Why should bondholders pay?

Welease

We've heard numerous times how it's scandalous they are not being forced to take the hit...

Lets look at what happened..

We decided to have a property bubble
We decided to pay way over the odds for property and land
We decided to bump wages and costs across the board
Our banks decided to throw caution to the wind with regards to prudent lending
Our government/regulators decided to turn a blind eye to the banks dealing
We voted the government back in based on bubble populist policies
We etc etc etc etc etc...

Why shouldn't we pick up the tab for our rediculous mistakes, considering we still need to go back cap in hand asking for more?

CoalBucket

They decided to make an investment. If you make an investment and the company you invest goes to sh*t then so should your investment and you should lose.

Justin Collery

becuase 'they' decided to take a punt and lend to us, and make some money while they were at it.

Would you lend €1,000 to someone you did not trust. Lets say €10,000. You'd check them out pretty carefully first, make sure you would get your money back. Now say you lent to an eegit and didn't get the money back. Who's really the eegit?

Welease

But isn't that the typical Irish attiude? It's always someone else's fault...

So many calls on here for someone to take ownership of the problem.. why has noone been taken to court? why did Neary get paid off ? Why can Fingers walk away?
But we seem to think we should be able to walk away?

If you want accountability it goes top to bottom.. we borrowed, shouldn't we pay it back?

evercloserunion

Burning the bondholders is picking up the tab for our mistakes, because it would be reflected in future interest rates. It's just picking up the tab tomorrow, rather than today. And I suppose the argument is that we can afford it tomorrow, but not today.

There's also of course the fact that all investments carry risk, and some would view letting the bondholders off the hook as guaranteeing return while removing risk.

For the record, I don't support burning the bondholders, but these are the arguments put forward.

ted1

i decided not to buy as i saw the bubble burst. I'm mortgage free have been living in an area i want too. Paying less than i would on a mortgage and still saving as i'm not in negative equity. i was told i was mad for not getting on the property ladder by friends who work in property and banks. Why should i have to pay for their mistakes? Screw the bail outs make people responsible for their actions. If people can't repay their loans then jet the banks collect their collateral if they can't recoup well then they should have been more care ful. If my business was losing money it would close and i.'d be on the scratcher. Why can't they be the same?

20Cent

Welease wrote: »

But isn't that the typical Irish attiude? It's always someone else's fault...

So many calls on here for someone to take ownership of the problem.. why has noone been taken to court? why did Neary get paid off ? Why can Fingers walk away?
But we seem to think we should be able to walk away?

If you want accountability it goes top to bottom.. we borrowed, shouldn't we pay it back?

We are paying it back.
Bondholders on the other hand seem to make bad investments and we pay that back too.

View

Bondholders didn't "make an investment" in Anglo-Irish. They loaned it money. Naturally, they'd like the money they lent repaid (with interest).

Luckily for them, we seem to be keep doing so...

20Cent

View wrote: »

Bondholders didn't "make an investment" in Anglo-Irish. They loaned it money. Naturally, they'd like the money they lent repaid (with interest).

Luckily for them, we seem to be keep doing so...

Isn't loaning money expecting interest an investment?

Welease

evercloserunion wrote: »

Burning the bondholders is picking up the tab for our mistakes, because it would be reflected in future interest rates. It's just picking up the tab tomorrow, rather than today. And I suppose the argument is that we can afford it tomorrow, but not today.

There's also of course the fact that all investments carry risk, and some would view letting the bondholders off the hook as guaranteeing return while removing risk.

For the record, I don't support burning the bondholders, but these are the arguments put forward.

Agreed, but we seem to want to remove the risk from the transactions we made..

It could be argued that the bondholder took what normally be considered somewhat safe risks given the information we provided.. WE were the ones who cooked the books, and transferred loans in and out to make the books look balanced (and by We, I obviously mean institutions in the country and the lax regulations which allowed/encouraged it)

WE decided to do all the above...

Liam Byrne

Welease wrote: »

We've heard numerous times how it's scandalous they are not being forced to take the hit...

