Unions call to not pay mortgages

sarumite

CiaranC wrote: »

Come on we are only talking about gob****e PAYE workers who got caught up in the bubble here, the likes of Drumm gets to live in a Mansion in Florida while the rest of you suffer.

Some were caught up, other fueled the bubble. The Drumm scenario is BS indeed. Its wrong that a person can transfer their wealth to avoid losing it in bankruptcy.

sarumite

Is mise le key wrote: »

Thats very relevant to the subject of this thread, there seems to be a hell of a lot of 'debt forgivness' around at the top & none at the bottom.

Thats nice populist spin, but the truth is that at the top people are finding loopholes in our archaic bankruptcy laws that are not available to us down here at the bottom. The debt is not being forgiven, their assets are being moved out of reach.

Anyone want to comment on the NY times article i posted as an impartial persepective on our current situation seeing as its all crazy if its coming from a Socialist,

http://www.nytimes.com/2011/01/16/magazine/16Europe-t.html?pagewanted=all

I read it, though it was along article. Anything of particular note that you would like a comment. To comment on such a long article without direction may require a new thread.

Is mise le key

sarumite wrote: »

I read it, though it was along article. Anything of particular note that you would like a comment. To comment on such a long article without direction may require a new thread.

Fair point, it did hit on many of the items we have discussed here over the course of the few pages, i will have to have a glance over it again to pick out a few parts but particularly noting this passage,

"If you still have your own currency, however, you wouldn’t have to go through the protracted pain of cutting wages: you could just devalue your currency — reduce its value in terms of other currencies — and you would effect a de facto wage cut.

Won’t workers reject de facto wage cuts via devaluation just as much as explicit cuts in their paychecks? Historical experience says no. In the current crisis, it took Ireland two years of severe unemployment to achieve about a 5 percent reduction in average wages. But in 1993 a devaluation of the Irish punt brought an instant 10 percent reduction in Irish wages measured in German currency. "

Also i nooted in there it referenced to belgium being in serious trouble also which was refused on this thread when i offered it, so we now have,

Greece
Ireland
Portugal
Spain
Italy
Belgium

All in the shít, do you really think it is still possible to maintain the status quo (i.e. the EU & Euro) with this many nations we know of up the creek?

Possible viable solution in this economists view,

"Debt restructuring: At the time of writing, Irish 10-year bonds were yielding about 9 percent, while Greek 10-years were yielding 12½ percent. At the same time, German 10-years — which, like Irish and Greek bonds, are denominated in euros — were yielding less than 3 percent. The message from the markets was clear: investors don’t expect Greece and Ireland to pay their debts in full. They are, in other words, expecting some kind of debt restructuring, like the restructuring that reduced Argentina’s debt by two-thirds.

Such a debt restructuring would by no means end a troubled economy’s pain. Take Greece: even if the government were to repudiate all its debt, it would still have to slash spending and raise taxes to balance its budget, and it would still have to suffer the pain of deflation. But a debt restructuring could bring the vicious circle of falling confidence and rising interest costs to an end, potentially making internal devaluation a workable if brutal strategy. "

Aregntina & Iceland,

"Argentina didn’t simply default on its foreign debt; it also abandoned its link to the dollar, allowing the peso’s value to fall by more than two-thirds. And this devaluation worked: from 2003 onward, Argentina experienced a rapid export-led economic rebound.
The European country that has come closest to doing an Argentina is Iceland, whose bankers had run up foreign debts that were many times its national income. Unlike Ireland, which tried to salvage its banks by guaranteeing their debts, the Icelandic government forced its banks’ foreign creditors to take losses, thereby limiting its debt burden. And by letting its banks default, the country took a lot of foreign debt off its national books.
At the same time, Iceland took advantage of the fact that it had not joined the euro and still had its own currency. It soon became more competitive by letting its currency drop sharply against other currencies, including the euro. Iceland’s wages and prices quickly fell about 40 percent relative to those of its trading partners, sparking a rise in exports and fall in imports that helped offset the blow from the banking collapse.
The combination of default and devaluation has helped Iceland limit the damage from its banking disaster. In fact, in terms of employment and output, Iceland has done somewhat better than Ireland and much better than the Baltic nations."

