Why will nobody accept any responsibility?

IrishButGerman

The Government despite having almost no public support and a tiny majority, who have being leading the country since the creation of this crisis, do not seem at all the consider themselves in any way responsible.

The banks continue to deceive the Government (although they must know it) about their problems. The responsible thing to do would be to disclose the true magnitude of their problems, so that the Government might finally accept it is not just a liquidity problem.

But above all else, the public (not in total) take absolutely zero responsibility when in reality a ton of blame falls on their shoulders. The talk of "predatory lending" for feck sake, you are not children, you are not prey, you are adults and you made BAD decisions, face up to it.
Some people here seem to live in a dream land, you can't take out loans (be it mortgages, car loans, higher purchase) in some cases in excess of ten times! TEN TIMES your salary and expect to not only keep those assets when you don't pay, but play the victim!

I fail to see any difference between (except in magnitude):
Banks borrowing tons of money to recklessly loan out.
Developers borrowing tons of money to recklessly spend.
The public borrowing tons of money to recklessly spend.

Average mortgage in 2008 is €259,215.
Approximately 70,000 mortgages in arrears in 2010.
Is none of this the result of bad choices, excessive risk taking? Or is it all the fault of the government and the banks, and these people are just victims?

who what when

IrishButGerman wrote: »

I fail to see any difference between (except in magnitude):
Banks borrowing tons of money to recklessly loan out.
Developers borrowing tons of money to recklessly spend.
The public borrowing tons of money to recklessly spend.

Agreed and ive been saying for a long time theres four EQUALLY guilty parties in all of this;
1- Government
2- Banks
3- Financial Regulator of the time
4- General Public

The general public seem to be totally unwilling to take any responsibility at all! This is strange considering there would be no banking bailout if there were no customers willing to mortgage themselves up to their collective neck!

Fianna Downfall

who what when wrote: »

Agreed and ive been saying for a long time theres four EQUALLY guilty parties in all of this;
1- Government
2- Banks
3- Financial Regulator of the time
4- General Public

The general public seem to be totally unwilling to take any responsibility at all! This is strange considering there would be no banking bailout if there were no customers willing to mortgage themselves up to their collective neck!

It's not so simple. A home is a neccessity. It's not like a fancy sports car or membership of a delux sports club.

Leiva

who what when wrote: »

Agreed and ive been saying for a long time theres four EQUALLY guilty parties in all of this;
1- Government
2- Banks
3- Financial Regulator of the time
4- General Public

The general public seem to be totally unwilling to take any responsibility at all! This is strange considering there would be no banking bailout if there were no customers willing to mortgage themselves up to their collective neck!

General Public do have to answer for somethings but very small factors .

The housing bubble inflated over an 8 to 10 year period ... What do you expect a countries population do do over this period ? Stay out of the housing market and not buy a home ? When your Govt is doing everything at their disposal to encourage you to buy ?
M.

IrishButGerman

Fianna Downfall wrote: »

It's not so simple. A home is a neccessity. It's not like a fancy sports car or membership of a delux sports club.

You may need a home, but it doesn't need to cost €259,000. If you have a home through loans in those amounts it is because you wanted it, not because you needed it.

SkepticOne

Where I disagree with you is that I think most people are taking responsibility.

I don't agree with all this talk about "predatory lending" and what have you. These are just things people say. The reality is that the vast majority of those who borrowed are for the most part paying off their borrowing, and if they can't, make great efforts to do what they can to pay it off.

My view is that, in situations such as these, the borrower and lender have equal responsibility since for a loan to occur consent of both parties must be present. But whereas the ordinary punter is living up to his side of the bargain, the lender is the one getting bailed out and these lenders aren't just in Ireland, but many are in foreign countries including Germany.

One of the annoying things about the narrative that is developing abroad is that it is simply a case of the Irish public living it up on borrowed money and now they are complaining about having to pay it back. That is a gross simplification since a lot of the problems facing the Irish state has been due to its ill-advised guaranteeing of debts by private companies within Ireland to investors abroad.

