Can someone please explain to me why NAMA is even needed?

sdanseo

I'm a student with a very keen interest in politics, but no interest in joining a party. Just an interest and a fair bit of knowledge. I understand the basic concept of NAMA, and have a very basic knowledge of economic theory, but I don't quite get why it's needed. I've gone from a higher than average knowledge of the subject to out of my depth in 6 months. How come in the year since the markets plummeted the banks have somehow survived? Why do they need money now and not a year ago? And why in the name of all that's holy should we the taxpayers be expected to bail out private enterprise?

Leaving the opinions of whether or not it is needed aside, can someone, or a combination of people, please try and explain to me in simple terms why this is being forced upon us even though everyone seems to be against it, and common sense says we can't afford to pay €54bn (almost the ENTIRE budget for last year, as I recall)? Why not just LET the banks flounder? Surely it would come right in a natural way? (I don't nessecarily think this, just putting it out there)...

Discuss.

PCPhoto

if the banks cannot get the money they risk going tits up (like Iceland) .... and what would happen would also have been similar to Northern Rock ...people outside demanding their money .... all hell breaking loose.

and since we are in the Eurozone - it would have severe consequences for the currency and also for our economic trade partners.

thats my understanding anyway.

PCPhoto

as it stands the loans cannot actually be repaid - so the banks will have to write off some amount of the outstanding loans as bad debts - what the Government is doing is its helping the banks out by saying ....

The Banks dont need to loose out that much...we'll pay you for your loans (more than what you would have gotten 'cos the market is getting worse)..... so the Government is asking for a share in the ownership of the banks in a kind of swap deal for taking all the bad debts..... only question is how much of the banks will the government own...if it goes above 51% then I think the banks are nationalised and everyone elses shares are not worth as much as they think.

(I dont know what I'm rambling on about its after 2am...hardly a time for political/economic debate or discussion....im off to sleep)

starbelgrade

According to Labour, we are stumping up €34k per family for each family in the country to prop up the sh*tehawks, who along with the other members of the golden circle ( politicians & developers ) who got us into this mess in the first place.

Why not give US the money - yep every family gets €34k to either invest in new banks after these ones collapse, spend in the retail sector to get it going again, or just use to keep paying the bills for those who've lost their jobs?

The government, banks & developers fuelled the boom which was never gonna last - they f*cked up the country & it's finances & shafted it's people, leaving most of us in negative equity / saddled with debt / unemployed (or a combination of all those) & now WE have to pay to keep the whole corrupt system going & the boys in their jobs.

There SURELY must be SOME other solution to this mess, other than Lenihan throwing our hard earned cash away & quoting Obama while he does it.

Meanwhile - what the f*ck are they doing about job creation? FAS.. yr havin' a laugh.

Next, they'll be suggesting taking over unsold properties for social housing.. oh wait, that's part of the plan.

aftermn

Our banks have loaned huge amounts of money in Ireland. This money was borrowed from other banks in Europe and elsewhere. If they (our banks) go bust, the foreign banks will do what ACC are doing, look for their money back asap.
Imagine all borrowed money being recalled at the same time.

That is only half the problem.

With banks gone there would be no payments clearing system in place. Cheques, credit cards etc would no longer work.

We would be back to barter.

Society would last about a week.

starbelgrade

The whole scenario is obscene. Joe Soap owes money to the bank - he's lost his job & can't make the repayments, so he faces debt agencies, reposessions etc etc.

Developers owe HUMONGOUS amounts of money to the banks. They can't repay them, so they go bust. End of story.

Meanwhile Joe Soap foots the bill, but still has to repay what he borrowed.

Captain Furball

I thought developers were getting saved too?

Rockshamrover

What happens if I go to a bank to borrow money? They check me out to see if I can afford the loan and lend to me if they think that I can pay.

If I get into difficulties, they will renegotiate the terms of the loan based on my changed circumstances. If I cannot pay anything the bank will get what they can for the property and write off the balance. Basically the banks have allowed for a certain percentage of defaulters in calculating their interest rates and charges.

Why is it different for banks borrowing from other banks? BOI or AIB borrowed from international banks so that they could then lend to us. Those international banks lent to BOI etc based on their ability to pay. If BOI cannot meet their new commitments they fail. The international banks take the hit.
Why don't our banks renegotiate their loans with the international banks?
Pay back what THEY owe over the next 50 years. Why should we pay?