This really highlights that the doomsday predictions we are so used to hearing around here are all hyped up beyond reality.

sarumite

On the article itself.

I agree that if we had our own currency we could devalue, and prior to this raised interest rates when it was needed. However that is the argument for not going into the Euro. To leave the euro would mean devaluation, however it would be a disorderly devaluation. Furthermore our debts would still be nominated in Euro, so we would still have to pay back more. Obviously default is the option on the debts....

Which brings me to the second point on the article.

The point about argintina has been very much sugar coated. Their unemployment ballooned, people savings were worthless etc. If we think austerity is bad under the troika, Argentinians had it much worse.

Then there is iceland. We share the common occurence of a catastrophic banking collapse. However Ireland also has had a housing bubble collapse which has contributed to a primary deficit as well as increased unemployment. Many services industries that were based on the construction sector (we all remember "Mr Breakfast roll" man) are also struggling.

As long as we are running a primary deficit with no reasonable plan to balance the books overnight, then default is not really a viable option.

Godge

sarumite wrote: »

On the article itself.

I agree that if we had our own currency we could devalue, and prior to this raised interest rates when it was needed. However that is the argument for not going into the Euro. To leave the euro would mean devaluation, however it would be a disorderly devaluation. Furthermore our debts would still be nominated in Euro, so we would still have to pay back more. Obviously default is the option on the debts....

Which brings me to the second point on the article.

The point about argintina has been very much sugar coated. Their unemployment ballooned, people savings were worthless etc. If we think austerity is bad under the troika, Argentinians had it much worse.

Then there is iceland. We share the common occurence of a catastrophic banking collapse. However Ireland also has had a housing bubble collapse which has contributed to a primary deficit as well as increased unemployment. Many services industries that were based on the construction sector (we all remember "Mr Breakfast roll" man) are also struggling.

As long as we are running a primary deficit with no reasonable plan to balance the books overnight, then default is not really a viable option.

An oasis of sense

Is mise le key

There is a factor in this you are not seeing also, again i am answering this within a capitalist framework to offer you solutions on your terms, if we use the articles guidance on iceland,

At the same time, Iceland took advantage of the fact that it had not joined the euro and still had its own currency. It soon became more competitive by letting its currency drop sharply against other currencies, including the euro. Iceland’s wages and prices quickly fell about 40 percent relative to those of its trading partners, sparking a rise in exports and fall in imports that helped offset the blow from the banking collapse.

Now, were we to devalue as the Punt, what would that translate the €170 billion in exports we are to have in 2011?

FreudianSlippers

Is mise le key wrote: »

There is a factor in this you are not seeing also, again i am answering this within a capitalist framework to offer you solutions on your terms, if we use the articles guidance on iceland,

At the same time, Iceland took advantage of the fact that it had not joined the euro and still had its own currency. It soon became more competitive by letting its currency drop sharply against other currencies, including the euro. Iceland’s wages and prices quickly fell about 40 percent relative to those of its trading partners, sparking a rise in exports and fall in imports that helped offset the blow from the banking collapse.

Now, were we to devalue as the Punt, what would that translate the €170 billion in exports we are to have in 2011?

The problem with your point there, is inter alia, that the workers of this country want to have their cake and eat it too.
It's a hybrid of the worst parts of capitalism and the worst parts of socialism in this country at the moment and our workers would simply not accept a sharp decline in wages as they did in Iceland.

Is mise le key

FreudianSlippers wrote: »

The problem with your point there, is inter alia, that the workers of this country want to have their cake and eat it too.
It's a hybrid of the worst parts of capitalism and the worst parts of socialism in this country at the moment and our workers would simply not accept a sharp decline in wages as they did in Iceland.