Far from taking too little responsibility, in this specific aspect we took too much responsibility in our effort to keep foreign risk-takers happy and we are now paying the price for it.

ricman

Well some people thought house values are going up, i want to live in area x , so they borrowed too much.Theres alot of couples where 1 partner has lost a job.WE had no proper regulation of the banks ,the government did nothing to stop prices going higher.The high paid civil servants ,bankers getting bonus,s , politicians with big pensions ,who had any incentive to say stop, this economy is heading for a crash?its evident we have a system run on cronyism ,corruption and greed , incompetence ,it needs reform.
WE HAD A GOLDEN CIRCLE , civil servants,bankers ,builders, politicians ,and social partners looking for higher wages where there was little merit in logical economic planning ,it was bound to end in disaster.
WE need proper a public service run in a well planned way on realistic wages,ie no 80 per cent pensions .
WE need a well regulated banking system with proper limits on lending and more government transparency ,eg there should be legal protection for
whistleblowers who see corruption or incompetence or waste of public money.
also as above there was too much ,too wide gaurantees in regard to private debt and bondholders which made the situation worse.
ANGLO bank should have been wound down and let the investors bondholders take the losses ,instead of pouring billions into a zombie bank.
i dont have much sympathy for someone who paid 3 or 400k for an apartment in dublin.

who what when

mixednuts wrote: »

General Public do have to answer for somethings but very small factors .

The housing bubble inflated over an 8 to 10 year period ... What do you expect a countries population do do over this period ? Stay out of the housing market and not buy a home ? When your Govt is doing everything at their disposal to encourage you to buy ?
M.

If you are able to afford a loan in the long term by all means apply for it. So many people took on massive mortgages with no ability to repay in the event of unforeseen circumstances!

IrishButGerman

who what when wrote: »

If you are able to afford a loan in the long term by all means apply for it. So many people took on massive mortgages with no ability to repay in the event of unforeseen circumstances!

Exactly, and to be very clear, I don't think anybody was stupid. I fully accept that if I had been in the construction industry, making €60,000 a year and unsure what to do with the money I wasn't spending, I know it, I would have bought a house also. If I was in the position I would have made the same mistake.

It was not a stupid mistake, but it was a big mistake.

brennarr

Fianna Downfall wrote: »

It's not so simple. A home is a neccessity. It's not like a fancy sports car or membership of a delux sports club.

A home is a neccessity alright, but the purchase of another house or two is not. The people got as greedy. There was never any need to own 2-3 houses.

drunkmonkey

mixednuts wrote: »

What do you expect a countries population do do over this period ? Stay out of the housing market and not buy a home ?

If you can't afford or think something is overpriced you wait and rent. Nobody had to buy a house. There was not a gun to anybody's head.

I waited and i'm still waiting for prices to be corrected, the bank first approached me in 2002 for a home loan.

sparkling sea

who what when wrote: »

Agreed and ive been saying for a long time theres four EQUALLY guilty parties in all of this;
1- Government
2- Banks
3- Financial Regulator of the time
4- General Public

The general public seem to be totally unwilling to take any responsibility at all! This is strange considering there would be no banking bailout if there were no customers willing to mortgage themselves up to their collective neck!

Why do you think it is that the farmers who got paid most of the money for the land, are never seen a greedy or responsible in anyway ?

I always surpirsed and wonder why developers are seen as really greedy, etc but the farmers (usually the site owners) who owned the land and sold it for callossial amounts of money are not.

IrishButGerman

SkepticOne wrote: »

Where I disagree with you is that I think most people are taking responsibility.

Anybody who is fulfilling their repayments is taking responsibility I agree.

SkepticOne wrote: »

I don't agree with all this talk about "predatory lending" and what have you. These are just things people say.

True, point taken.

SkepticOne wrote: »

The reality is that the vast majority of those who borrowed are for the most part paying off their borrowing, and if they can't, make great efforts to do what they can to pay it off.

Is it really the vast majority? And will it be still that same majority next year?