Lets look at what happened..

We decided to have a property bubble
We decided to pay way over the odds for property and land
We decided to bump wages and costs across the board
Our banks decided to throw caution to the wind with regards to prudent lending
Our government/regulators decided to turn a blind eye to the banks dealing
We voted the government back in based on bubble populist policies
We etc etc etc etc etc...

Why shouldn't we pick up the tab for our rediculous mistakes, considering we still need to go back cap in hand asking for more?

I can honestly say that I am not part of any of the groups that you describe as "we" above.

And the bondholders invested in a company that did dodgy deals; who in their right mind invests in a company like that ?

Of course, they may have known that that's the way it was run, and decided it was worth it because the bigger risk made for bigger profits.

Their gamble did not pay off. And yet they get off scot-free.

P. Breathnach

How can you make a legally-defensible distinction between bonds and other funds held in banks?

Things like your elderly aunt's life savings, balances held by credit unions, sinking funds of property management companies, credit balances of SMEs, your month's pay that has just been transferred to your account, the money you have borrowed to pay for an apartment that is temporarily held in your solicitor's client account, and so on.

Liam Byrne

Welease wrote: »

WE were the ones who cooked the books, and transferred loans in and out to make the books look balanced (and by We, I obviously mean institutions in the country and the lax regulations which allowed/encouraged it)

WE decided to do all the above...

Unless you are part of Anglo Irish Bank's management team, the word "WE" doesn't fit into that post either.

hinault

I take the view that the bondholders should pay something.

The bondholders took the decision to make an investment - an investment in the management team and the management policies of Anglo.

The management of Anglo have been found to be derelict.
The State is now the new management team - so new rules should be applied.


It's like me going down to Paddy Powers (Anglo) and placing a bet on a horse.
I invest my money with Paddy Power (Anglo) and if the horse wins Paddy Power (anglo) pay me my bet and the odds on that bet.

If my horse finishes last, i don't expect Paddy Power to refund me my bet.

In the Anglo instance, i am not suggesting that we don't pay the bondholder anything - we should pay a proportion of what they're owed.
But only a proportion.

Which brings me back to the guarantee.
By guaranteeing all forms of deposits at Anglo, the MoF made sure that all Paddy Power bets were to be refunded regardless of the race result.

Welease

jcollery wrote: »

becuase 'they' decided to take a punt and lend to us, and make some money while they were at it.

Would you lend €1,000 to someone you did not trust. Lets say €10,000. You'd check them out pretty carefully first, make sure you would get your money back. Now say you lent to an eegit and didn't get the money back. Who's really the eegit?

If I was in the money markets, and expecting institutions to be properly regulated, and their books appeared fine, then yes I would lend..

If however, we allowed banks to ship money in and out to essentially beef up their accounts, and all that money was being blown domestically (or the bulk of it).. then why shouldn't we take the big hit?.. after all... it wasn't the bondholders or anyone outside Ireland that caused this mess.. it was us and us alone...

Welease

Liam Byrne wrote: »

Unless you are part of Anglo Irish Bank's management team, the word "WE" doesn't fit into that post either.

As I said, be We I mean (loosely) the Irish public.. People seem to have an issue with the foreign bond holders being repayed the money they loaned Ireland (although I for one believe there is a lot more Irish money tied up in Anglo etc than people wanted to believe.. Irish pension equity funds for example).

Welease

hinault wrote: »

I take the view that the bondholders should pay something.

The bondholders took the decision to make an investment - an investment in the management team and the management policies of Anglo.

The management of Anglo have been found to be derelict.
The State is now the new management team - so new rules should be applied.


It's like me going down to Paddy Powers (Anglo) and placing a bet on a horse.
I invest my money with Paddy Power (Anglo) and if the horse wins Paddy Power (anglo) pay me my bet and the odds on that bet.

If my horse finishes last, i don't expect Paddy Power to refund me my bet.

In the Anglo instance, i am not suggesting that we don't pay the bondholder anything - we should pay a proportion of what they're owed.
But only a proportion.

