the big Irish banks, that's the vast majority of us, as during the boom, many investment funds/pensions would have held some financial stocks). If the customer wants the money, and looks like a safe bet, then why shouldn't the bank lend to them?

As regards securitisation, although relatively new to Irish banks, as a concept it has been popular in the states since the 70's and only now is it biting us in the ass. Ultimately, it's not securitisation that's messed things up, it's the american subprime lenders that took advantage of securitisation to hide their ****e loan quality that is screwing the global economy. As regards securitisation in Ireland - Relativley new and has had no negative impact on us (and hopefully never will!).

Parsley

https://www.youtube.com/watch?v=i01fYbRQjWM

Don't mind if I do! :pac:

gamer

Maybe people will stop buying things they dont need on credit cards,or taking out loans on 20k cars,go back to buying things when you have money,it might be easier for young people to buy a house.Maybe people will stop trying to keep up with the jones, i remember pre celtic tiger ,people were more friendly ,had more time to talk, young people were not obsessed with brand names,people were not so materistic,theres loads of people pretending to be well off ,when they are buying most things on credit.NO economy can prosper on building houses ,and selling them to each other,or borrowing money to increase houses prices ,this housing boom was financed by borrowed money from germany etc
at some point it becomes unsustainable,interest rates go up, the no of buyers decreases.WE had 80 thousand immigrants last year so the recession does,nt seem to be stopping them from coming here.I ,ve seen rents go up in dublin this year on houses anyway.

SimpleSam06

dotsman wrote: »

Why blame the banks? And which banks are you referring to (there's a lot of them and they had very different lending practices)?

Loans are given out at the discretion of the banks, and loans were given to people who should never have gotten them. The euro value of these loans to a great extent dictated house prices on the way up, as they will on the way down. It certainly had shag all to do with supply and demand.

dotsman wrote: »

For example, AIB barely changed it's lending policy over the past 10 years, while the sub prime banks had only just entered the market as we were peaking.

There might have been no official "subprime market" in Ireland on paper, but there certainly was the wink and nod whereby loans were given to people who shouldn't have gotten them. In 2006, as Ireland was reaching the peak of its property prices, the first of the subprime bankruptcies was reported in the US.

dotsman wrote: »

Ultimately, why aren't you blaming the people who borrow money from the banks?

The entire environment at the time was toxic - with a few exceptions, everybody was saying that you can't lose on property. I include family and friends in their number, by the way. This needs to be understood in order to understand the decisions that were made at the time, and to a certain extent abrogates responsiblity. Not fully, of course.

dotsman wrote: »

A bank answers to it's shareholders (for the big Irish banks, that's the vast majority of us, as during the boom, many investment funds/pensions would have held some financial stocks). If the customer wants the money, and looks like a safe bet, then why shouldn't the bank lend to them?

When you dilute responsibility to the extent that you are talking about a pension fund being administered by a group that you have little or no control over, responsibility effectively does not exist.

dotsman wrote: »

Ultimately, it's not securitisation that's messed things up, it's the american subprime lenders that took advantage of securitisation to hide their ****e loan quality that is screwing the global economy. As regards securitisation in Ireland - Relativley new and has had no negative impact on us (and hopefully never will!).

You are incorrect in this, securitisation allowed banks to package up loans, whether good or bad, and sell them on to investment funds or whatever. this created the rapidly dissolving illusion of security (hence the name) for the banks, and contributed to loosened lending conditions which in my opinion are most responsible for the boom and ensuing wreckage.

phantom_lord

mumhaabu wrote: »

The best thing about the recession is maybe eventually people might wake up for once in their lifes and realise the proper bunch of ****€rs Fianna Fail are may learn to give them the electoral kicking they deserve.

and who would u want to be in power instead? fg? they'd do an even worse job.

dotsman

SimpleSam06 wrote: »

Loans are given out at the discretion of the banks, and loans were given to people who should never have gotten them. The euro value of these loans to a great extent dictated house prices on the way up, as they will on the way down. It certainly had shag all to do with supply and demand.

There might have been no official "subprime market" in Ireland on paper, but there certainly was the wink and nod whereby loans were given to people who shouldn't have gotten them. In 2006, as Ireland was reaching the peak of its property prices, the first of the subprime bankruptcies was reported in the US.[/quote]

And who dictates who should get a loan or not? I go back to my point about what you mean by "the banks". Are you throwing every bank into that or are you focusing on certain banks or even certain lenders within a bank? Again, banks are a business and it is their obligation to their shareholders to not turn down a profit. Are you saying that Joe Soap who is applying for the loan bears no responsibility for that loan? The amount of people who I heard complaining that the bank wouldn't loan them enough was ridiculous.

Don't get me wrong. The easy flow of credit was factor in all this. But to say that the blame lies solely with "the banks" is simplifying it a bit (no pun intended;))

SimpleSam06 wrote: »

When you dilute responsibility to the extent that you are talking about a pension fund being administered by a group that you have little or no control over, responsibility effectively does not exist.

Is it not the same with all large corporations?