SkepticOne wrote: »

My view is that, in situations such as these, the borrower and lender have equal responsibility since for a loan to occur consent of both parties must be present. But whereas the ordinary punter is living up to his side of the bargain, the lender is the one getting bailed out and these lenders aren't just in Ireland, but many are in foreign countries including Germany.

I don't think anybody thinks those who have massive financial debts but are paying them off is doing anything wrong.

SkepticOne wrote: »

One of the annoying things about the narrative that is developing abroad is that it is simply a case of the Irish public living it up on borrowed money and now they are complaining about having to pay it back.

I understand that it's annoying if it doesn't apply to you, it doesn't apply to me either. But it does apply to many in this country.

SkepticOne wrote: »

Far from taking too little responsibility, in this specific aspect we took too much responsibility in our effort to keep foreign risk-takers happy and we are now paying the price for it.

I don't agree. I think there are some in this country who really are taking too much responsibility. Those people would be those who are paying off their own debts, and those of others. That is not everybody though.

jpb1974

I started a family and bought a home circa 2007.. aged 33.

Forgive me for not waiting.

Forgive me for wanting to provide a home for my family to live in and my children to grow up in.

Forgive me for getting up every morning, going to work, earning a living, paying my taxes and not handing a landlord their monthly rent.

I accept I am wrong.

sensibleken

Its not like the general public own 3 houses.

for god sake people were buying small 3 bed houses in dublin for 500,000 because that was the going price. its not like there was any alternative apart from renting. which i did simply because i couldnt afford a morgage.

Where is this perception that everybody was greedy coming from? yes some people were. But there were still an awfull lot of people just getting by during the boom years, unable and unwilling to dig ourselves into massive debt just to keep up with the jonses and were the ones having to clear up this mess.

It seems to me that the people saying 'ah sure we were all at it' are the precisely the people who borrowed to pay for a tiny apartment with a massive tv

sparkling sea

IrishButGerman wrote: »

You may need a home, but it doesn't need to cost €259,000. If you have a home through loans in those amounts it is because you wanted it, not because you needed it.

A very simplistic view of the situation indeed. Just because you want a home doesn't mean you want a huge loan to pay for it, its a strange conclusion to draw

drunkmonkey

jpb1974 wrote: »

I started a family and bought a home circa 2007.. aged 33.

Forgive me for not waiting.

Forgive me for wanting to provide a home for my family to live in and my children to grow up in.

Forgive me for getting up every morning, going to work, earning a living, paying my taxes and not handing a landlord their monthly rent.

I accept I am wrong.

Your only wrong if you couldn't afford it. If you thought it was overpriced you could have rented. If it was the right house at the right money, happy days.
I was looking at graduates buying 300,000 apartments and scratching my head. The whole thing was just gone nuts.

jpb1974

I can afford it alright... but whether I'll still be in a job in the morning or not is a different matter.

IrishButGerman

sparkling sea wrote: »

A very simplistic view of the situation indeed. Just because you want a home doesn't mean you want a huge loan to pay for it, its a strange conclusion to draw

I'm sorry you can't understand the meaning, here is what I was trying to say.

If a home was a necessity, a home you can afford was an absolute necessity.
If you could not afford any home (which I doubt, but some claim) then by purchasing a home you could not afford, you will eventually not have a home any more.

IrishButGerman

jpb1974 wrote: »

I can afford it alright... but whether I'll still be in a job in the morning or not is a different matter.

If you can't afford it in the future, then yes, it was a mistake. You couldn't foresee this situation? I don't blame you, most people didn't, but when you take on that much debt, for such a long time, you must consider even remote possibilities, and have a plan of action.

You don't have to feel bad about it, feeling bad about it doesn't do anything, anybody who wants you to feel bad is an idiot.

molloyjh

who what when wrote: »

If you are able to afford a loan in the long term by all means apply for it. So many people took on massive mortgages with no ability to repay in the event of unforeseen circumstances!

