In simple terms...what happened? How bad is it?

JohnMc1

Worztron wrote: »

Basically capitalism is futile. It gurantees that the wealth of a country will never be spread equally.

You guys are delusional if you think we would be better off under a Socialist Communist or any other -ism system you can think off. Do you think the elites were waiting for hours on the bread lines with the lower classes under Communist Russia? You're naive to think so.

There is going to be corruption under any system as long as politicians are more interested in lining their own pockets.

hawk222

Sanjuro wrote: »

... can somebody please explain to me, or point me in the right direction, an explanation as to what's happening, what's the likely next move, and how screwed we all are with the current political environment.

I'm certainly no economist. I'm just a guy with a lower-end of the scale job. I have a mortgage I can manage, and a job that's as safe as any job can be at the moment. Private sector. But I am actually a bit concerned as to what's going on at the moment. It seems that all the talk that's going on, be it on the news or the political programs, or, god forbid, the pub is all doomsday frenzied talk. I just want to understand the situation a bit better.

I just need a black and white explanation without all the technical jargon that is just confusing me. I know we're in trouble, and it's something we're going to be dealing with for a long time. But I'm hazy on why we're here and what are the likely out comes of the upcoming budget, election and IMF intervention. I'd greatly appreciate a little help so I can get my head around it. I'm sure there are other people as confused as me.

Thanks in advance, and mods, if I'm in the wrong forum, please redirect.

[MOD]This thread has been stickied - feel free to ask questions & respond to them. Do not post clever one-liners, rants, or other rubbish, because it will earn you an instant ban.[/MOD]

i am findin it cofusin to but i read [ Iceland shows how Ierland did wrong things on politico.ie now lot clearer hope this helps

RichardAnd

Worztron wrote: »

Basically capitalism is futile. It gurantees that the wealth of a country will never be spread equally.

I would ask the question of why wealth should be spread equally? Does the man who built a buisness from nothing and made himself a fortune not deserve his wealth? Should he be forced to share it with someone who never lifts a finger? I don't think so and I don't think you really do either.

Capitalism is the most natural way for a state to run. If you're wise, you go far but if you mess up, you fail. What we currently have is a form of bastardised socialism where governments continue to tinker with the economy which distorts and befuddles what should be a natural entity.

And also, don't mind what ardent socialists tell you, the bank bailout is not a capitalist act.

jammyhog

RichardAnd wrote: »

I would ask the question of why wealth should be spread equally? Does the man who built a buisness from nothing and made himself a fortune not deserve his wealth? Should he be forced to share it with someone who never lifts a finger? I don't think so and I don't think you really do either.

Capitalism is the most natural way for a state to run. If you're wise, you go far but if you mess up, you fail. What we currently have is a form of bastardised socialism where governments continue to tinker with the economy which distorts and befuddles what should be a natural entity.

And also, don't mind what ardent socialists tell you, the bank bailout is not a capitalist act.

your right it was a socialist act, it's a shame the same ideology has not been applied to the masses in negative equity or in default but hey the markets will sort it all out.....let them eat cake!

clouds

RichardAnd wrote: »

I would ask the question of why wealth should be spread equally? Does the man who built a buisness from nothing and made himself a fortune not deserve his wealth? Should he be forced to share it with someone who never lifts a finger? I don't think so and I don't think you really do either.

Capitalism is the most natural way for a state to run. If you're wise, you go far but if you mess up, you fail. What we currently have is a form of bastardised socialism where governments continue to tinker with the economy which distorts and befuddles what should be a natural entity.

And also, don't mind what ardent socialists tell you, the bank bailout is not a capitalist act.

I think you are being a bit naive to think that wealth is split between a) those who build businesses from nothing and lads who never get out of the bed. The vast majority of us work but we can't all be businessmen, society needs a wide range of skills. So while wealth creators are fundamental they shouldn't and can't be the only ones rewarded in society. So that's an argument for redistribution right there. It's not just between the wise and those who messed up. Civilization has moved on from starving hordes in the street, we don't allow taht anymore, aggravating as it is for chancers to be all take take take.