Which brings me back to the guarantee.
By guaranteeing all forms of deposits at Anglo, the MoF made sure that all Paddy Power bets were to be refunded regardless of the race result.

If you found that Paddy Power had fixed the race would you be so willing to lose your deposit? and that's essentially what happened.. due to chronic failures of governance and regulation in Ireland (plus incredible risk taking) we allowed the banks to completely misrepresent the situations... and that contined long after the crash (as per the NAMA debacle) where we were continually lied to about the solvency of the banks..

Liam Byrne

Welease wrote: »

we allowed the banks to completely misrepresent the situations

Do "we allow" drugs gangs to sell drugs and murder people too ?

You're allocating blame where it doesn't belong.

"We" didn't even vote for those who were supposed to be ensuring this was done.

If you want to look at where the buck stops, check with a certain Mr Ahern who appointed someone as Financial Regulator not based on qualifications or experience, but "because he was his friend".

Welease

Liam Byrne wrote: »

Do "we allow" drugs gangs to sell drugs and murder people too ?

You're allocating blame where it doesn't belong.

"We" didn't even vote for those who were supposed to be ensuring this was done.

If you want to look at where the buck stops, check with a certain Mr Ahern who appointed someone as Financial Regulator not based on qualifications or experience, but "because he was his friend".

I'm not allocating blame.. Others are trying to lay blame elsewhere, I am merely asking why we who voted in the government, who allowed this regulation, we created this property boom, who drove wages up, who built and bought property far in excess of any reasonable value, who cooked our banks books.. should not pay back the money we borrowed in order to do so.

Did we (loosely) not give those people the power to appoint regulators etc?

I'm not talking about individual blame here... but we as a country borrowed and wasted the money we requested in spectacular fashion... Plenty of people are asking for responsibility to be taken, but yet we don't seem to want to take the responsibility to paying back the money we decided to borrow..

Welease

And I should clarify before the usual round of I am a member of NAMA, FF, Anglo, Nazi Youth starts..

I left Ireland in '88 and returned in '07 (from recession to recession.. no Celtic Tiger for me).. I have never voted FF, I have never worked for a bank.. I don't work for NAMA or in any property type ventures, and I am definately not an member of the Nazi Youth..

I am just asking why the collective WE seem to be clambouring for people to take responsibility, but so few of US actually seem to take responsibility for our choice of government, who we vote in as TD's, how we allow them to government and regulate, how they allow their "galway tent" friends to work, the properties we bought, the wage increases we accepted, the loans we took on etc etc etc..

But at all costs the bond holders must be made to pay for their gamble...
(while we ask for more)... We gambled far more.. and far bigger..

Just doesn't add up to me.. /shrug

hinault

Welease wrote: »

If you found that Paddy Power had fixed the race would you be so willing to lose your deposit? and that's essentially what happened.. due to chronic failures of governance and regulation in Ireland (plus incredible risk taking) we allowed the banks to completely misrepresent the situations... and that contined long after the crash (as per the NAMA debacle) where we were continually lied to about the solvency of the banks..

If Paddy Power fixed a race the Jockey Club (regulators) would be all over them in a flash.

But this denies the principle.
I'm risking my capital (subordinated debt holder) by giving it to the bookie (Paddy Power) to make a return.
If the horse finishes last, I get nothing.

But it's worse than this in reality.
Not only do I place a bet with Paddy Power (Anglo), Paddy Power goes bellyup and Boyle Sports (the taxpayer) takes over Paddy Power (Anglo) and pays out my bet to me even though the horse finished last!

Welease

hinault wrote: »

If Paddy Power fixed a race the Jockey Club (regulators) would be all over them in a flash.

But this denies the principle.
I'm risking my capital (subordinated debt holder) by giving it to the bookie (Paddy Power) to make a return.
If the horse finishes last, I get nothing.

But it's worse than this in reality.
Not only do I place a bet with Paddy Power (Anglo), Paddy Power goes bellyup and Boyle Sports (the taxpayer) takes over Paddy Power (Anglo) and pays out my bet to me even though the horse finished last!