SLUSK

You could let the current banks go bust and let foreign banks take over, they have proven to be less incompetent. Bailing out the incompetent is disgusting.

Nietzschean

have they proven to be less incompetent though? between nationalisations, bad debt buying by govt.'s and re-capitalisation....a lot of western banks haven't done much better than our own

kippy

What really really bother me here is the fact that even if we do "bail out" the banks (not so much the developers, they still owe the money) we have no guarentee that the banks will play ball in the future. None at all, especially if we dont have a solid stake in them.
Imagine this:

1. NAMA saves the banks's collective asses.
2. Taxpayers foot the bill for years to come.
3. Eurozone interest rates rise betweek 3 and 4 % in the next five years. Oil rises significantly in the meantime.
4. Irish banks push up their mortgage rates for existing customers significantly.
5. A large portion of "mortgage holders" cant afford to pay mortgage, bills etc and banks repossess.

1. The banks "owe" US nothing. We've seen before after banks have gotten bailed out how little they "pay" us back and even more importantly, despite banks getting bailed out in the past, the governments,financial gurus dont seem to have learned anything from it.
2. When those things do happen, the banks will have another batch of "bad" loans. What happens then?

If banks REALLY are that critical to a country and its economics, they SHOULD, in my opinion, be completely state owned and run with the sole intention of supporting those who need them and NOT specificilly for profit. (I am not condoning state ownership, I know it doesnt work in all cases, but a different model is required)


I can see why a NAMA esqu entity is being put forward, as there are issues and letting a major bank fold is not in anyones interest, however in my opinion the ins and outs of NAMA are in the very very bad interests of the taxpayer.
To be honest I cant believe we are letting the same politicians and "experts" who so eagerly lead us into financial meltdown, write and set up the legislation for this entity.

kevpants

It's not needed.

This morning's surge in bank shares, despite how the media are reporting it, is a BAD thing. This isn't about keeping Irish society going, it's about keeping these banks in business DESPITE the fact that they ran their businesses into the ground. It's about driving up share prices. This has NOTHING to do with lending, it a bail out. You and I just handed over €54bn to let blokes who drive to work in €100k Mercedes wearing €2k suits off the hook.

The government could easily have let the banks deal with it themselves and if they went under, nationalise them. At least then we OWN the banks in entirety and the gobsh*tes running them would be out on the street, we own nothing now! We're broke and will be for a long long time.

We are more than screwed.

djpbarry

starbelgrade wrote: »

The whole scenario is obscene. Joe Soap owes money to the bank - he's lost his job & can't make the repayments, so he faces debt agencies, reposessions etc etc.

Developers owe HUMONGOUS amounts of money to the banks. They can't repay them, so they go bust. End of story.

Meanwhile Joe Soap foots the bill, but still has to repay what he borrowed.

Boo-****ing-hoo. Joe Soap shouldn’t have borrowed more money than he could afford to repay. It takes two to tango.

SLUSK

In a free market you let the incompetent go bust, simple as that. This is how the system should work. By bailing out bad banks you encourage excessive risk taking. You need the profit motive to keep companies to strive to improve, but you also need the fear of bankrupcy to avoid excessive risk taking.

Amhran Nua

kippy wrote: »

What really really bother me here is the fact that even if we do "bail out" the banks (not so much the developers, they still owe the money)

So why is Zoe going through extraordinary acrobatics to stay intact until NAMA is set up? Something to do with Lenihan's Deus ex Machina powers under NAMA?

kippy wrote: »

If banks REALLY are that critical to a country and its economics, they SHOULD, in my opinion, be completely state owned and run with the sole intention of supporting those who need them and NOT specificilly for profit.

Indeed, I didn't vote for anyone on the banks' boards of directors.

kippy

djpbarry wrote: »

Boo-****ing-hoo. Joe Soap shouldn’t have borrowed more money than he could afford to repay. It takes two to tango.

You see,

Joe Soap was well able to service his debt before he got laid off. No one really EVER factors in layoffs in ability to pay back debt and unless you are insured against it you are screwed.
Joe probably has bigger issues now like being able to put food on the table for his family.

I dont particularly like your attitude towards poor Joe.

kippy

Amhran Nua wrote: »

So why is Zoe going through extraordinary acrobatics to stay intact until NAMA is set up? Something to do with Lenihan's Deus ex Machina powers under NAMA?