I don't know how you can say that it was governments tinkering with the market that caused all this -it was a failure of regulation, not regulation itself that brought us to where we are.

crx===

Capitalism,Socialism,Communism ..... in today's world what's the difference ?? Look at China , the once pinnacle idealist base on Soviet influence and now perfect capitalist buying up half the world reserves.
At the end of the day the lesson learned is that it amounts to combination of power and greed... nothing more. It is a primitive and basic sub-script of human behavior and as history has shown us will be repeated over and over until we have a renaissance of reasoning or we evolve enough to see our mistakes. God pray we have time.

crx===

clouds wrote: »

I think you are being a bit naive to think that wealth is split between a) those who build businesses from nothing and lads who never get out of the bed. The vast majority of us work but we can't all be businessmen, society needs a wide range of skills. So while wealth creators are fundamental they shouldn't and can't be the only ones rewarded in society. So that's an argument for redistribution right there. It's not just between the wise and those who messed up. Civilization has moved on from starving hordes in the street, we don't allow taht anymore, aggravating as it is for chancers to be all take take take.

I don't know how you can say that it was governments tinkering with the market that caused all this -it was a failure of regulation, not regulation itself that brought us to where we are.

I agree 100% , if those who control the wealth increase the cost of living for those who work by buying up the resources then as I have said it is not about wealth but only about power and greed.
Take for instance a billionaire who invests his fortunes in corn , given last years poor result in Russia and corn prices set to rise 93% he stands to control the market making the honest worker pay for his tinkering in the market which effects the most basic needs of us all. That is the problem all round us today .. capitalism reaching its conclusion.

Gain from hard work and perseverance a noble and past thing.

This is certainly not wisdom ... if you mess up then you become the victim....... as a reply RichardAnd : A very narrow and skewed vision of the world you live in I'm afraid.

mm_surf

How bad is it right now?

The money spent on the banks & NAMA - did we have the cash lying around somewhere or was it borrowed?
I'm assuming it's spent, gone, not to be seen again.

I'm also assuming its been borrowed. And someone will want it paid back!

If that's the case, how quickly is it going to be paid back? 'Cos its quite a few bob we owe, isn't it?

Money spent so far is of the order of €100 billion, give or take? (not including EU/IMF stuff yet to be drawn down, not including borrowing for the budget, the day to day stuff)

Are we to pay this back over the course of the "austerity period", i.e 5 or so years? Or is the plan to put it on the "never never" and hope to have it paid back over the next 30 or so years (fingers crossed that it'll be paid back before the next recession hits?)

Because this is a lot of money. €100 billion in a land of 4 million people is €25k each. €5k each over the next 5 years, or €1K each over the next 25.

Before interest?

Is it really that bad?

I'm assuming that the budget for running the country will have to balance out, one way or the other, as we can't borrow any more to do that. So the figures above would be to pay off the banking/property disaster.

Are my figures way off, or are we that screwed?

srsly78

Yes, not all of those 4 million people work.

mm_surf

srsly78 wrote: »

Yes, not all of those 4 million people work.

I didn't really want to use the nasty figures of who'll actually be paying for it.

Of those 4 million, 2 million are employed.

Of those 2 million, maybe half are net contributors? (i.e. pay more in tax than they receive through other breaks)

So if my figures are used for just the 1 million who'll actually be paying off that captial:

€20k a year over the 5 year period?
€4k a year over a 25 year period?

Kinda makes a joke of the various parties' claims that they are going to put up tax by less tham €1500 a year?

Or am I wrong? Is there any other way out?

SamSamSammy

basically, we are doomed. you may as well kill yourself now.

drdoon

FI you want to keep informed on whats hapening, whats going to happen. Youtube Max Keiser, Peter Schiff, Robert Kiyosaki, Marc Faber, Gerald Celente. Some of these opinions are seen as extreme. But you have to give it to people who were talking about the meltdown back in 2005-06.

barbersfort

Just read this:
http://www.city-journal.org/2011/eon0223td.html

It states:


The gross external debt of Ireland is just a fraction less than half a million dollars per head, that is to say, more than $2 trillion in total.