But that really is only the case if the cost of living remains so high, if the cost of living also dropped this scenario would be acceptable,

Iceland’s wages and prices quickly fell

sarumite

Is mise le key wrote: »

There is a factor in this you are not seeing also, again i am answering this within a capitalist framework to offer you solutions on your terms, if we use the articles guidance on iceland,

Woah, hold your horses there, A "captitalist framework" is not a solution on my terms. I don't care what framework a solution is built upon as long as it is a viable, equitable and workable solution. Trying to pitch me as the "capitalis" v's you as the "socialist" is something I will not be drawn into. And anyway calling someone a capitalist and assuming they all share the same economic beliefs is a bit like calling someone a Christian and arguing they all share the same moral beliefs.

At the same time, Iceland took advantage of the fact that it had not joined the euro and still had its own currency. It soon became more competitive by letting its currency drop sharply against other currencies, including the euro. Iceland’s wages and prices quickly fell about 40 percent relative to those of its trading partners, sparking a rise in exports and fall in imports that helped offset the blow from the banking collapse.

Now, were we to devalue as the Punt, what would that translate the €170 billion in exports we are to have in 2011?

The icelandic government also raised interest rates to 18%, peoples savings took around about a 33% hit and according to wikepidia pensions are expected to shrink by 15-25%. Imports have been restricted. All this and Iceland still had mass emigration, high unemployment, requires loans from IMF, Norway and Denmark and is currently finding debt repayments difficult.

If we devalue our currency, we davalue our income but not our debt. If the plan is therefore to default on our debt, we need to sort out our primary deficit. So again, without a viable plan to balance the books overnight, default is still not a viable option and allowing our currency to devalue (something we would have no control over, unless you peg it to a currency and which point leaving the euro is a futile exercise) has its own inherent problems.

Is mise le key

sarumite wrote: »

Woah, hold your horses there, A "captitalist framework" is not a solution on my terms. I don't care what framework a solution is built upon as long as it is a viable, equitable and workable solution. Trying to pitch me as the "capitalis" v's you as the "socialist" is something I will not be drawn into. And anyway calling someone a capitalist and assuming they all share the same economic beliefs is a bit like calling someone a Christian and arguing they all share the same moral beliefs.

I aplogise unreservedly.

sarumite wrote: »

The icelandic government also raised interest rates to 18%, peoples savings took around about a 33% hit and according to wikepidia pensions are expected to shrink by 15-25%. Imports have been restricted. All this and Iceland still had mass emigration, high unemployment, requires loans from IMF, Norway and Denmark and is currently finding debt repayments difficult.

If we devalue our currency, we davalue our income but not our debt. If the plan is therefore to default on our debt, we need to sort out our primary deficit. So again, without a viable plan to balance the books overnight, default is still not a viable option and allowing our currency to devalue (something we would have no control over, unless you peg it to a currency and which point leaving the euro is a futile exercise) has its own inherent problems.

Right, what would it translate into if we were able to devalue to the tune mentioned of approx 40% with €170 billion in exports to the deficit?

It would plug a fairly large hole & with some more decisive actions you would then be in a position to default on the debts run up by the private banks, if we work within your guidelines.

sarumite

Is mise le key wrote: »

I aplogise unreservedly.

No worries

Right, what would it translate into if we were able to devalue to the tune mentioned of approx 40% with €170 billion in exports to the deficit?

It would plug a fairly large hole & with some more decisive actions you would then be in a position to default on the debts run up by the private banks, if we work within your guidelines.

Yes, though do you really think people will sit back and smile when they see their savings devalued by 40%. The cost of home grown produce would come down, though all imports (everything from oil to televisions to clothes) would now be be almost 40% more expensive. Pensions reduced, intereste rates going up (iceland can cope with that since they didn't have the housing collapse we had).

Thats if we assume the devaluation was 40%...like I said, we would not "able" to devalue. It's not something we could control....unless we peg our new currency to an existing currency....which means the whole point of the new currency becomes meaningless unless you said that wages were not being pegged (wage cut as opposed to wage devaluation).

Until I see specific on the "decisive action" we are stil left with a primary deficit.

feicim

sarumite wrote: »

Yes, though do you really think people will sit back and smile when they see their savings devalued by 40%.