Indeed, I didn't vote for anyone on the banks' boards of directors.

Good point re Zoe,
There is so much smoke and mirrors involved in that particular debacle, I really havent a clue as to what the fub happens.
To be honest, I think NAMA will be taking those Zoe loans one way or another anyway no matter the timing.

Amhran Nua

Reading between the lines, it seems clear that the directors of Zoe have been in communication with Lenihan or one of his proxies, and have received assurances that they will be better served and probably kept intact under NAMA than if they were liquidated entirely. Interesting and somewhat chilling stuff, the fingerprints of massive endemic corruption are all over this.

daveyboy_1ie

The ecnomy is stifled at the moment because banks are refusing to lend
unless you have very healthy circumstances. This is understandable as the mess they created in the first place with lending to people who clearly could not afford it if anything unfavourable happened (i.e. no Plan .

So now we have given the big boys €4 Billion each already lending certainly did not improve, all it did was improve the banks cash flows to pay themselves healthy bonuses when they proved they could not run their own businesses, any other managers would be replaced, removed or at worst, go bust.

Now we still have no gaurantees that lending facilities will be made available even aftre handing €54 Billion to them, so in affect the banks are being let off scott free and we the taxpayer are suffering.

And the 'takes two to tango' comment from the moderator is still valid, the difference is we are facing the consequences of paying the money we owe AND paying for the banks mistakes too (I am not, I knew from 8 years ago when I first wanted to buy a place that it could not last and bought recently when the market crashed and I still had my substantial savings from holding off for years ).

The whole FF mismanagement argument does not ring true either, this assumes they did not know what was going on and that to me just does not add up, they must have as the person on the street knew that the bubble was going to burst, or at least suspected it could not last forever.

So NAMA was a great idea on paper, but only with provisions from the bannks that they improve lending criteries, but doing so sensibly and promise to start repaying the debts when they return to profitability, which has not happened of course.

NAMA has the potential of causing more problems than its solving.

kippy

daveyboy_1ie wrote: »

And the 'takes two to tango' comment from the moderator is still valid, the difference is we are facing the consequences of paying the money we owe AND paying for the banks mistakes too (I am not, I knew from 8 years ago when I first wanted to buy a place that it could not last and bought recently when the market crashed and I still had my substantial savings from holding off for years ).

.

Well done,
Your medal is in the post.

IM0

the profoundly dirty secret is that the banks cant be allowed to fail. Banking = Civilisation (or so the powers that be would lead us to believe)

In short banks have governments over a barrel, they dont tend to close up shop either, rather change hands (be it mergers or tax payer nationalisation)
Banking began in Florence (Italy) you can draw your own conclusion there

If there is no consumer confidence in banks, then you get a run on it and everyone wanting their money....which the banks dont have :eek:
and before you know where you are 'civilisation' is crumbling around your ankles..

In short the less time spent thinking/researching and trying to figure out
why, the better, its just one big Pandoras Box that you dont want to open..every answer just leads to another question :cool:

I wish to cod that I never opened the box when I was younger..ignorance is bliss:P

MikeC101

me@ucd wrote: »

Banking began in Florence (Italy) you can draw your own conclusion there

Who were those guys Jebus bate out the temple then, surely they were a wuncha bankers?

On a more serious note, wouldn't the Templars (with say, letters of credit) have beaten the Florentine banks by a bit? What we would recognise as modern domestic banking maybe began in Florence though.

djpbarry

kippy wrote: »

Joe Soap was well able to service his debt before he got laid off.

Provided interest rates didn’t increase too much, yes (which was a big gamble).

kippy wrote: »

No one really EVER factors in layoffs in ability to pay back debt and unless you are insured against it you are screwed.

They should. Pretty much everyone is going to face a period out of work at some point in their lives. If losing your job suddenly plunges you into serious financial difficulty, there is something seriously wrong with your financial planning. Nobody should be totally dependent on their next (few) pay-packet(s). That’s before we even get into the very generous welfare supports available in this country and (as you mentioned) the availability of insurance.

kippy wrote: »

Joe probably has bigger issues now like being able to put food on the table for his family.

How many people in this country are struggling to feed their families as a result of recently losing their jobs?

me@ucd wrote: »

the profoundly dirty secret is that the banks cant be allowed to fail.