I wonder if this is accurate??

clouds

Good God it can't be.

K-9

barbersfort wrote: »

Just read this:
http://www.city-journal.org/2011/eon0223td.html

It states:


The gross external debt of Ireland is just a fraction less than half a million dollars per head, that is to say, more than $2 trillion in total.

I wonder if this is accurate??

It seems to be often quoted by American journalists. It includes IFSC debt which is not guaranteed.

clouds

K-9 wrote: »

It seems to be often quoted by American journalists. It includes IFSC debt which is not guaranteed.

Isn't that a bit scaremongering then? It's not 'our' debt.

K-9

clouds wrote: »

Isn't that a bit scaremongering then? It's not 'our' debt.

Well yes. Badly researched I'd say.

Scofflaw

barbersfort wrote: »

Just read this:
http://www.city-journal.org/2011/eon0223td.html

It states:


The gross external debt of Ireland is just a fraction less than half a million dollars per head, that is to say, more than $2 trillion in total.

I wonder if this is accurate??

This is one of those "a figure from here, a figure from there" articles. The figures for the bank lending does, as K-9 says, include IFSC banks, which have nothing to do with the Irish taxpayer. That Belgium shows up heavily may seem a little surprising, even for IFSC companies, but Belgium is Europe's main transhipment point and thus our third largest single point of export, so there's a lot of credit being extended backwards and forwards there - but not in the form of Belgian bank loans to our domestic banks.

As to the "external debt" figure - yes, that's very large, because it represents absolutely everything owed by any person or company in Ireland to any person of company outside Ireland. We have a lot of foreign investment by multinationals, and the money that's invested here as a result forms part of our foreign debt. If we managed to attract another huge multinational to invest $10bn in Ireland tomorrow, our external debt would rise by that amount.

Not that the journalist has bothered to justify why it's relevant in the context - it isn't - or to note that there is, of course, a corresponding set of foreign assets, which is everything owned abroad or owed from abroad to any Irish-resident person or company. That figure is, unsurprisingly, also somewhat over $2 trillion.

cordially,
Scofflaw

crx===

There's alot more going on in the world than just Irish problems , unrest is everywhere .. look to the middle east sweeping change ! Why ? Not surely because of the advent of facebook, or any other social media.
We were just a nation..unwittingly led i might add onto the higher gambling stakes of a world gambling market ( we didn't have any chips by the way but bluffing got us far ) And reasonably .... as we have seen when we fail we fall far.Well predicted before the following link:
http://www.energybulletin.net/stories/2010-12-29/peak-oil-crisis-2011-%E2%80%93-pivotal-year
Inevitabitily is absolute.
Figures are what they are .. just that. The real picture .. everything overvalued , sadly today even the workers. The truth about return to growth is that once a counrty can match the productivity of the once 3rd world nations then there will be just that at it own economic cost.
If we accepted the pay and conditions of current eastern countries would we not see employment growth in this country ? Undoubtly!
Dell (as only an example) left Limerick .. where did the go and why?
We couldn't work for the wage it wanted , yet we buy the their goods from the mega hyper super store today.
Maths are simple I'm afraid.Adopt an economy/strategy such as China and return to growth .. its the current entry level.

crx===

I apologize for sounding like an utter pessimist , I was once a realist.

crx===

KIERAN1 wrote: »

I've studied business studies at a certain college, but someone without having this educational background, should be able to understand how bad the situation in Ireland is, if they've any common sense! I personally having been saying the Banks were corrupt to my friends and close colleagues for years, because I understand the nature of what was happening inside the walls of many of these banking institutions. Why I am even writing this post, is that I am so tired and sick to death of this government as it now stands. Even now the whole cabinet is in denial, media personalties should' be holding or so-called elected officials to account more when doing interviews, but no there still being allowed to peddle the same old raffle, they'd spewed before previously, remember, government and bankers and we the citizen are to blame too for having brought this country to a position were had to beg for money 'honestly truly' to keep us afloat and keep the country running into the future. I know it hard to accept for some of us, but that is what basically happened!