Things are a good deal more complicated than being able to repay a mortgage or not. Take myself and my gf for example. We are paying our mortgage as ever because we bought a house we could afford over 5 years ago and have been lucky enough since to have improved our circumstances so that we aren't under any threat from a repayment point of view even after pay cuts and tax hikes etc.

However we can't afford to sell up. Our house is in negative equity (and has been for a while) and if we were to trade up we would need a deposit and at least 10% of the purchase price as the banks won't lend the full amount. This doesn't then include stamp duty. We could never get that kind of money AND pay off the remaining equity on our current house.

The numbers in that position are probably pretty high, and getting higher. And if you look at the way the property market works people trading up are a sizable part of the market. People going from a 2 bed to a 3 bed because they are having a family etc. If they aren't trading up and new houses aren't being built then there is a relative shortage of starter homes in the near future. So it makes it that much harder for others to get on the property ladder too. This is another issue that has been ignored that really needs to be addressed.

IrishButGerman

molloyjh wrote: »

However we can't afford to sell up. Our house is in negative equity (and has been for a while) and if we were to trade up we would need a deposit and at least 10% of the purchase price as the banks won't lend the full amount. This doesn't then include stamp duty. We could never get that kind of money AND pay off the remaining equity on our current house.

I'm sorry I don't understand your point exactly, you are doing well and making your repayments on your home, but you aren't able to trade up? Then, don't trade up! No problem.

T runner

IrishButGerman wrote: »

The Government despite having almost no public support and a tiny majority, who have being leading the country since the creation of this crisis, do not seem at all the consider themselves in any way responsible.

The banks continue to deceive the Government (although they must know it) about their problems. The responsible thing to do would be to disclose the true magnitude of their problems, so that the Government might finally accept it is not just a liquidity problem.

But above all else, the public (not in total) take absolutely zero responsibility when in reality a ton of blame falls on their shoulders. The talk of "predatory lending" for feck sake, you are not children, you are not prey, you are adults and you made BAD decisions, face up to it.
Some people here seem to live in a dream land, you can't take out loans (be it mortgages, car loans, higher purchase) in some cases in excess of ten times! TEN TIMES your salary and expect to not only keep those assets when you don't pay, but play the victim!

I fail to see any difference between (except in magnitude):
Banks borrowing tons of money to recklessly loan out.
Developers borrowing tons of money to recklessly spend.
The public borrowing tons of money to recklessly spend.

Average mortgage in 2008 is €259,215.
Approximately 70,000 mortgages in arrears in 2010.
Is none of this the result of bad choices, excessive risk taking? Or is it all the fault of the government and the banks, and these people are just victims?

Where you have billions of euro of excess money flying around banks you will have an equivalent increase in private borrowing.

This is a fact. If banks have a lot of spare money they will try to lend it, thats what they do. To do this they must make more people want a loan. If anyone should know if loans are viable or not is should be professionals in a bank.

To state that the banks in Ireland unique lending disasters are somehow compatibale with a person making a mistake by borrowing when they shouldnt is ridiculous.

And remember on teh highest level German yes German pension funds lent recklessly to the likes of Anglo and AIB. Although they got low interest rates becuase they were taking a risk they will still get every penny.

Who is paying them? Not the German taxpayer, the Irish taxpayer.

German banks and the German taxpayer will do nicely out of this Bailout arrangement.

The money that German pension funds and big banks pushed into the system found its way to companies and European taxpayers. Blaming taxpayers solely for teh influx of this vast credit is not on.

IrishButGerman

T runner wrote: »

Where you have billions of euro of excess money flying around banks you will have an equivalent increase in private borrowing.

This is a fact. If banks have a lot of spare money they will try to lend it, thats what they do. To do this they must make more people want a loan. If anyone should know if loans are viable or not is should be professionals in a bank.

Here we go again, the banks had all this potential to make money by lending to the public, that they managed to coerce the public into taking it, walking past a bank usually had the manager stuffing notes in your pocket and giving you a wink, it's their fault, they forced it on us.