Thats the point though.. Our jockey club were not all over them. They ignored the race fixing..

viclemronny

Listen lads, I stuck a 50 on spurs to take the league this season. If this doesn't pan out for me, could we all have a bit of a whip 'round and cover the bet?

Interest rates are charged on money lent for several reasons. Firstly and most obviously, part of the interest payments cover the inflation that occurs between when the lender lends the money and the borrower repays it.

Another part of the interest rate is considered to compensate for default risk. This is why for example, Tom the prudent businessman pays lower interest rates than Jim the unlucky gambler. It's less likely that Tom'll default so he pays lower interest rates.

Now, if the lenders (bondholders in this case) have taken correct account of all the information presented, then they should be alright, as interest from preforming loans will cover the cost. Remember, the risk premium is built in.

If they did not take account of all of the information correctly, then they will be punished for careless/sloppy/imprudent/risky work.

If they were given the wrong information, they can either blame their own people who provided it or they can blame the outside sources by either taking appropriate legal action if they believe that a fraud has been perpetrated or by refusing to give them business in the future if they believe incompetence was at fault.

The important thing however, is that at no point did they sign a document saying that for no extra charge, the Irish government would use taxpayers money to compensate their stupidity/laziness/poor luck/or being the victims of fraud. See first sentence.

waitingforBB

The thing is that bondholders are paid a premium for 'risk'
The institution sells bonds which are essentially IOUs to a market who, taking into account the risk premium decide whether or not to invest.
Those institutions buying Irish gov bonds at the moment are being paid a hefty coupon because there is a percieved high risk of default. Those who bought bonds in Anglo took a punt, got a premium for their investment (subordinate bondholders more so).
They speculated so shouldnt be immune to losses. its crazy if they are immune as essentially they receieved a premium above the risk free rate, but are they supposed to get the risk free return? crazy if they do

hinault

waitingforBB wrote: »

The thing is that bondholders are paid a premium for 'risk'
The institution sells bonds which are essentially IOUs to a market who, taking into account the risk premium decide whether or not to invest.
Those institutions buying Irish gov bonds at the moment are being paid a hefty coupon because there is a percieved high risk of default. Those who bought bonds in Anglo took a punt, got a premium for their investment (subordinate bondholders more so).
They speculated so shouldnt be immune to losses. its crazy if they are immune as essentially they receieved a premium above the risk free rate, but are they supposed to get the risk free return? crazy if they do

No Lenihan has told us that he's paying our money out regardless of the race result.

We're the only bookie in the world that will pay out whether the horse wins, finishes last or doesn't run.

Mr Benevolent

This is nuts. The concept of us paying for someone else's bad investment is ludicrous.

Wait a second...

waitingforBB

Not so sure now.
Seems to be an appetite to share some pain with subordinate bondholders (which is absolutely correct). Senior bondholders will remain untouched.

If there is no risk to subordinates, why take the lesser coupon that the seniors take for less (percieved) risk?

If the bondholders dont get burned to some level, then ALL bonds should be issues on a risk free coupon rate as if the gov are guaranteeing (indirectly) all bondholders, then there is zero risk to investors.

Thats what Brian was talking about, but now reality is hitting and those that took the highest risk look like they will get some form of haircut

SkepticOne

Welease wrote: »

I'm not allocating blame.. Others are trying to lay blame elsewhere, I am merely asking why we who voted in the government, who allowed this regulation, we created this property boom, who drove wages up, who built and bought property far in excess of any reasonable value, who cooked our banks books.. should not pay back the money we borrowed in order to do so.

Did we (loosely) not give those people the power to appoint regulators etc?

I'm not talking about individual blame here... but we as a country borrowed and wasted the money we requested in spectacular fashion... Plenty of people are asking for responsibility to be taken, but yet we don't seem to want to take the responsibility to paying back the money we decided to borrow..

I think the key issue is that a private company is a private company. If you lend to a private company you must weigh up all the risks involved in that decisions. If there's a dodgy government in power, the you to take that into consideration. Legally there is no obligation for a government to compensate lenders if the company they lent to goes bust.