They wouldn't smile, but hey the Irish have put up with every piece of crap thrown at them so far... so there would probably be a lot of grumbling and giving out on forums such as these, but thats probably about it though...

sarumite wrote: »

The cost of home grown produce would come down,

This could produce jobs here, that are currently unviable for investors as they can make a quicker buck in china or wherever. Irish produce would be 40% more competitive...

sarumite wrote: »

though all imports (everything from oil to televisions to clothes) would now be be almost 40% more expensive.

People just wouldn't buy as much crap. Or replace stuff that isn't broken etc. What would happen is people would think twice about buying stuff they don't really need. No bad thing really.

Bring on leaving the Euro, devaluing and starting the economy over again.

This could bring about the beginning of a new era that could be built on and improved upon over the years, IMO much better than the current scraping along/kicking the can aimlessly down the road waiting for some Europeans (who don't give a crap about the citizens of Ireland) to tell us what to do next.

There is currently no end in sight of this economic mess that we are unfortunate to be living through at the moment. Any plan is better than the one we have now. Which as everybody knows will not work out over the long term...

hmmm

feicim wrote: »

This could bring about the beginning of a new era that could be built on and improved upon over the years, IMO much better than the current scraping along/kicking the can aimlessly down the road waiting for some Europeans (who don't give a crap about the citizens of Ireland) to tell us what to do next.

Why? What's wrong with the current situation for the vast majority of people in Ireland that you want to wipe out 40% of their savings as an answer? The taxpayer is already paying for the bank bailouts, now you want to wipe out their savings as well because you have a plan that "might work".

Any plan is better than the one we have now. Which as everybody knows will not work out over the long term...

Says you, not me and not many others. The plan our government is following seems to be working just fine to me, it's better than the alternative you're offering where we throw ourselves off a cliff and hope something comes along to cushion the fall.

sarumite

feicim wrote: »

They wouldn't smile, but hey the Irish have put up with every piece of crap thrown at them so far... so there would probably be a lot of grumbling and giving out on forums such as these, but thats probably about it though...

I personally think having your savings reduced by 40% and almost everything in the shops apart from food increase by 40% would cause a lot more than grumbling.

This could produce jobs here, that are currently unviable for investors as they can make a quicker buck in china or wherever. Irish produce would be 40% more competitive...

So we race to the bottom? Not exactly offering young Irish people much in the way of prospects if the jobs we are looking to attract is grunt work. I don't doubt we could attract such jobs, though obviously the problems of places with cheap labour is the brain drain. I don't how ireland would fair differently.

People just wouldn't buy as much crap. Or replace stuff that isn't broken etc. What would happen is people would think twice about buying stuff they don't really need. No bad thing really.

People like crap. They like their laptops, televisions,ipod, refrigerators, microwaves, cars etc. Businessess also need this crap to operate. We like our crap medicine when we feel crap. We like our crap heating oil in the winter when its cold. People really like their imported crap.

Bring on leaving the Euro, devaluing and starting the economy over again.

This could bring about the beginning of a new era that could be built on and improved upon over the years, IMO much better than the current scraping along/kicking the can aimlessly down the road waiting for some Europeans (who don't give a crap about the citizens of Ireland) to tell us what to do next.

There is currently no end in sight of this economic mess that we are unfortunate to be living through at the moment. Any plan is better than the one we have now. Which as everybody knows will not work out over the long term...

Populist rubbish. Starting the economy over again might be a good sound bite, but not much else.

Godge

feicim wrote: »

They wouldn't smile, but hey the Irish have put up with every piece of crap thrown at them so far... so there would probably be a lot of grumbling and giving out on forums such as these, but thats probably about it though...



This could produce jobs here, that are currently unviable for investors as they can make a quicker buck in china or wherever. Irish produce would be 40% more competitive...



People just wouldn't buy as much crap. Or replace stuff that isn't broken etc. What would happen is people would think twice about buying stuff they don't really need. No bad thing really.

Bring on leaving the Euro, devaluing and starting the economy over again.