T runner wrote: »

And remember on teh highest level German yes German pension funds lent recklessly to the likes of Anglo and AIB. Although they got low interest rates becuase they were taking a risk they will still get every penny.

Who is paying them? Not the German taxpayer, the Irish taxpayer.

German banks and the German taxpayer will do nicely out of this Bailout arrangement.

The money that German pension funds and big banks pushed into the system found its way to companies and European taxpayers. Blaming taxpayers solely for teh influx of this vast credit is not on.

I'm not German by the way, I just feel like a German, because during the entire boom and crisis, I had a constant net balance. I have no debt, just deposits, so I feel like a German :P
Actually, I guess I am to blame here too. I mean I deposited my money in Irish banks, which in turn recklessly lent it out (coercively some would say). It's really me who is to blame! I shouldn't have put my money into the bank right? I'm sorry let me pay your debts for you.

T runner

IrishButGerman wrote: »

Here we go again, the banks had all this potential to make money by lending to the public, that they managed to coerce the public into taking it, walking past a bank usually had the manager stuffing notes in your pocket and giving you a wink, it's their fault, they forced it on us.

The level of personal debt goes up in proportion to the amount of credit available. Yes some people borrowed recklessly. Others borrowed under the assumption that due diligence and regulation was functioning in banks.

I'm not German by the way, I just feel like a German, because during the entire boom and crisis, I had a constant net balance. I have no debt, just deposits, so I feel like a German :P

(Youre not Irish though? Where are you from?)

I have no debt either but have always felt Irish. Being in net balance does not give you the moral authority to lecture people who have lost homes with your jobs. Your mortgage is always calculated on yoru salary unless you are very rich and have large savings. Losing teh house with your job is a risk that the vast majority of lenders take in every country.

Actually, I guess I am to blame here too. I mean I deposited my money in Irish banks, which in turn recklessly lent it out (coercively some would say). It's really me who is to blame! I shouldn't have put my money into the bank right? I'm sorry let me pay your debts for you

This illustrates taht you do not fully understand how this crisis emerged.
Depositing your money in banks has nothing to do with the crises. This is normal banking and you are guaranteed your deposits. That is not my argument, for you to suggest it is is either a lack of understanding on your part or a deliberate strawman argument.

Germand and French Penion funds and banks lent vast sums of money to Anglo and AIB. These were not guaranteed (when they lent them) so as senior bond holders taking risk they got a good rate of interest.

They should have taken loss when these banks wavered. They didnt because the government guaranteed ALL senior bondholders.

So Irish tax payers will pay for ALL these loans that failed, will pay for ALL ECB IMF loans, will pay for everything.

Do you understand that many people could not ahve foreseen this????
That we would have to bail out Irish, French and German banks???
Do you understand why many people will not now be able to repay their own loans, becuase tehy are also repaying loans made by Foolish German penion funds in full???

SkepticOne

Question for the OP: do you accept that investors in Germany and other countries are getting off lightly for their poor decision making in lending to private companies that happen to do business in Ireland and that it is not those private companies that are paying the price but ordinary citizens many of whom had no part in either they lending or the borrowing?

IrishButGerman

T runner wrote: »

The level of personal debt goes up in proportion to the amount of credit available. Yes some people borrowed recklessly. Others borrowed under the assumption that due diligence and regulation was functioning in banks.

What fundamentally is different between those two groups you just mentioned.

Those who borrowed recklessly.
Those who borrowed under assumptions about the regulator and banks.

Where's the difference. If they were calculated risks that is fine, but the unfortunate outcome has arrived.

T runner wrote: »

(Youre not Irish though? Where are you from?)

I am Irish

T runner wrote: »

I have no debt either but have always felt Irish. Being in net balance does not give you the moral authority to lecture people who have lost homes with your jobs.

I never claimed any moral authority

T runner wrote: »

This illustrates taht you do not fully understand how this crisis emerged.
Depositing your money in banks has nothing to do with the crises. This is normal banking and you are guaranteed your deposits. That is not my argument, for you to suggest it is is either a lack of understanding on your part or a deliberate strawman argument.