SkepticOne

evercloserunion wrote: »

Burning the bondholders is picking up the tab for our mistakes, because it would be reflected in future interest rates. It's just picking up the tab tomorrow, rather than today. And I suppose the argument is that we can afford it tomorrow, but not today.
[...]For the record, I don't support burning the bondholders, but these are the arguments put forward.

I don't think anyone opposed to the bailouts has ever used the notion that it would cost the country more tomorrow if we did not bail out the bond holders. Can you supply some examples?

Seems to be a view more of those who support the bailouts than those opposed to them. It never really made much sense to begin with, but now we are seeing how wrong it really was.

imme

OP,you seem to very fond of speaking for others with your we
Please dont speakfor me. Thanks;)

Bondholders are investors, every investment carries a degree of risk.

Austerity

Does the OP really think it's fair to have a system of private profits and socialized losses?

Welease

Austerity wrote: »

Does the OP really think it's fair to have a system of private profits and socialized losses?

No of course I don't But I also don't think it's quiet that simple.. The boom effected a lot of people here, not just bondholders. Wages went up, House prices went through the roof etc etc etc. Lots of people were smart and made money, lots of people made nothing, and lots of people lost money... that's capitalism for ya.. In terms of the large losses we made, when you voluntarily grow an economy to that size and want to play with the big boys, then you stand to lose a lot.. and we did.. It wasn't just the private bondholders who played the game.. They lend Ireland money to do what we wanted to do with it...

Why do we now believe we should be able to just walk away and say thats capitalism for ya.. and if we did, would the Irish populace learn a single thing from this disaster?

I am sometimes of the belief that until this country gets a sharp shock for the decisions it made, and continues to make, then we won't advance in inch forward past parish pump politics.. It used to be the Brits that held us back, now its the bondholders apparently..somehow we always seem to be
avoiding the actual reality.. we make the dumb decisions and we need to man up and deal with them..

And I use the WE (;)) in terms of democratic Ireland... We, the people got the system and governance we requested. I didn't vote or ask for any of this, and I'm know plenty of people didn't also, but time doesn't permit me to list individuals.. so humour me

Welease

SkepticOne wrote: »

I think the key issue is that a private company is a private company. If you lend to a private company you must weigh up all the risks involved in that decisions. If there's a dodgy government in power, the you to take that into consideration. Legally there is no obligation for a government to compensate lenders if the company they lent to goes bust.

Agreed legally there isn't.. I'm not disputing that.. (acutally I'm not disputing anything, I am merely posing a question into the motivations for the apportioning of responsibility into certain areas, and if the Irish as a race have developed to the point where they are capable and ready to play at the levels that we seem to want to play)

It's more of a generic question about the mind set of the Irish... People (is that better than saying WE? ) want to walk away from the problems they created and pass the buck to the bondholders. If we do, then do we learn anything from this?

It wasn't so long ago the major topic of conversation in this country was how much people's houses had gone up in price, how new their car was etc.. The vast majority of people played the game, and as you say need to understand the risks involved and take them into considerations. FF were voted back in to continue this gravy train. It seems that when reality bites again, people don't want to hold ourselves accountable to the same high moral standard that we demand of the bond holders.

Austerity

Why should people who never contributed to speculation be forced to bail out bondholders who gave risky loans?

When you lend money to someone there is always a risk you don't get that money back. If you don't get that money back you can't expect a third party to part with their money to compensate you for the loss.

Welease

Austerity wrote: »

Why should people who never contributed to speculation be forced to bail out bondholders who gave risky loans?

When you lend money to someone there is always a risk you don't get that money back. If you don't get that money back you can't expect a third party to part with their money to compensate you for the loss.

Because the people of Ireland did (very heavily) get involved in speculation.. If we hadn't we wouldn't have borrowed such vast sums to continue the property boom.. Sites in Dublin would not have been worth hundreds of millions had people not been willing to speculate on 500K appartments etc.
You average 3 bed semi in D13 would not have risen in value from 100K to 500K in such a short space. Whether people admit it or not, wasn't a large part of our economy based on property speculation (by us)?

jmayo

Welease wrote: »

We've heard numerous times how it's scandalous they are not being forced to take the hit...

