Bailout Twas a mistake - Alan Ahearne

Well the format was so he says here:


http://www.rte.ie/news/2012/0611/100bn-spanish-bank-deal.html

Dr Alan Ahearne says format of Irish bailout 'a mistake'

he said it would have been better if the bailout funds had gone directly into the Irish banks and not been given to the State to put into the banks

He reckons now, after all this time we got a raw deal.

So what now? And more worryingly why havent FG & Labour been doing anything differently to the way FF & The Greens did?
Seems to me something stinks.

Alan got his cut of it all though. I wish he had some suggestions at least.

So do we have any hand to play now?

Farmer Pudsey

Now he only relises it a lot of us ordinary plonkers knew we were going down the drain before the bail out.

This is a bit rich if you look at it a few economists have being fairly right all the time they may have had odd slips but there forecasting has been farily accurate but the givernment have not wanted to listen. These economists are in general forcasting the break up of the euro and a massive default in government bonds by the PIIGS unless there is burden sharing by the EU. They question the stability of a system where we continue to load banking debt onto national debt of bankrupt countries where personal debt is very high.

The reality is that we are at the endgame now and Aherne knows it. The Germans have to understand that if
1 If we default they loose
2 If our banks go bust they loose
3 If we continue without growth they loose
4 If the Euro collapse they loose
5 If the euro saty's put they loose

What the germans have failed to understand from the start if we loose they loose as well.

johngalway

Farmer Pudsey wrote: »

What the germans have failed to understand from the start if we loose they loose as well.

But if we loose, we loose worse than anyone else, Ze Germans know this. Needs a lot of consideration and a lack of rash action.

Farmer Pudsey

johngalway wrote: »

But if we loose, we loose worse than anyone else, Ze Germans know this. Needs a lot of consideration and a lack of rash action.

We have lost so much already it is the countries that have taken little or no hit to their economies/national/bank debt that have more to loose than us. The old farming saying you cannot get blood from a turnip rings true here. If we and the rest of the piigs have to default it is the germans that have to pay they will also loose a lot of export markets.

When Alan Aherne is stating that the bailout was a mistake he is really saying that the ECB/EMF way of managing this crisis is not working and that the endgame is in sight. If we have to exit the euro will we have to devalue compared to the German euro or will germany have to revalue compared to the irish punt.

The government will have to balance its books so there will have to be like there should have been all along 20-30% social welfare cuts, minor wage cuts to lowerpaid CS staff and major cuts to higher paid CS staff and politicians as raising taxes will not be an option.

As the man said the game is up but the Gemans do not understand that yet it is too late to sort it out now. All along there should have been a bit of give and take but Merkosy did not understand it like Thatcher at the end of he career.

Dirk Gently

*lose

apologies, it had to be done.

johngalway

Farmer Pudsey wrote: »

When Alan Aherne is stating that the bailout was a mistake he is really saying that the ECB/EMF way of managing this crisis is not working and that the endgame is in sight. If we have to exit the euro will we have to devalue compared to the German euro or will germany have to revalue compared to the irish punt.

I'll start off by saying I have lost quite a lot of my income since the start of this recession/depression, so I am as affected as a lot of other people.

If we exit the Euro we'll get slaughtered. We'll owe our debts in Euro's and have to pay them in highly devlaued Punts.

Farmer Pudsey wrote: »

The government will have to balance its books so there will have to be like there should have been all along 20-30% social welfare cuts, minor wage cuts to lowerpaid CS staff and major cuts to higher paid CS staff and politicians as raising taxes will not be an option.

The budget deficit is the biggest problem in my view. Had we no budget deficit at the time of the bank guarantee we could have told the banks to PFO, and that would have been the thing to do, then.

Now though we're caught between the proverbial rock & hard place. The money we need to pay our way comes with the condition that we save the bank, pay the bondholders and stem the spread of contagion.

In my view the things you describe in the above paragraph do need to happen. But, not suddenly, rather over a much longer length of time to lessen the shock. If we suddenly turn around and slash and burn in Economic turns we'll start to resemble Greece very, very quickly in social terms as services won't be there and people will be even worse off than they are now.

I don't like it, but we need to work through this while reforming the country at the same time. I'd rather tell the world and it's bankers to PFO, but I don't believe it's a good thing to do to this country or it's people.

antoobrien

johngalway wrote: »

The budget deficit is the biggest problem in my view. Had we no budget deficit at the time of the bank guarantee we could have told the banks to PFO, and that would have been the thing to do, then.

The budget deficit is the real problem, the banks are just a sideshow when it comes to current spending. The fact that the banking storm and the economic storm hit at the same time is a just a bad co-incidence for us. Even if we had not had to put money into the banks we'd still have to make the budgetary adjustments we are making and we'd have no scapegoat to blame.

If the banking problem had happened in 2007 instead of 2008, telling the banks to PFO would have been a disaster. Just look at what happened in England with Northern Rock.

Farmer Pudsey

johngalway wrote: »

If we exit the Euro we'll get slaughtered. We'll owe our debts in Euro's and have to pay them in highly devlaued Punts.

I just do not know what part of "blood from a turnip" that people cannot understand.