I don't know if you have any investments or a pension, but if you did, would you turn down an investment/pension that is generating 15% p.a. (that held shares in a bank what was generating large profits) over an investment/pension that returns a 5% return (that only invested in banks that turned down loads of its customers)?

Again, I go back to my point that the vast majority of people were in some way (directly or indirectly) profiting from the housing boom, and thus there was reluctance to step in and stop it. There was no one force behind this. It was the entire system all working together.

SimpleSam06 wrote: »

You are incorrect in this, securitisation allowed banks to package up loans, whether good or bad, and sell them on to investment funds or whatever. this created the rapidly dissolving illusion of security (hence the name) for the banks, and contributed to loosened lending conditions which in my opinion are most responsible for the boom and ensuing wreckage.

But my point is that it wasn't the securitisation itself that was the problem. It was , as you said, that some banks took adavantage of securitisation and were throwing in high risk loans into these packages and thus hiding them. Not all packages are performing badly. It's just some (and unfortunately, these ones are only coming to in the past year).

jackbutler

ejmaztec wrote: »

Give it a few years and the Africans will be buying our fair-trade butter.

And then they'll challenge us to Monster Chess with their mile-wide chessboard as a means of gaining world domination.

xbox36016

evary thing is now cheaper who ho

Quazzie

xbox36016 wrote: »

evary thing is now cheaper who ho

including dictionaries. Invest in one

SimpleSam06

dotsman wrote: »

Don't get me wrong. The easy flow of credit was factor in all this. But to say that the blame lies solely with "the banks" is simplifying it a bit (no pun intended;))

Whatever. No matter how complex the picture gets, one single thing remains constant throughout: On the way up, money supply was loose, on the way down, money supply was tight. I'm not one to confuse causation with correlation, but in my estimation that puts the money supply, and those in charge of it, the banks, directly responsible. These people are meant to be financial experts, but their expertise didn't apparently extend to the inevitable results of handing loans to many people who should never have had them, the inevitable results for the institutions they purported to represent, and the results for the wider economy.

Its also worth noting that a lot of banks sold and leased back their own premises at the height of the boom, which leads us to one of two conclusions: either they knew exactly when the property market would peak and sold to maximise their profits, which makes their ruinous lending policies all the more damning, or they were unable to realise the capital any other way, meaning no one else would lend them the money, so they should have known that things were out of control.

dotsman wrote: »

I don't know if you have any investments or a pension, but if you did, would you turn down an investment/pension that is generating 15% p.a. (that held shares in a bank what was generating large profits) over an investment/pension that returns a 5% return (that only invested in banks that turned down loads of its customers)?

Mickey O'Pension doesn't have any input on where his pension is invested, in any real sense.

dotsman wrote: »

Again, I go back to my point that the vast majority of people were in some way (directly or indirectly) profiting from the housing boom, and thus there was reluctance to step in and stop it.

Hold on a minute there. The vast minority of people were profiting from the boom. A larger chunk thought they would potentially profit and thus had a vested interest in seeing it continue. An even larger chunk confused getting a low interest loan from the bank with profit, and forgot they had to repay it, so they had a somewhat confused interest in seeing it continue.

Its a comfort to some people to wave the hand and magically everyone is guilty. They are not.

dotsman wrote: »

But my point is that it wasn't the securitisation itself that was the problem. It was , as you said, that some banks took adavantage of securitisation and were throwing in high risk loans into these packages and thus hiding them.

Securitisation isn't a simple phenomenon, ever since its introduction in Ireland in 1991, it has developed into ever more complex and entangled financial products with broader scope and wider ramifications, which culminated in 2003 with the ICB Pfandbrief-style bond, note that was three years before the peak.

Both the level and type of allowed securitisation and what the banks securitised were seriously flawed, and to have a framework in place that allowed that was insane.

This also explains why EURIBOR and interbank lending rates went north in the last while, banks no longer trust each other. Conversely you can point the finger and say that they trusted one another too much prior to the boom, allowing much more free capital to flow than they should have.

The wink and nod environment wasn't just confined to Ireland either, and subprimes aren't the most toxic things wrapped up in those packages. The At-As (people who got loans on the sole criteria of having a good credit record) and the Primes (problematic because lots of people attempting to be investors in the states got IO mortgages which should start expiring oh around 2009) are about to hit, and by all accounts will make the subprime crisis look like a ten euro flutter down the Galway races. This is why the USG is in the process of removing the top management from Freddie Mac and Fannie Mae, and seizing control of the companies.

ewj1978

ohmy simplesam06.... are you actually THE eddie hobbs? .... loving this thread btw.+1

eoferrall

SimpleSam06 wrote: »

If you're thinking about renting instead to cover the mortgage, well lots of other people had the same idea, which is why rents are falling across the board, producing the sorry rental yields that currently exist, so it makes even more sense to rent for the moment.

I know the thread as moved on while I was busy, but I am aware of this and yes it does make sense to rent for a while (even if it is to wait and see to what extent prices fall and so on)

SimpleSam06 wrote: »

Do you have any conception how much property was sold '01 to '06? There are around a quarter of a million empty properties in this country according to the CSO, almost a decade's supply, even if not one other house is built (and they are still building), the majority of which are likely "investment" properties.