Lets look at what happened..

We decided to have a property bubble
We decided to pay way over the odds for property and land
We decided to bump wages and costs across the board
Our banks decided to throw caution to the wind with regards to prudent lending
Our government/regulators decided to turn a blind eye to the banks dealing
We voted the government back in based on bubble populist policies
We etc etc etc etc etc...

Why shouldn't we pick up the tab for our rediculous mistakes, considering we still need to go back cap in hand asking for more?

This really pis*** me off because it is another get out to be used by the ones that actually did the sh**.

As I said elsewhere normal people, be they public or private, usually got on with things.
Yes a lot of them can be accused of borrowing too much and they are responsible for it.
Some just wanted a home and were sh** scred that they were going to be totally priced out of the market.
They believed the hype.

Some others wanted to make quick money and the property gravy train seemed like a win win.
These ones also believed in the hype.
These are stuck with their debts as well even though every now and then they are flying a kite for their own bailout.

But for the most part these people are paying back their debts.

Problem is they, and us that did not over borrow or believe in the hype, are also being told we will have to pay for the mistakes, the sheer incompetence, the greed, the arrogance, the ego of the ones at the top in private sector banks, very large private sector developers and builders (mcnamara, treasury, paddy kelly, etc ), public sector bodies (DDDA, Fás), public sector regulatory authorities (CB, Dept of Finance, IFSRA) and lastly the Government.


Remeber who set policies, who controlled finance, budgets, tax regimes ?
And yes you can argue people voted for them.
I DID NOT and I bet there are a lot more people around here who were not in the 40% odd that did.
If you were then I think you can pay my share or else I am off to chase halluejordan for it.


As Tonto was supposed to have said to the loan ranger "less of WE paleface"

Austerity

Welease wrote: »

Because the people of Ireland did (very heavily) get involved in speculation.. If we hadn't we wouldn't have borrowed such vast sums to continue the property boom.. Sites in Dublin would not have been worth hundreds of millions had people not been willing to speculate on 500K appartments etc.
You average 3 bed semi in D13 would not have risen in value from 100K to 500K in such a short space. Whether people admit it or not, wasn't a large part of our economy based on property speculation (by us)?

And because of this people who were saving there money, didn't borrow anything should be forced to bail out the bondholders.

You are arguing that we should take money from people who acted responsibly and give it to those of acted irresponsibly. Many people did not take part in this whole Celtic Tiger thing.

johnnyskeleton

Welease wrote: »

But isn't that the typical Irish attiude? It's always someone else's fault...

No, letting the investors lose out is a typical capitalist attitude. Running to the government for them to pick up the tab in the belief that a) the government is a bottomless pool of free money and b) god wouldn't we be mortified if one of our banks failed - sure we are the greatest nation in the world - is a typical Irish attitude.

Welease

jmayo wrote: »

This really pis*** me off because it is another get out to be used by the ones that actually did the sh**.

As I said elsewhere normal people, be they public or private, usually got on with things.
Yes a lot of them can be accused of borrowing too much and they are responsible for it.
Some just wanted a home and were sh** scred that they were going to be totally priced out of the market.
They believed the hype.

Some others wanted to make quick money and the property gravy train seemed like a win win.
These ones also believed in the hype.
These are stuck with their debts as well even though every now and then they are flying a kite for their own bailout.

But for the most part these people are paying back their debts.

Problem is they, and us that did not over borrow or believe in the hype, are also being told we will have to pay for the mistakes, the sheer incompetence, the greed, the arrogance, the ego of the ones at the top in private sector banks, very large private sector developers and builders (mcnamara, treasury, paddy kelly, etc ), public sector bodies (DDDA, Fás), public sector regulatory authorities (CB, Dept of Finance, IFSRA) and lastly the Government.