I think it’s probably more accurate to say that the entire banking system cannot be allowed to fail. Losing the odd pointless institution (such as Anglo-Irish) won’t bring an end to civilisation.

kippy

djpbarry wrote: »

Provided interest rates didn’t increase too much, yes (which was a big gamble).
They should. Pretty much everyone is going to face a period out of work at some point in their lives. If losing your job suddenly plunges you into serious financial difficulty, there is something seriously wrong with your financial planning. Nobody should be totally dependent on their next (few) pay-packet(s). That’s before we even get into the very generous welfare supports available in this country and (as you mentioned) the availability of insurance.
How many people in this country are struggling to feed their families as a result of recently losing their jobs?
I think it’s probably more accurate to say that the entire banking system cannot be allowed to fail. Losing the odd pointless institution (such as Anglo-Irish) won’t bring an end to civilisation.

1. Interest Rate rises and being out of work are two totally different things.
2. Joe could probably factor in large enough interest rate rises, so long as he had a job they wouldnt, in general, be a problem. Joe factors in not having a job, and he never ever gets a loan for anything, and probably doesnt have a family.
3.Suddenly losing ones job will plunge you into financial difficulty, more so if two earners in the house are out of work.
4. People out of work will feed their family before paying back a mortgage, yet the banks have no time for it.

I agree with your last point.

starbelgrade

djpbarry wrote: »

How many people in this country are struggling to feed their families as a result of recently losing their jobs?

Quite a large number, I would imagine. I know of one particular Joe who was self employed & due to the recession, has little or no business these days, is not entitled to Social Welfare & is living off savings that are soon going to run out.

He can't get a loan from the banks to tide him over, he gets no help from the state & he's very worried about the future.

It's a bit high & mighty to go around "boo-hooing" anybody who's in difficulty these days - a lot of people are up the swanny & very few see NAMA directly affecting them, apart from putting them further out of pocket.

It's times like these where a bit of empathy goes a long way... telling people that it's their own fault, gets no-body anywhere. I would have expected more from a a Mod.

djpbarry

kippy wrote: »

1. Interest Rate rises and being out of work are two totally different things.

Maybe, but they both fall into the ‘risk’ category.

kippy wrote: »

2. Joe could probably factor in large enough interest rate rises, so long as he had a job they wouldnt, in general, be a problem.

Bear in mind that interest rates have plummeted over the last 12 months or so. Were they to return to even mid-2008 levels, the average monthly mortgage payment would increase by a few hundred euro.

kippy wrote: »

3.Suddenly losing ones job will plunge you into financial difficulty, more so if two earners in the house are out of work.

And I’ll repeat again; if your family’s wellbeing is largely dependent on your next pay-check, you’re being incredibly reckless with your finances. Pretty much everyone will face unemployment at some point – you’ve got to be prepared for such an eventuality, especially if you’ve got kids depending on you.

kippy wrote: »

4. People out of work will feed their family before paying back a mortgage, yet the banks have no time for it.

The banks have no time for what exactly?

djpbarry

starbelgrade wrote: »

Quite a large number, I would imagine.

Define “large”.

starbelgrade wrote: »

It's a bit high & mighty to go around "boo-hooing" anybody who's in difficulty these days...

I’m not mocking people who have gotten into difficulty, I’m mocking a certain attitude, which is incredibly prevalent at the moment, that it’s all the fault of the banks and the government that so many people in this country have massive mortgages that they are having difficulty repaying. As I have said countless times on these fora in the past, nobody was forced into “investing” in property. A large chunk of the population were obsessed with getting on the property ladder and were prepared to stretch themselves to their financial limits to do so. That decision hasn’t worked out for a lot of people and they have to shoulder some of the responsibility themselves. Let’s also not forget that people were quite happy to re-elect Fianna Fáil as long as the value of their property continued to increase. We are all collectively responsible for the mess that this country is now in.

kippy

djpbarry wrote: »

Maybe, but they both fall into the ‘risk’ category.
Bear in mind that interest rates have plummeted over the last 12 months or so. Were they to return to even mid-2008 levels, the average monthly mortgage payment would increase by a few hundred euro.
And I’ll repeat again; if your family’s wellbeing is largely dependent on your next pay-check, you’re being incredibly reckless with your finances. Pretty much everyone will face unemployment at some point – you’ve got to be prepared for such an eventuality, especially if you’ve got kids depending on you.
The banks have no time for what exactly?