Capitalism has failed the working men of Ireland and probably other citizens in other places in the coming future, and it amazes me governments in countries that suffered so badly after the crash of Lehman brothers and failure of the banking system globally would not sit back and ask themselves, is this system good for the old and ordinary working people of country? To understand why we are were we are, you have to understand the human species since the dawn of culture. The fact is we are divided society, it not that obvious unless your willing to go there in your thinking!

Scattered around the world we have a number of people 1per cent of the global population who control the most wealth, the other 99 per cent fight for the rest of the wealth, but how much wealth does one person need! Honestly what can of human being requires a billion to live or even a million?

Our failure can be traced to the United States, lot of people bought into lifestyle they saw in movies were is showed nice American families in nice fancy homes with a nice garden and nice car outside and nice gadgets inside the home. That is make believe people. What people in this country need to get into their heads, while it may seem to you thinking it. Finally I have made it I own my own home! The fact is however for large proportion of people who took out mortgages in the last ten years or more "You DON'T" own your home, the bank is the owner of that home. Until you pay that last installment on your mortgage your sitting in a rented house! People don't want to think like that, it more comfortably for them to hold onto their wishful thinking, but that is were troubles arise when you fail to listen to your inner thoughts about the situation you are in. Basically it boils down to that everything we do everyday is either about making money or spending it, but this is damaging for modern society long term which now we do see.

I could explain in more depth the problems, short of time hinders me here. But how bad will it get. It will only get better. If the system changes. And that is not going to happen since there is no willingness to even change the mindset or the policies as before. Why would Bankers change a system that rewards than punishes ill practices. Are we that stupid that we can't see that this is basically a white-collar robbery from the inside. They are gaining twice. Bankers around Europe, and elsewhere are passing off money as loans, and as bail-outs to governments, but in effect there only loaning to themselves and taking no hit on interest. We the ordinary-folk are paying the interest. There slapping us in the face twice with both hands. Just because there not holding us up with guns does not make any less a crime, but this guys are clever, there so embedded with everything. It hard to find prove, but the evidence is in action.

I personally believe very likely the Euro and Dollar will collapse at different stages in the next two years. You can't just pump money into a failed banking system, and expect it all to turn out well in the end. This money is money that is owned and if only been pocketed by bankers which by all means seems to be the case, what do people honestly expect a nice rose bowl of flowers at the end. Money backed by "NOTHING" is just paper at the end of the day. Eventually the markets will come calling again, and there be nothing in the treasury to hand-over next time round! It pretty much established governance is not about common sense, but who your friends are and who are your supporters are, your supporters interest will always come first in any Capitalist system, to the detriment of the population you claim your looking after been elected to government! Sorry if there is grammar problems spelling problems have to rush soon can't do some due-diligence.

Sorry for not reading your thread before now.... you studied well my friend.
As I said capatilism reaching it's conclusion.

Worztron

Wait for the mortgage timebomb to explode. FG expect that a lower interest rate will make everything manageable – it is akin to getting a second bucket of water to put out an inferno. Its as simple as this – the debt cannot be repaid. Most infuriating of all is that not a single crook has been jailed. To top it all, Brian Cowen gets a massive pension and bonus for f**king the country up. :mad:
The Irish public have been sentenced to a financial prison that they did not cause, a small few elites caused it so they alone should be crucified. How long can this nonsense carry on for?

crx===

How long can this nonsense carry on for?