Remeber who set policies, who controlled finance, budgets, tax regimes ?
And yes you can argue people voted for them.
I DID NOT and I bet there are a lot more people around here who were not in the 40% odd that did.
If you were then I think you can pay my share or else I am off to chase halluejordan for it.


As Tonto was supposed to have said to the loan ranger "less of WE paleface"

But thats not how a demoncracy works.. it's irrelevant if you the individual votes for whoever.. The Irish people en masse (We if you will lol ) chose what we have.. You cannot have a different personal outcome in this democracy unless you choose to up sticks and move to a different country.

Look at the long (bold list) of problems you mentioned. each and everyone one of those is Irish.. The Irish caused the problems from start to finish.. isn't it time we stood up to the plate and realised that instead of assuming the bondholders should take the hit for our stupidity, that we instead should take the hit..

We bailed out the banks 20 years ago, and learnt nothing.. We have to bail them out again now.. And we will continue to do so until the people of this country wake up and realise that we need to take control of how we run this plot of land.. I am just suggesting that dealing with our own mess might be the first step in people waking up.. asking the bondholders to deal with our mess just ensures we will be back here in 20 years time, and the stakes just keep getting bigger and bigger.

Austerity

You don't have to bail out the banks.
Just say FU to them.
Let the market work it out.

johnnyskeleton

Welease wrote: »

But thats not how a demoncracy works.. it's irrelevant if you the individual votes for whoever.. The Irish people en masse (We if you will lol ) chose what we have.. You cannot have a different personal outcome in this democracy unless you choose to up sticks and move to a different country.

Look at the long (bold list) of problems you mentioned. each and everyone one of those is Irish.. The Irish caused the problems from start to finish.. isn't it time we stood up to the plate and realised that instead of assuming the bondholders should take the hit for our stupidity, that we instead should take the hit..

We bailed out the banks 20 years ago, and learnt nothing.. We have to bail them out again now.. And we will continue to do so until the people of this country wake up and realise that we need to take control of how we run this plot of land.. I am just suggesting that dealing with our own mess might be the first step in people waking up.. asking the bondholders to deal with our mess just ensures we will be back here in 20 years time, and the stakes just keep getting bigger and bigger.

But it's not how contract law works, and I think you are conflating the two.

If I sign a contract for a debt, I am the only person responsible for the repayment of that debt. Unless someone gives a personal guranatee, but they would only do that where they have a stake in it e.g. personal guarantee for a company I own.

But no, the government has given an ex post facto guarantee to all Irish banks, completely chaing the rules of contract law and commerce.

Democracy is about the majority making a decision for the entire populace on an issue which must have an outcome that affects us all either way. For example, whether abortion is legal or illegal is something that, in a democracy, the majority will decide for the minority.

But the same is not true of finances in a democracy, making everyone pay for a majority of people is just communism.

Welease

Austerity wrote: »

And because of this people who were saving there money, didn't borrow anything should be forced to bail out the bondholders.

You are arguing that we should take money from people who acted responsibly and give it to those of acted irresponsibly. Many people did not take part in this whole Celtic Tiger thing.

True they didn't.. but thats not how it works.. I don't and have never wasted a single cent of money in FAS or the HSE, but I still have to pay for it..

When a country makes decisions (via it's government), shouldn't the country be held responsible?

Welease

johnnyskeleton wrote: »

But it's not how contract law works, and I think you are conflating the two.

If I sign a contract for a debt, I am the only person responsible for the repayment of that debt. Unless someone gives a personal guranatee, but they would only do that where they have a stake in it e.g. personal guarantee for a company I own.

But no, the government has given an ex post facto guarantee to all Irish banks, completely chaing the rules of contract law and commerce.

Democracy is about the majority making a decision for the entire populace on an issue which must have an outcome that affects us all either way. For example, whether abortion is legal or illegal is something that, in a democracy, the majority will decide for the minority.

But the same is not true of finances in a democracy, making everyone pay for a majority of people is just communism.

But the majority DID make a decision.. they decided to purchase overpriced properties, they decided to reelect a government on populist boom supporting policies, and that government decided to continue to fuel the fire with tax incentives and low touch regulation..