I am fully aware of interest rates and the impacts of their fluctuation.
Most people while working can take interest rates rising and have that factored in (or the banks should have done so)
Most people cannot pay back mortgages/loans etc without jobs and I would suggest that the vast majority of people with mortgages outstanding would not be able to pay them off at the same rate as they would have if they lost their jobs. Its simply not something you can factor in to making decisions on your future.
I personally believe your health is your greatest assest, followed closely by your job and both should be insured adequately, not everyone is of this opinion however.
How does one prepare for unemployment?

Joe has 3 kids under 7, his wife stays at home. He lives in Lucan, works in city center, commutes via bus. He has an annual salary of 55k gross. His mortgage is approximately €800 per month.

How does he plan for not having a job in the future? (a serious question, many here would like to know the answer to)
The simple answer is, he wouldnt have had kids nor bought a house were he to factor in job loses at some stage.
The banks have no time for hardluck stories from people like Joe.

kippy

djpbarry wrote: »

Define “large”.
I’m not mocking people who have gotten into difficulty, I’m mocking a certain attitude, which is incredibly prevalent at the moment, that it’s all the fault of the banks and the government that so many people in this country have massive mortgages that they are having difficulty repaying. As I have said countless times on these fora in the past, nobody was forced into “investing” in property. A large chunk of the population were obsessed with getting on the property ladder and were prepared to stretch themselves to their financial limits to do so. That decision hasn’t worked out for a lot of people and they have to shoulder some of the responsibility themselves. Let’s also not forget that people were quite happy to re-elect Fianna Fáil as long as the value of their property continued to increase. We are all collectively responsible for the mess that this country is now in.

I do agree with you're second point.
People HAVE to shoulder some of the responsibility themselves especially in the case of reckless borrowing. But there are lots of people out there who haven't borrowed recklessly but who may have followed all the advice and commentary coming from economists, state and private institutions over the years and who now find themselves out of a job with a mortgage that was completely manageable to pay before hand....

Amhran Nua

djpbarry wrote: »

A large chunk of the population were obsessed with getting on the property ladder and were prepared to stretch themselves to their financial limits to do so. That decision hasn’t worked out for a lot of people and they have to shoulder some of the responsibility themselves.

That responsibility starts and ends with their mortgage repayments however. The banks stretched themselves too far which is why the rest of us are now being held hostage to fill out their bottom line, so it pretty much is the fault of the banks.

Idbatterim

I assume the only reason bank shares fell from €18 to €.20 was that there were huge fears that they were going to be nationalised?

irish_bob

Idbatterim wrote: »

I assume the only reason bank shares fell from €18 to €.20 was that there were huge fears that they were going to be nationalised?

+1

no where in the western world have shares fallen more than in ireland in the past twelve mths , most were waiting for a sign that the banks would be protected , anyone who bought shares in the past few mths is up a fortune beit big or small but i see a sizeable sell off in the next week , the banks gains were not in anway based on merrit , they got a massive handout and many who bought in the past week will be happy with thier windfall and bail out again as thier is nothing in the wider economy to maintain large increases in share value , im not saying they will collapse again but last night was a once in a lifetime bonanza

starbelgrade

djpbarry wrote: »

I’m not mocking people who have gotten into difficulty, I’m mocking a certain attitude, .

Saying "boo-f*cking-hoo" as a response to a question about somone who's in financial difficulty is not mocking?

"I lost my arm because I stuck it in a machine"... "Boo-f**cking hoo, it's your own fault".

The person who lost their arm, or lost their house or assets, whether it be through their own fault, or because they were codgered into it.. well, the last thing they need is a "boo-f*cking-hoo" response.

It helps no-one.

Yes, we are all collectively responsible for the mess we are in. Some are more responsible for it than others. Some are personally more responsible than others.

We get that.

Last thing anyone needs is the higher than mighty attitude of.. "well, what do you expect? You shouldn't have expected that the job you had for the last 20 years would always feed your family - you've only yourself to blame"

Boo-f*cking-hoo.

How the hell did you even get to be a Mod? They should have made you a God instead.

Boo-f*cking-hoo.

Senna

Idbatterim wrote: »

I assume the only reason bank shares fell from €18 to €.20 was that there were huge fears that they were going to be nationalised?

Nationalised, collapsed etc, those share prices were based on a bubble and wont return to those levels unless we have another monumental bubble, please god we wont. The fall was the realisation that the banking system was a house of cards, built on nothing.
The 20-25% rises seen since yesterday were an indication of just how good a deal the banks got, and if they get the good deal someone else gets the bad deal....taxpayers.