The answer to that one is simple .... Until people demand & make change.
A change of political parties will not help us now I'm afraid , that might have eased some of the blunders back in 2007 i.e the economic mule may not have been beaten completely to death , but now the IMF/ECB call the shots.
The proof of this will be our corporation tax.
It is sickening to hear the political leaders try to convince us with 'If you vote for me I'll get you a better deal attitude' ..Rubbish !!
People of Ireland have gained one thing from the 90's & Celtic Tiger era ... Education.
Political smoke in mirrors doesn't cut it any more .. as is evident from reading post on this thread .

drdoon

wow

crx===

bardcel wrote: »

I can tell you in my experience how bad it is without the technical jargon I had a job that's as safe as any job can be at the moment until this afternoon after six years on a low wage I was informed the company is no longer renewing my contract. I was only reading today about a protest march from Kilkenny to Dublin? We Irish really need to step outside ourselves and take a look at what is going on here. I lived in Africa years ago and learned about the "winds of change" sweeping that continent and how 99% of countries were taken over by initial governments that were all too corrupt and some still are...I actually cried for a minute in front of my boss I couldn't believe it.

I'm not ashamed to share my feelings and I really believe we as a nation need to take a very serious grip on our future and ensure we don't slip back into being mediocre ever again. The worst thing i have heard out of any politicians mouth sideways so far is that we somehow "deserved" this i.e. we did this to ourselves, etc. I never got the house, mortgage or new car but my lifestyle was improving and heading in a new healthier direction. I don't envy those who tried or scorn them I believe we were all looking at a better future for ourselves where we could hold our heads high finally after so many decades of independence. Anyone remember that feeling?

We had Irish programs on TV written by Irish and acted by Irish going around the world. We had Irish actors coming out of the woodwork and acting alongide famous Hollywood actors. We even had an Irish "James Bond" for kerist's sakes who would have thought of that one I certainly didn't? I hate poverty myself butI never believed in stepping over everyone else to get to the top of the heap and having my nose rubbed in it by irresponsible politicians really irks me...by their fruits you will know them!!!

Regardz

Well spoken ... you are an honest man when you did not exploit the 'Celtic Boom' years .... Hold you head high....more important things in life than money.

perch

locomo wrote: »

Basically what has happened is that the IMF + EU are here because nobody else will lend us money any more, and our government is spending 50 billion + taking in 30 billion. We have proved that despite the tens of billions of grants / handouts received in EC structural funds, + from Europe already, we are incapable of governing ourselves. The reason we are the laughing stock of the world is that our government and public servants give themselves - and have done so for many years - probably the highest pay and pensions in the world. Even the social welfare ( dole , old age pension etc ) in Dundalk is over double that in Newry, which is part of a G7 economy which has economy of scale and part of a major industrialised country and which is helping to bale us out. Cowen, the present leader who was minister for finance during the artificial boom , is just regarded as a white version of Mugabe throughout the world.( maybe not at 3.30 am in a hotel in Galway though before addressing the nation at 8.30 ! ).

We must be a laughing stock across Europe with the news in the Sunday Independant that increments were paid to the public servants last year and such rises increased the deficit by 1bn. I heard no reaction from the new government so far so they go along with the lie.
I feel like a rat on a rudderless raft on the Zambesi who doesn't know how close the Victoria falls are....

Sand

clouds wrote: »

Isn't that a bit scaremongering then? It's not 'our' debt.

Not as reassuring as it might seem. The banks werent our debt either, but now they are apparently.

danbohan

keithob wrote: »

all comments on the thread are really interesting... esp Kiernan1..

however... over the past 3 years i along with others have been screaming shouting protesting week in week out... it got to a stage that my misses and my family thought i was gone mad....


nothing is gona change until the irish people as a majority want it to change... they have gotten what they deserve and fine gael are gonna fk things up more ...


stop paying the esb/imf money and dig our own way out of this hole.

wont the cut off your electricity if you do that ?

rodgered

What exactly is meant by burn the bondholders?

Scofflaw

rodgered wrote: »

What exactly is meant by burn the bondholders?

Force those who loaned money to Irish banks to accept repayment of less than they loaned.

cordially,
Scofflaw