Anglo shows how impotent we are as a people

blackiebest

http://www.independent.ie/business/irish/anglo-bondholders-to-share-in-euro200m-payout-2658135.html

I am almost physically sick having just read this. I now believe we are victims of the greatest 3 card trick in history. Why do we sit back and allow this? When will we realize that this is not a story in the paper happening somwhere else but here, to us and future generations.

May they roast in hell, the corrupt scum who have destroyed our society.

We need to grow a pair and stop this madness!

meglome

Tomorrow's repayment, which the bank is legally compelled to make, will see investors who bought the bonds back in December make gains of as much as 13pc.

The bank sold bonds in December and is now having to pay them back.

later12

Can we not just get all of the outrage out and done with in one go?

Look, this government and the previous government have clarified their position on this, the EA/ EU leaders have, too, clarified their position, as have the IMF, the Commission and the ECB.

Do we really need to have this repeated shock and outrage every time a payment matures? It's like being in a goldfish bowl whereby there is a constant cycle of memory lapse and total shock.

fred252

later10 wrote: »

Can we not just get all of the outrage out and done with in one go?

Look, this government and the previous government have clarified their position on this, the EA/ EU leaders have, too, clarified their position, as have the IMF, the Commission and the ECB.

Do we really need to have this repeated shock and outrage every time a payment matures? It's like being in a goldfish bowl whereby there is a constant cycle of memory lapse and total shock.

have we really seen outrage? you have seen the scenes from the streets of athens when further cuts were announced? haven't seen anything approaching that here.

i think a general gloomy malaise is a better description.

blackiebest

later10 wrote: »

Can we not just get all of the outrage out and done with in one go?

Look, this government and the previous government have clarified their position on this, the EA/ EU leaders have, too, clarified their position, as have the IMF, the Commission and the ECB.

Do we really need to have this repeated shock and outrage every time a payment matures? It's like being in a goldfish bowl whereby there is a constant cycle of memory lapse and total shock.

Maybe you are fully aware of the situation. I must admit that I had no idea that last December bonds could be bought in Anglo which would yield up to 13% within six months.

I feel the average Joe, like me, will have had no idea that this is the case. I am outraged. Unlike you I do not think that my next move should be to get over it! I think that as people have to face the consequences from the governments decisions regarding the banking disaster that only then will they realize how duped we have been.

Yes I think that there will be lots of repeated shock and outrage as payments like this are made!

melekalikimaka

blackiebest wrote: »

Maybe you are fully aware of the situation. I must admit that I had no idea that last December bonds could be bought in Anglo which would yield up to 13% within six months.

seems you were not aware either, if you were aware when they were issued would this be a problem for you? Do you understand that the bailout is to keep the bank going, and do you understand the bond system?

ei.sdraob

melekalikimaka wrote: »

seems you were not aware either, if you were aware when they were issued would this be a problem for you? Do you understand that the bailout is to keep the bank going, and do you understand the bond system?

So... how is that working out :rolleyes:

dynamick

blackiebest wrote: »

May they roast in hell, the corrupt scum who have destroyed our society.

The bubble was ceated by mass mania. Corruption is a scapegoat. Corruption didn not create our bubble and the avoidance of corruption will not prevent the next one.

Who do you blame for the Dutch Tulip mania? The Dutch banks? Their depositors and bondholders? Or the arseholes who swapped their gold and land for tulip bulbs in the hope of getting rich?

We need to grow a pair and stop this madness!

An alternative would be to grow up and accept responsibility for our own mess.

You are right that we are now impotent. We have to follow the programme or go hungry. That is the choice. The thing is to learn the lesson to avoid this siutation in future.

later12

blackiebest wrote: »

Maybe you are fully aware of the situation. I must admit that I had no idea that last December bonds could be bought in Anglo which would yield up to 13% within six months.

These are floating bonds, which mean they pay the market rate. Not cheap funding, indeed, I agree.