As Lenihen said in his speech, NAMA is meant to protect banks from going into a "10 year Japan style zombie banking system", NAMA isn't to protect the banks from collapse, its to free up credit. There wont be a run on any bank as the state guarantee will largely stop that, without NAMA we will have banks functioning as they are at the moment, lending to business and people who are secure, not taking risks and looking for collateral and deposits to back up loans.
What i cant understand is what Lenihen actually thinks will happen once all the loans are transfered off the banks book, does he think they will go back to lending like they were in 2006?
Even they now know how reckless that was, they have just came from the brink of collapse (sept 08) they are going to be more cautious, no-one can or is forcing them to lend, so why would they? If they wont lend to someone today (as they deem the risk too big) will they decide tomorrow that its OK now, we'll give you the money, but there's still the same risk, It simply wont happen.
NAMA is a huge gamble at our expense, the best case scenario, as far as FF is concerned, is banks will lend more to business (or i'm sure they hope FTB's), but why would they? They had their fingers burnt, they got lucky with NAMA, they wont go back to previous lending levels.

Colpriz

Why was Ireland the first country in Europe to fall into recession???

Iceland was drowning, the UK pushed them under with some 'terrorist' banking laws or other so they could at least claim taxes on monies invested etc yet dont claim offshore taxes from the likes off the Isle of Mann...

WTF have this country been doing with money? Spending.. yes of course..where?

Why cant we freeze assets of Irish banks..pay up..we dont own a fcuk here!

Amhran Nua

Interesting post on the ability to pay and losing jobs from another forum:

This thread depresses me because I know that it is true. I own a small business, it's probably one of the nations smallest right now as it only employs me and for how much longer I don't know.

Over the years I built up a large fund to cover me in case of illness, in the event that I wanted a career break or a slowdown in the economy.

I've been using that money rather sparingly since January and now it is starting to run out.

Since Xmas I have been paying myself a few hundred a month to cover the mortgage (it's a small mortgage) and using our family savings for day to day living.

I've been trying to save the business since the start of the year. I've brought a few quid through the door but it's not enough.

This time last year I employed 6 people - all of them were making good wages (in the region of €35,000 /€40,000 a year - they were producing the results and they were being properly rewarded).

Now it's just me.

I have a wife and kids. Every day is a battle, hoping that bills won;t come through the letter box, hoping that the kids don't get a letter home from school looking for money and stuff like that.

After 20 years of working and never claiming a penny I swallowed my pride last week and made an enquiry about Jobseekers Allowance. I knew that because I was a proprietary director of a company that I was entitled to very little - but I figured that even if it was 50 quid a week that it would go towards the weekly grocery shopping.

After jumping through hoops I was informed that I am entitled to seven euro a week. However a payment of that amount is under the minimum amount that they will pay out - so if I want that seven quid a week I must appeal the case. To do this I need up to date books from my accountant (which will cost a thousand euro).

So for creating employment in this country and paying my taxes for twenty years - I am now entitled to seven euro a week - but I can't have it.

When I heard that it was all I was entitled to I broke down. It killed me to have to do it and then to be told that I wasn't actually going to get anything just tipped me over the edge.

I was ashamed of myself and angry at the way things had worked out.

Then I was told to make sure that I kept up my PRSI payment to ensure that I received my pension when I hit 66.

That's over thorty years away. I can't see beyond this week never mind 2040.

My business is all but gone, I'm only still trading because I have nothing else to do - there are no jobs out there and I should know - I've being looking for 8 months.

As bad as I feel about all of that - how do you think I feel when I read that John O'Donoghue is taking the mick with expenses or when Brian Cowen tells us that we are living beyond our means.

I, my wife and our kids are living within our means at the moment - but only just and our means are very limited.

When the nestegg runs out what is going to happen to me and all the others.

I dread to think.

djpbarry

kippy wrote: »

How does one prepare for unemployment?

The most obvious answer I can give is save some money. Everyone should have, at the absolute minimum, a couple of months worth of wages stashed away in a savings account.

kippy wrote: »

The banks have no time for hardluck stories from people like Joe.