Welease

ok let me try restating the question.. It's just an academic question, so don't get stressed out about it..

Someony has subsequently posted a thread which asked "Will this mess happen again".. And (although small number of responses so far) then general consenus is.. No, we haven't learnt a single thing..

My thinking is somewhat along similar lines..

People are aware that they have to pay for the mess.. (how can they not be).. but people are (in very general terms) also trying to move the blame around and will accept little personal responsibility for this mess (government, PS, banks, developers, planners).. This culminates in trying to get the bondholders to take the hit (which they should!!!! I'm not trying to state otherwise).. I am merely asking are we hiding behind the markets and legallity to make the fact once again that the Irish seem to have an issue with accepting that this mess and this mess alone was caused by us (and of course not individually)..

Does that make more sense? (think in terms of the Irish phycology rather than pure economic terms if that helps)..

We continually hear about not everyone made money or bought houses.. but huge amounts did.. In fact I remember reading in 2007 (when I was coming back) that 35% (iirc) of all mortgages in Ireland were second mortgages..
We continually hear about I didnt vote for them.. but in our democracy enough of a majority DID vote for FF (several times)..

Liam Byrne

Welease wrote: »

......that government decided to continue to fuel the fire with tax incentives and low touch regulation..

I know it's only semantics, but this thread could do with a bit of humour.

"Soft touch regulation" I can understand, but the above phrase made me visualise "dropping the hand", which doesn't seem to be all that inaccurate!

Welease

Liam Byrne wrote: »

I know it's only semantics, but this thread could do with a bit of humour.

"Soft touch regulation" I can understand, but the above phrase made me visualise "dropping the hand", which doesn't seem to be all that inaccurate!

I could make a crude joke.. but I'll refrain

P. Breathnach

Austerity wrote: »

Why should people who never contributed to speculation be forced to bail out bondholders who gave risky loans? ...

Are you at all interested in the distinction between senior bonds and subordinated bonds? Or how you might legally distinguish between a senior bond and my life savings, wiping out one but not the other?

Or have you found a button that makes a satisfying noise when you press it, so you keep on pressing?

marco_polo

Genuine question to those who favour the defaulting option, lets say that we did, I just cannot see where on earth could we go to keep borrowing the 15-20 odd billion to cover our yearly deficit to keep the country running?

To preempt attack, I am asking as an extremely p*ssed off individual who has personally lived within my means through the boom, never voted FF and will also be paying for this mistakes for a long time to come.

Austerity

marco_polo wrote: »

Genuine question to those who favour the defaulting option, lets say that we did, I just cannot see where on earth could we go to keep borrowing the 15-20 odd billion to cover our yearly deficit to keep the country running?

To preempt attack, I am asking as an extremely p*ssed off individual who has personally lived within my means through the boom, never voted FF and will also be paying for this mistakes for a long time to come.

You don't borrow the money, instead you make a budget that you can afford.

Welease

Austerity wrote: »

You don't borrow the money, instead you make a budget that you can afford.

But thats not the question

But lets run with that for a second anyway ... So in order to do this? We need to make cuts left right and centre.. agreed (20b or so)? Will the people of Ireland stand up and accept that? Will they understand that if you can't borrow from the people you just burnt?

No they won't.. Look at the posts in here.. and even in this thread.. "I" didn't cause it why should "I" take the hit? The PS caused it.. The PrS caused it etc. People marching becuase of HSE cuts..

There are very few threads with people saying.. "look.. by and large the Irish fked up big style.. it's time to deal with the problem, pay our debts, learn from the situation and move on"...

It still goes back to my initial question, why won't the Irish accept they caused the problem, and is the bondholder debate (legalities and economics aside.. which obviously in the real world you can't ignore, i get that ) just another scapegoat for our own inability to deal with out own shortcomings?

murphaph

jcollery wrote: »

Would you lend €1,000 to someone you did not trust.

But they did trust us. They trusted us to be mature and grown up about finances. We were not.