Here she is
http://www.google.ie/url?sa=t&source=web&cd=1&ved=0CBYQFjAA&url=http%3A%2F%2Fwww.ise.ie%2Fdebt_documents%2FAnglo%2520Irish%25203%2520_12004.PDF&rct=j&q=anglo%20irish%20bank%20bond%20payments%20due%20200%2C000%2C000&ei=bCLeTaDsLYKg8QPyjKGHCg&usg=AFQjCNFLTbeO4kj0UTyZaTIMgSsV1BSnHQ&sig2=yRzdZqt8N1F5om9jcpvBdQ&cad=rja

user1842

dynamick wrote: »

The bubble was ceated by mass mania. Corruption is a scapegoat. Corruption didn not create our bubble and the avoidance of corruption will not prevent the next one.

Who do you blame for the Dutch Tulip mania? The Dutch banks? Their depositors and bondholders? Or the arseholes who swapped their gold and land for tulip bulbs in the hope of getting rich?

An alternative would be to grow up and accept responsibility for our own mess.

You are right that we are now impotent. We have to follow the programme or go hungry. That is the choice. The thing is to learn the lesson to avoid this siutation in future.

Very simple way of stopping the problem from ever happening again. Enshrine in legislation that a bank can never lend more that 2.5 times a persons salary for a mortgage.

Why is this not happening???????????????????????????????

dynamick

very good question. There was never any legal limit or central bank rule on lending multiples in Ireland.

dynamick

dynamick wrote: »

An alternative would be to grow up and accept responsibility for our own mess.

There are a lot of people who have been made responsible for this mess who had nothing to do with it, not everyone overstretched themselves with large mortgages etc etc etc.

Do you honestly think the Irish nation as a whole are responsible for the mess?

ei.sdraob

dmclean1842 wrote: »

Very simple way of stopping the problem from ever happening again. Enshrine in legislation that a bank can never lend more that 2.5 times a persons salary for a mortgage.

Why is this not happening???????????????????????????????

And who will that be enforced by? our "Regulator" ?? :P

dmclean1842

dmclean1842 wrote: »

Very simple way of stopping the problem from ever happening again. Enshrine in legislation that a bank can never lend more that 2.5 times a persons salary for a mortgage.

Why is this not happening???????????????????????????????

Because folks on €200,000/annum have a larger percent of their wages left over after their other expenses for mortgage payments than someone on €40,000/annum.

meglome

RoverJames wrote: »

There are a lot of people who have been made responsible for this mess who had nothing to do with it, not everyone overstretched themselves with large mortgages etc etc etc.

Do you honestly think the Irish nation as a whole are responsible for the mess?

The majority seemed very happy to continually vote for a bunch of shysters. The majority were happy to accept you could have low taxes and high spending. We're not all equally responsible but I think we all had some part to play, even if it was just we didn't call shenanigans loudly enough.

user1842

RoverJames wrote: »

Because folks on €200,000/annum have a larger percent of their wages left over after their other expenses for mortgage payments than someone on €40,000/annum.

How does the above answer my question?

Actually I know why. If it is enshrined in legislation that no lender can lend over 2.5 times a persons salary, it will create a barrier for house price growth in the future. Growth will be linked to economic development. The government do not what this as they want another bubble to happen to pay off the debts of the last bubble. Also it would force actual negative equity on home-owners, not the "imaginary" negative equity people hope they can get out of in the future.

dmclean1842

dmclean1842 wrote: »

How does the above answer my question?

It does answer your question, if you take home €5000/month after tax and can live on €2000 than you have €4000 for a mortgage if you so desire.

If you take home €2000/month after tax and can live on €1500 than you have €500/month for a mortgage.

Should your criteria be applied to both of them?

A single person earning €32800 (or whatever it is) pays no tax at the higher rate, someone on twice that pays higher rate tax on half their wages.

Applying the 2.5 rule you suggest to how much they can borrow makes little sense really.

Applying it to their net income would make more sense.

later12

dmclean1842 wrote: »

How does the above answer my question?
[...] The government do not what this as they want another bubble to happen....

Sorry but this really is a load of horse manure. The poster has given you a logical reason why such a cap is unworkable, perhaps before you reply you should think about its implications.

user1842

RoverJames wrote: »

It does answer your question, if you take home €5000/month after tax and can live on €2000 than you have €4000 for a mortgage if you so desire.