It was a strawman argument of sorts, in response to the predatory lending strawman.

T runner wrote: »

Germand and French Penion funds and banks lent vast sums of money to Anglo and AIB. These were not guaranteed (when they lent them) so as senior bond holders taking risk they got a good rate of interest.

They should have taken loss when these banks wavered. They didnt because the government guaranteed ALL senior bondholders.

So Irish tax payers will pay for ALL these loans that failed, will pay for ALL ECB IMF loans, will pay for everything.

I suspect we won't pay for them in the end, because I don't think we can.

T runner wrote: »

Do you understand that many people could not ahve foreseen this????
That we would have to bail out Irish, French and German banks???
Do you understand why many people will not now be able to repay their own loans, becuase tehy are also repaying loans made by Foolish German penion funds in full???

Many people can't repay their own loans, because they never could also. Talk to people abroad about the incomes construction workers were receiving here, about how large the mortgages are here to see that there was a temporary insanity.

IrishButGerman

SkepticOne wrote: »

Question for the OP: do you accept that investors in Germany and other countries are getting off lightly for their poor decision making in lending to private companies that happen to do business in Ireland and that it is not those private companies that are paying the price but ordinary citizens many of whom had no part in either they lending or the borrowing?

Yes I do accept that investors in Germany and other countries are getting off lightly, but I also think many in Ireland currently are too.

The talk of the Irish having to pay for the bad investments of foreign business is a little off mark. It's not all the Irish people, it's pretty much just those who are meeting their own debts. Those who cant meet their own financial responsibilities aren't going to help the Germans either.

Boskowski

The one thing I don't get is people going on about the welfare barely enough because of their mortgages and loans.

I know it's a horrible position to be in and it's easy for me to say what I'm going to say since I (still) have a job, but...

I mean it's the risk that comes with a mortgage. You're tied to the property/location and the repayment ties you down as well. You're doomed to get that money in the door every month and if your circumstances change it's just not that easy to downsize and relocate. While there is disadvantages to renting there is also disadvantages to ow(n)ing. This is one of them and regardless of whether your jobloss is your own fault or not and regardless how many children you have - it is your risk and you couldn't realistically expect welfare to keep you in your house indefinetely.

I know that I live in my house because I work. I also know that if I lose my job I may lose the house. I couldn't possibly expect welfare payments (at least not in the long run after my PRSI credits run out) to pay for my mortgage and everything else indefinetely.

That's personal responsibility.

SkepticOne

IrishButGerman wrote: »

Yes I do accept that investors in Germany and other countries are getting off lightly, but I also think many in Ireland currently are too.

The talk of the Irish having to pay for the bad investments of foreign business is a little off mark. It's not all the Irish people, it's pretty much just those who are meeting their own debts. Those who cant meet their own financial responsibilities aren't going to help the Germans either.

A lot of this is simply factually untrue. You start off by saying that the Irish people as a group are not taking responsibility for their actions yet the majority of these either did not take out mortgages in the boom year or are paying off their loans, yet despite this all regardless all are carrying the can.

It is true that some people can't pay their mortgages and this number is likely to increase. But while it is obviously a problem for them (being in serious debt and possibly losing their home) it should also be a problem for the lender. It should not be a problem for a third person who had nothing to do with the decision to either borrow or lend.

If I invest money in a business in Germany and that business fails (it could be a bank or some other business, it doesn't matter), I don't expect the German people generally to compensate me for my bad investment decision.

molloyjh

IrishButGerman wrote: »

I'm sorry I don't understand your point exactly, you are doing well and making your repayments on your home, but you aren't able to trade up? Then, don't trade up! No problem.

And if I want to have a family? What then? Where do I put them, in a press somewhere? Under the stairs?

Part and parcel of the housing market is the demand for trade-ups, freeing up the smaller properties for FTBs and helping to shift larger ones to those moving on. So if there's less of that and feck all new developments where are the starter homes going to come from? How are people going to get on the ladder? And if they skip the starter home what happens to those who haven't?