This could bring about the beginning of a new era that could be built on and improved upon over the years, IMO much better than the current scraping along/kicking the can aimlessly down the road waiting for some Europeans (who don't give a crap about the citizens of Ireland) to tell us what to do next.

There is currently no end in sight of this economic mess that we are unfortunate to be living through at the moment. Any plan is better than the one we have now. Which as everybody knows will not work out over the long term...

Mad, mad, mad.


We will all just pick potatoes and get on with it.

dvpower

feicim wrote: »

Bring on leaving the Euro, devaluing and starting the economy over again.

Can I have your stuff?

feicim

Godge wrote: »

Mad, mad, mad.


We will all just pick potatoes and get on with it.

Maybe it is mad. I would define the goverment borrowing 10's of billions it can't ever afford to pay back as mad... maybe you feel this is a sane option?


The Irish economy will not create jobs with the governments so called plan. There is a deficit of a couple of hundred thousand jobs as we speak. Until this gets sorted the economy is only going to slowly sink into oblivion. These jobs will never come as long as Ireland is uncompetitive on a global scale. Devaluing would be a step in the right direction.

At least job creation would be a possibility if we had our own currency to devalue.

I can see why the thought of devaluing would frighten all the middle class who are lucky enough to have a job.

But the 400k+ without jobs and the fresh college graduates coming out of college who are joining them in the dole queue might see things a bit differently.

PS: Sarumite, I don't know why you think I would include medicine and heating oil under the heading of "crap" that the Irish could learn to live without... I would have thought an intelligent person such as yourself could have figured out I was talking about the many unnecessary purchases the average (Irish) person makes.

North_West_Art

I know at least 10 people who have admitted that they will probably never pay off their mortgages, one girl bought an apartment in Stillorgan for 570,000 back in 2005, her work hours have halved and she has taken a pay cut, her ex partner has left the country, she has been on interest only for the last 10 months.. you dont have to be Einstein to figure out the repayments on 570,000 over 30 years @ 5%
and what your chances of paying it back in your lifetime on €350 per week and be able to live as well..
so many people, not by choice, have been forced into an impossible position

sarumite

feicim wrote: »

Maybe it is mad. I would define the goverment borrowing 10's of billions it
PS: Sarumite, I don't know why you think I would include medicine and heating oil under the heading of "crap" that the Irish could learn to live without... I would have thought an intelligent person such as yourself could have figured out I was talking about the many unnecessary purchases the average (Irish) person makes.

Yes, but need to factor in the cost of Medicine and heating oil etc since we import those. They are the kind of stuff that people need and bumping them up in price by 40% isn't going to solve the problem.

Icepick

Guys on €150,000 a year said what?

dvpower

North_West_Art wrote: »

I know at least 10 people who have admitted that they will probably never pay off their mortgages, one girl bought an apartment in Stillorgan for 570,000 back in 2005, her work hours have halved and she has taken a pay cut, her ex partner has left the country, she has been on interest only for the last 10 months.. you dont have to be Einstein to figure out the repayments on 570,000 over 30 years @ 5%
and what your chances of paying it back in your lifetime on €350 per week and be able to live as well..
so many people, not by choice, have been forced into an impossible position

We could introduce multigenerational mortgages for these cases - it would be a bit like renting but with much better tenure.

MagicSean

I spoke to someone yesterday who is having trouble meeting their mortgage payments. She rang the provider and asked them if she could reduce the payments to €1000 p/m for a year or so. They told her that they will only negotiate payments if someone is 6 months in arrears. They are under no obligation to negotiate payments. What kind of ridiculous policy is that? Why would you encourage people to go into arrears? We as a country are bailing them out for billions yet all we are getting in return is increased interest rates and poor attitude.

I would never have been a fan of the default option but at this stage I am now struggling to see the downside to it.

North_West_Art

dvpower wrote: »

We could introduce multigenerational mortgages for these cases - it would be a bit like renting but with much better tenure.