If you take home €2000/month after tax and can live on €1500 than you have €500/month for a mortgage.

Should your criteria be applied to both of them?

A single person earning €32800 (or whatever it is) pays no tax at the higher rate, someone on twice that pays higher rate tax on half their wages.

Applying the 2.5 rule you suggest to how much they can borrow makes little sense really.

Applying it to their net income would make more sense.

I was talking about their net income/take home pay. What bank would look at their gross for god sake. Talk about nit picking on the word salary.

user1842

later10 wrote: »

Sorry but this really is a load of horse manure. The poster has given you a logical reason why such a cap is unworkable, perhaps before you reply you should think about its implications.

No he hasn't, he based what I was saying on gross income not net. I should not have used the word salary, I should have used net income instead. I made the obviously wrong assumption that people knew what I meant.

dmclean1842

dmclean1842 wrote: »

No he hasn't, he based what I was saying on gross income not net. I should not have used the word salary, I should have used net income instead. I made the obviously wrong assumption that people knew what I meant.

Salary is salary, net income is net income.
If you confuse them or use them when you shouldn't it's not for me or anyone else to realise that.

user1842

RoverJames wrote: »

Salary is salary, net income is net income.
If you confuse them or use them when you shouldn't it's not for me or anyone else to realise that.

Read my post, I said I made a "obviously wrong assumption", maybe you should point it out again to "realise that".

dynamick

RoverJames wrote: »

Do you honestly think the Irish nation as a whole are responsible for the mess?

Yes.

Who do you blame?

The Martians?

dynamick

dynamick wrote: »

Yes.

Who do you blame?

The Martians?

Well the folks who were in secondary school doing the leaving 4 years ago had little to do with it, they had no vote. All those folks who never voted FF or the Greens can't be held responsible either surely?

Some of the Irish population, not all.

dmclean1842

dmclean1842 wrote: »

Read my post, I said I made a "obviously wrong assumption", maybe you should point it out again to "realise that".

It's hardly my fault you use salary and net income in the wrong context

Applying your 2.5 net income thing a single person on €50,000/annum paying 4% into their pension would be able to borrow

€2829 * 36 = €102,00 ish

over 30 years at the current BOI variable rate ignoring mortgage interest relief their mortgage payment would be €460/month.

I don't see many countries where things are like that really.

user1842

RoverJames wrote: »

Applying your 2.5 net income thing a single person on €50,000/annum paying 4% into their pension would be able to borrow

€2829 * 36 = €102,00 ish

over 30 years at the current BOI variable rate ignoring mortgage interest relief their mortgage payment would be €460/month.

I don't see many countries where things are like that really.

Also I think that the max mortgage repayment length should 20 or 25 years. Can you rework with a 25 year mortgage?

dmclean1842

dmclean1842 wrote: »

Also I think that the max mortgage repayment length should 20 or 25 years. Can you rework with a 25 year mortgage?

Head off and use the AIB or BOI site if you want, be careful not to confuse salary and net pay though when using their calcualtors :pac:

user1842

RoverJames wrote: »

Head off and use the AIB or BOI site if you want, be careful not to confuse salary and net pay though when using their calcualtors :pac:

Thats why I wanted you to do it. I might make a mistake that you would have to correct me over and over on.

Well considering you don't feel confident to use a basic net based calculator perhaps that explains why your views on mortgage terms etc are not being enshrined in legislation

user1842

RoverJames wrote: »

Well considering you don't feel confident to use a basic net based calculator perhaps that explains why your views on mortgage terms etc are not being enshrined in legislation

Your right I dont feel confident and would always request a second, third and forth review on all figures I would put out.

I would hope anyone in any aspect of life would do the same.

Limits to mortgages make sense in my opinion and stop reckless lending which causes busts.

I can only hope legislators think the same.

ixtlan

blackiebest wrote: »

I must admit that I had no idea that last December bonds could be bought in Anglo which would yield up to 13% within six months.