I do have an idea of the transactions that took place, but also the construction levels that were occurring at that time also. Now the levels of construction are minuscule in comparison. I was just making the point that some people seem to think prices will fall massively. I have heard people talking about prices halving, to me this is ridiculously exagerated. As we both agree people who have to sell will have to and accept whatever price they can get, those who don't have to wont. Yes house prices will fall but to what extent is the unknown quantity really.

And since we agree on the points Ultimately, on a side note the Daft stats you have linked to. I am wondering how accurate that data is of the market. I know the renting is but i would never have considered putting a house for sale on the site, or looking for a house there. I am just wondering if the changes reflect people trying to sell privately like secondhand cars are now on carzone etc? you can correct me if i am wrong. i only had quick glance but it seemed to be it was only for daft and not the figures for the whole market. Just asking a point before i gat killed for saying its not true!;)

SimpleSam06

ewj1978 wrote: »

ohmy simplesam06.... are you actually THE eddie hobbs?

No, I am in negotiations to be his stunt double in Die Hard 5 though.

SimpleSam06

eoferrall wrote: »

Now the levels of construction are minuscule in comparison.

Not so much, last time I checked there were still around 30,000 being completed per year, which isn't so far off natural demand in Ireland. Definetely nowhere near the 90,000 being completed at the peak, but more than enough to amke most of the houses built in the boom times redundant.

eoferrall wrote: »

I was just making the point that some people seem to think prices will fall massively. I have heard people talking about prices halving, to me this is ridiculously exagerated. As we both agree people who have to sell will have to and accept whatever price they can get, those who don't have to wont.

Well think about it, if you bought in the last X number of years, unless you bought a family home that you are content to live in for the next two or three decades, and have safe and stable employment, you are under pressure to sell. Given how difficult and expensive it was to purchase a good house in the boom, that number must be vanishingly small. X in this case by the way is a number that keeps getting bigger the further prices drop.

In my opinion, prices will drop around 50% from peak, depending on a lot of factors. I mean look, they've dropped what, 15% in two years? I can't see this train wreck coming to a halt until 2012 anyhow...

eoferrall wrote: »

I am wondering how accurate that data is of the market.

Well of course it only shows the people who advertised online through daft. However daft is the largest property website in the country, no doubt about that, with some staggering figures in terms of traffic, and no real estate agent can afford not to be seen on daft.

Also, if you look at the numbers there, its coming up to 80,000 properties for sale nationwide, and might hit 100,000 around christmas. If there is a significant percentage who are not advertising on Daft, that makes the situation for sellers even worse.

SimpleSam06

SimpleSam06 wrote: »

Not so much, last time I checked there were still around 30,000 being completed per year, which isn't so far off natural demand in Ireland. Definetely nowhere near the 90,000 being completed at the peak, but more than enough to amke most of the houses built in the boom times redundant.
.

For what it's worth.

I've noticed that in my neck of the woods (west of Athlone) there is still plenty of "one off housing" being constructed!

During the boom times, deveopers just went and built the "wrong type of houses" by that I mean are ones that should produce a quick ROI rather than ones that people need & want and in the right places of course.

eoferrall

SimpleSam06 wrote: »

Also, if you look at the numbers there, its coming up to 80,000 properties for sale nationwide, and might hit 100,000 around christmas. If there is a significant percentage who are not advertising on Daft, that makes the situation for sellers even worse.

This is a very good point, I had not considered that side of it when looking at the data. The situation is most likely far worse than that on daft at the minute.

Deleted User wrote: »

For what it's worth.

I've noticed that in my neck of the woods (west of Athlone) there is still plenty of "one off housing" being constructed!

During the boom times, developers just went and built the "wrong type of houses" by that I mean are ones that should produce a quick ROI rather than ones that people need & want and in the right places of course.

Isn't there apparently something like 250,000 empty houses in Ireland currently. that would tie in with that they have built the wrong houses for demand.

gurramok

eoferrall wrote: »

I was just making the point that some people seem to think prices will fall massively. I have heard people talking about prices halving, to me this is ridiculously exagerated.

Why so exaggerated?

Prices doubled between 2002 and 2006, most people back in 2002 would of laughed at others if they thought prices would double within 4 years.

eoferrall wrote: »

As we both agree people who have to sell will have to and accept whatever price they can get, those who don't have to wont. Yes house prices will fall but to what extent is the unknown quantity really.

They will fall alot more, how far we do not know but taking in what has happened in similar housing bubbles worldwide, half priced houses cannot be ruled out as evidence is there from other countries that went through a housing bust.

eoferrall wrote: »

Isn't there apparently something like 250,000 empty houses in Ireland currently. that would tie in with that they have built the wrong houses for demand.

Yes, both urban and rural Ireland have massive amounts of empty housing.
At least 40,000 alone in the Dublin area, most of them new as devised from the previous two CSO census.