What does this mean exactly? The banks are out to get people? Because I don't accept that - it's not in their interest.

kippy wrote: »

People HAVE to shoulder some of the responsibility themselves especially in the case of reckless borrowing. But there are lots of people out there who haven't borrowed recklessly but who may have followed all the advice and commentary coming from economists, state and private institutions over the years and who now find themselves out of a job with a mortgage that was completely manageable to pay before hand....

I accept that there are always going to be exceptional cases. Sometimes people end up in difficult circumstances through no fault of their own. It’s obviously impossible to completely eliminate risk, but a little prudent planning can still help to minimise it. But generally speaking, this country is where it is due to utterly reckless financial planning, from the bottom up. Granted, the global recession was beyond our control, but we could have gotten ourselves into a much better position to weather the storm.

Amhran Nua wrote: »

That responsibility starts and ends with their mortgage repayments however.

It sure does, but if everyone was paying their mortgages, we wouldn’t be here right now.

djpbarry

starbelgrade wrote: »

Saying "boo-f*cking-hoo" as a response to a question about somone who's in financial difficulty is not mocking?

I posted this on another thread, but I think it’s worth repeating here:

djpbarry wrote: »

You’ll have to excuse my less-than charitable attitude towards “these individuals” who willingly burdened themselves with absolutely ridiculous levels of debt that they obviously could not afford. I know of one couple (one is an accountant, the other an investment fund manager – go figure) who paid over €400,000 for a 3-bed house in Maynooth at the beginning of 2007, all the while scoffing at me (and others) as I continued to rent. I obviously questioned the wisdom of their decision and suggested that maybe they should consider renting a place together first (they were both living with their parents at the time), but they both insisted that rent was “dead money” and they would be better off buying a place as it represented an investment – the concept of a savings account or term deposit was obviously lost on them. They are undoubtedly up to their eyes in negative equity now and you’ll have to forgive me if I feel like pointing and laughing while chanting “I told you so”.

Now, granted, not everyone paid way over the odds for their homes and some may have considered the price they paid to be quite reasonable. But there is no such thing as a risk-free investment. If you buy a home, at any price, you have to accept the associated risks, such as the fact that there may well be a time in the future when you are unable to keep up your mortgage payments. Refusing to acknowledge such risks is very foolish.

kippy

djpbarry wrote: »

The most obvious answer I can give is save some money. Everyone should have, at the absolute minimum, a couple of months worth of wages stashed away in a savings account.
What does this mean exactly? The banks are out to get people? Because I don't accept that - it's not in their interest.
I accept that there are always going to be exceptional cases. Sometimes people end up in difficult circumstances through no fault of their own. It’s obviously impossible to completely eliminate risk, but a little prudent planning can still help to minimise it. But generally speaking, this country is where it is due to utterly reckless financial planning, from the bottom up. Granted, the global recession was beyond our control, but we could have gotten ourselves into a much better position to weather the storm.
It sure does, but if everyone was paying their mortgages, we wouldn’t be here right now.

People have savings, a lot have significant savings, but you are aware of how fast this can be eaten into without an income, mortgage, living, insurances, food etc etc.


The be honest the main reason the country is in the ****ter is not because of joe soap not being able to pay his motgage (although that will inevetibily happen and will cause more strife for our banking institutions). The main reason for NAMA is because of all these gambling banks and developers who paid way over the odds for property and didnt get out in time. There are obviously many reasons.

I've said this to friends before.
Debt is FINE, as long as you can manage it, afford to pay it back. However when you lose your main asset, your job, everything goes belly up, even with a prudent savings mindset.
While there were people who lived recklessly, the vast majority did not, yet still end up paying for others mistakes.

Count Dooku

me@ucd wrote: »

the profoundly dirty secret is that the banks cant be allowed to fail. Banking = Civilisation (or so the powers that be would lead us to believe)

If banks will fail, country can lose up to 10% of GDP, because economy will paralysed for one-two months.
Looks how it happened in Russia

The same would happen here, if government would allow to banks fail. Of coarse, it happened anyway and GDP will be down 10% by end of this year and Ireland lost good chance for recovery, but nobody is personally responsible for this

goingpostal

PCPhoto wrote: »

(I dont know what I'm rambling on about its after 2am...hardly a time for political/economic debate or discussion....im off to sleep)

Loved that last sentence. Sounds like me at my finest moments.

starbelgrade

djpbarry wrote: »

I posted this on another thread, but I think it’s worth repeating here:
Now, granted, not everyone paid way over the odds for their homes and some may have considered the price they paid to be quite reasonable. But there is no such thing as a risk-free investment. If you buy a home, at any price, you have to accept the associated risks, such as the fact that there may well be a time in the future when you are unable to keep up your mortgage payments. Refusing to acknowledge such risks is very foolish.