Just to clarify and getting back to the original question, as later10 mentioned these were floating bonds. It's not really the case that the state is paying 13% for six months money, only that those investors who took a big risk in December are making a big profit, which it's true coming from us...

What I'm more interested in, and this is something that I have never seen discussed, is what the actual interest rate on the senior bonds has been. I'm curious as to how it compares with the 6+% deposit interest that Anglo was paying a few years ago. I see from the bond doc that later10 posted that that particular bond was using EURIBOR, and here are some of those rates. http://www.euribor-rates.eu/euribor-charts.asp. That was a 3-month bond, longer term bonds probably give a lower return.

I only mention this to give the contrarian view... that a senior bond holder who invested in a bond paying far less than the deposit interest a bank was paying might have some justification in being aggrieved if the depositors suffered no losses while they did. Junior bond holders with higher rates are a different matter entirely.

In hindsight, what should have happened with Anglo was that it should have been frozen one night, with the depositors protected to the deposit guarantee and the bondholders and larger depositors taking whatever hit was necessary. Once you allowed all the depositors to escape without loss, you get onto extremely murky ethical and legal ground, if you then later want to hit the senior bondholders.

Ix.

djpbarry

dmclean1842 wrote: »

Enshrine in legislation that a bank can never lend more that 2.5 times a persons salary for a mortgage.

Why is this not happening???????????????????????????????

dmclean1842 wrote: »

Also I think that the max mortgage repayment length should 20 or 25 years. Can you rework with a 25 year mortgage?

If you were to go out onto the streets and try and sign people up to your idea (preferably those looking to buy their first property) of limiting mortgages as you describe above, how much support do you suppose you’d gather? Not much, I’m guessing.

A far more pertinent question than those you ask above is why were people prepared to burden themselves with mortgages that were several multiples of their annual salary, just because a bank offered?

K-9

djpbarry wrote: »

A far more pertinent question than those you ask above is why were people prepared to burden themselves with mortgages that were several multiples of their annual salary, just because a bank offered?

I understand what you are saying but a lot of people trust that banks have done checks and stress tested their application. A rather old fashioned idea from the 80's but there you are. That doesn't absolve the mortgage holders of responsibility, they have to put up with the consequences, unlike the banks in most cases.

thebman

The real problem with us limiting mortgages to such a level is that people outside the state can purchase Irish properties.

So it could lead to the situation where Irish people can't afford Irish houses.

userod

blackiebest wrote: »

Maybe you are fully aware of the situation. I must admit that I had no idea that last December bonds could be bought in Anglo which would yield up to 13% within six months.

I feel the average Joe, like me, will have had no idea that this is the case. I am outraged. Unlike you I do not think that my next move should be to get over it! I think that as people have to face the consequences from the governments decisions regarding the banking disaster that only then will they realize how duped we have been.

Yes I think that there will be lots of repeated shock and outrage as payments like this are made!

The reason the return was 13% was the risk of default on Anglos part was much greater in December. They decided it was worth the risk and they were right and now they are getting the payoff. That is how these products work. If Anglo default on these bonds then it will cost them much more than 13% to get money in the same market in future.

lmimmfn

i hope these serior bondholders enjoy my pension money

beeftotheheels

lmimmfn wrote: »

i hope these serior bondholders enjoy my pension money

You know that if you actually have a pension fund i.e. are private sector, these bondholders could be your pension fund? Either directly or through a hedge fund.

lmimmfn

beeftotheheels wrote: »

You know that if you actually have a pension fund i.e. are private sector, these bondholders could be your pension fund? Either directly or through a hedge fund.

i know yeah, but it wouldnt look so good if i said that lol :P

MadsL

later10 wrote: »

Can we not just get all of the outrage out and done with in one go?

Look, this government and the previous government have clarified their position on this, the EA/ EU leaders have, too, clarified their position, as have the IMF, the Commission and the ECB.

Do we really need to have this repeated shock and outrage every time a payment matures? It's like being in a goldfish bowl whereby there is a constant cycle of memory lapse and total shock.

Maybe we need a big display of one of these in College Green:

http://www.financedublin.com/debtclock.php