We?

george tobin

Caoimhín wrote: »

Jesus wept. What bollix, people borrowed money to buy expensive houses and now want the rest of us to let them off the hook. Write off the mortgage but keep the house? Over my dead body buddy.

i borrowed money to buy my house average price is it my fault things went pear shaped?dont call people you dont know buddy,fool.

dvpower

North_West_Art wrote: »

We?

Yes We.

The state would provide the regulatory framework. The banks would provide the products. The mortgage holders would choose the products

carm

Caoimhín wrote: »

Jesus wept. What bollix, people borrowed money to buy expensive houses and now want the rest of us to let them off the hook. Write off the mortgage but keep the house? Over my dead body buddy.

george tobin wrote: »

i borrowed money to buy my house average price is it my fault things went pear shaped?dont call people you dont know buddy,fool.

You see George, Caoimhín and the other people on the forum like Caoimhín don't want to see people who took out mortgages get anything from "their own" pockets. However, many of them haven't complained at all when it came to the likes of the bankers, the politicians, the regulator, the city councils, the landlords, the estate agent vultures and all the other thousands of money-grabbing people of Ireland through the good times.

No, no. Not a word. But when it comes to your average couple or family who may have wanted to put a roof over their heads so they wouldn't have to rent and pay someone else's mortgage, they're ALL on here now screaming like banshees. Because people like Caoimhín seem to think that all those who took mortgages out were those living the high life, buying the latest cars or SUVs, going on 15 luxury holidays a year along with all the extra plastic pretentious crap that comes with the 21st century.

Caoimhín it seems hasn't really thought things through with regard to "the after-effects" of those he doesn't want getting some form of assistance from the state with regard to the mortgage mess. They haven't figured out that the same mortgage owners, should they lose their homes without any assistance, will be looking for rent supplements, waiting for social housing, many looking for higher payments from the state than they may have been requesting to help them cover their mortgage in the first place.

Over your dead body indeed Caoimhín.

As a matter of interest, I don't know anyone who wants to see their entire mortgage written off. Does anyone? I do think people are looking for assistance, which has been there for the banks, but not for the poor sod left to pay their mortgages when the jobs aren't there to cover them.

dvpower

carm wrote: »

As a matter of interest, I don't know anyone who wants to see their entire mortgage written off. Does anyone? I do think people are looking for assistance, which has been there for the banks, but not for the poor sod left to pay their mortgages when the jobs aren't there to cover them.

We could have a solution to restructure the loan over a longer term. Or sell the property and carry the remaining debt.
There are a number of solutions before we should be calling on already hard pressed taxpayers to carry the burden.

carm

dvpower wrote: »

We could have a solution to restructure the loan over a longer term. Or sell the property and carry the remaining debt.
There are a number of solutions before we should be calling on already hard pressed taxpayers to carry the burden.

Absolutely agree dvp. Whatever can be done between the mortgage holder and the bank should be done as best they both can agree. Whether it's a longer term mortgage, interest only payments, selling the house (if they're extremely lucky). Then there's the governments up and coming Deferred Interest Scheme which I believe most banks/building societies have implemented or are in the process of implementing.

However many offered solutions do mean a certain cost to the taxpayer, somewhere along the way.

lambox

But why o why are our banks allowed to keep uping their mortguage rates off their own backs.Every quater of a precent is utterly devastating and all done before the ECB started to do the same.In any other country these sham banks would be razed to the ground and rightly so.Docile gobsh!te Irish fools.Me included.

Is mise le key

sarumite wrote: »

Populist rubbish. Starting the economy over again might be a good sound bite, but not much else.

Populism is defined by the Cambridge dictionary as,

"political ideas and activities that are intended to represent ordinary people's needs and wishes".

How is beginning the economy over again rubbish?,

You see continuing the endless line of credit from the taxpayers to the major global bankers in order to maintain the status quo sounds like rubbish to me, seeing as we do not have a functioning economy, banks or employment.

Icepick wrote: »

Guys on €150,000 a year said what?

That guys on less income to cover their negative equity properties, should go on a mortgage strike (Not refuse to pay at all or have written off completley), to force the banks to change their position on reposessions etc seeing as they have been 100% funded to remain in existence by the taxpayers.