Blah - we know that. Everyone knows that.

But, what exactly is you point, beyond laughing at the "fools" & adding more smug to your smugness?

Idbatterim

but dose the fall from €18 to .20c not show madness and a total lack of reality? its like everything here, one extreme to the other, the bank probably sure as hell werent worth €18 a share, the same way that there sure as hell werent worth as little as €.20 a share. God I dont know why I didnt buy share at the low price, it was a win win! Realistically the government were always going to look after their own and bail out the fat cats!

Idbatterim

surely the best aspect of the collapse in home prices, share prices etc is that this will hopefully never be repeated again to the same level? i.e every average joe moron buying propperty, shares etc, creating one massive bubble again! where everyone is buying, because of the fear that they will pay more tomorrow?

djpbarry

kippy wrote: »

The main reason for NAMA is because of all these gambling banks and developers who paid way over the odds for property and didnt get out in time.

None of which would have happened if people were not prepared to pay obscene amounts of money on their property obsession.

kippy wrote: »

While there were people who lived recklessly, the vast majority did not...

I wouldn’t be so sure about that – I suspect that the people in this country who were living way beyond their means constitute more than just a small minority.

starbelgrade wrote: »

Blah - we know that. Everyone knows that.

If everyone knows that then why is this country up the proverbial creek? Face it – there exists a very large number of people in this country who made profoundly stupid decisions to buy badly built properties in badly planned communities at astronomical prices that they couldn’t really afford. We all know at least one. I just cannot buy into this notion that our economic implosion is all the fault of the banks, developers and Fianna Fáil. Sure, they were culpable, but they couldn’t have done what they did without the participation of the electorate.

starbelgrade

djpbarry wrote: »

I just cannot buy into this notion that our economic implosion is all the fault of the banks, developers and Fianna Fáil. Sure, they were culpable, but they couldn’t have done what they did without the participation of the electorate.

I agree with you entirely on this point, but what p*sses me off completely, is that while the banks are being sorted out with OUR cash, by the politicians who colluded with them, and developers, to create a bubble which Joe Soap fell in love with, Joe Soap is left up the preverbial swanny, whilst the politicians & bankers keep their jobs & the developers just cut their losses & file for bankrupcy.

Yes, we are all part of the downfall, but we the taxpayers are the only ones who have to pay the price for it.

And there are very few who have the luxury of "boo-hooing" those who are suffering because of it.

And there are a LOT of people who are suffering. To scoff at this, is to me, a disgusting standpoint.

SkepticOne

djpbarry wrote: »

Boo-****ing-hoo. Joe Soap shouldn’t have borrowed more money than he could afford to repay. It takes two to tango.

I would have some sympathy for this view if it were not the case that bankers who failed to run their businesses correctly are now coming cap in hand to the same Joe Soaps for handouts.

Hobo Sapiens

NAMA is theft on the largest scale ever seen in this country. Simple as.

Stop NAMA - vote No

Mena

Hobo Sapiens wrote: »

NAMA is theft on the largest scale ever seen in this country. Simple as.

Stop NAMA - vote No

I think you're a little confused. It's Lisbon II you're voting on, not NAMA. May be handy to know that come October

Hobo Sapiens

Mena wrote: »

I think you're a little confused. It's Lisbon II you're voting on, not NAMA. May be handy to know that come October

Yeah, thanks for pointing out the obvious.

I already voted No last year - why am I asked to vote again? It's unfair, and bordering on fascism.

I'm voting No to Lisbon because it's precisely the same treaty that was put before us last year. The treaty is a threat to democracy.

Mena

Hobo Sapiens wrote: »

Yeah, thanks for pointing out the obvious.

I already voted No last year - why am I asked to vote again? It's unfair, and bordering on fascism.

I'm voting No to Lisbon because it's precisely the same treaty that was put before us last year. The treaty is a threat to democracy.

Before spouting rubbish about threats to democracy and fascism, perhaps step outside of your mollycoddled European existence and realise what a lack of democracy and true fascism are.

As for being unfair and undemocratic, the (rather silly) issues most people had originally were addressed so, in true democratic fashion, the question is being posed again.