You can only pay back what you can pay back not what you owe how people can equate us owe money in euro's if the f##king thing is gone the Greeks will not pay back euro's as they cannot affort to.

christmas2012

why is he only coming out with this now?

Scofflaw

Most of the money we put into the banks had been put in before the troika bailout - the recapitalisation under the bailout was €16.5bn:

As reported at the Third Review, the €24 billion recapitalization of the domestic banks was completed at the end of July, with the exception of operations for €0.5 billion which are expected to be completed by end-2011. The total budgetary cost was limited to €16.5 billion through participation by private investors and liability management exercises on subordinated debt.

And of that €16.5bn, €10bn was from the NPRF, and the other €6.5bn from the exchequer, which leads to a slightly surprising conclusion - absolutely no bailout money has been used for the banks.

Here's a handy little table of the bank recapitalisation costs to the State:

€bn |AIB/EBS |BoI |IL&P |IBRC (Anglo/INBS) |Total
Government preference Shares (2009) — NPRF |3.5 |3.5* |— |— |7.0
Capital contributions (with Promissory Notes as consideration) /Special Investment Shares (2010) — Exchequer ** |0.9 |— |— |30.7 |31.6
Ordinary Share Capital (2009) — Exchequer |— |— |— |4.0 |4.0
Ordinary Share Capital (2010) — NPRF |3.7 |— |— |— |3.7
Total pre-PCAR 2011 (A) |8.1 |3.5 |0 |34.7 |46.3
|||||
PCAR 2011: |||||
Capital from Exchequer*** |3.9 |— |2.7 |— |6.5
NPRF Capital |8.8 |1.2 |— |— |10.0
Total PCAR (B) |12.7 |1.2 |2.7 |— |16.5
Total Cost of Recap for State (A) + (B) |20.7 |4.7 |2.7 |34.7 |62.8

Source: http://debates.oireachtas.ie/dail/2012/03/29/00077.asp

christmas2012 wrote: »

why is he only coming out with this now?

The Spanish bailout, presumably. As to why...Fianna Fáil have been increasingly bold recently in revising the history of the crisis in their favour, and Ahearne is rather visibly pointing the finger away from the government:

“It was a mistake. The Irish authorities in negotiations for the programme did want the new injections into the Irish banks to go directly, not to go to the Irish state,” said Mr Ahearne.

I don't recall any mention at the time of the government wanting that, but perhaps someone else can provide one.

cordially,
Scofflaw

johngalway

antoobrien wrote: »

If the banking problem had happened in 2007 instead of 2008, telling the banks to PFO would have been a disaster. Just look at what happened in England with Northern Rock.

I believe if we had been in a position to be able to cover our costs re the day to day running of the country then telling the banks to PFO would have been the right thing to do. After all, they were involved in what was basically gambling, responsible lending hadn't gone out the window, it had been shot out of a cannon from the rooftop. I would have agreed with letting them bear their own losses had the country been in a position to pay it's own way. However, we weren't so that's that.

Farmer Pudsey wrote: »

I just do not know what part of "blood from a turnip" that people cannot understand.

You can only pay back what you can pay back not what you owe how people can equate us owe money in euro's if the f##king thing is gone the Greeks will not pay back euro's as they cannot affort to.

Germany only recently finished up paying it's WW2 war reparations, think about that. Look at how they have developed as a country since, there are many ways of restructuring and repaying debt, changing the debt to one of a long term nature, whittling down interest rates and negotiating everything often - including looking for ways of writing off debt here and there - can change the situation a lot.

The Greeks are in a very different position to Ireland, which is why you see soup kitchens, protests, and far right politicians hitting women on national TV.

antoobrien

johngalway wrote: »

I believe if we had been in a position to be able to cover our costs re the day to day running of the country then telling the banks to PFO would have been the right thing to do. After all, they were involved in what was basically gambling, responsible lending hadn't gone out the window, it had been shot out of a cannon from the rooftop. I would have agreed with letting them bear their own losses had the country been in a position to pay it's own way. However, we weren't so that's that.

Had we told the banks to go away they would have collapsed - taking about €400bn of deposits (including current accounts) with them. The government would have had to shell out for the deposit guarantee at the time of €20k per account.

Allowing for 2m personal current bank accounts the government would have been hit for up to €20 bn - before we get to deposit, small business and corporate accounts based here. It'd also have taken the credit unions with them because they have agreements with banks for a lot of their facilities.

We'd still have had to open up the NPRF in order to cover that gap, since we had a deficit of €1.6bn in 2007 (signs of the crash already starting).

Scofflaw

antoobrien wrote: »

Had we told the banks to go away they would have collapsed - taking about €400bn of deposits (including current accounts) with them. The government would have had to shell out for the deposit guarantee at the time of €20k per account.

Allowing for 2m personal current bank accounts the government would have been hit for up to €20 bn - before we get to deposit, small business and corporate accounts based here. It'd also have taken the credit unions with them because they have agreements with banks for a lot of their facilities.

We'd still have had to open up the NPRF in order to cover that gap, since we had a deficit of €1.6bn in 2007 (signs of the crash already starting).

Hadn't the government just increased the level of the Deposit Guarantee to €100k?

cordially,
Scofflaw

Farmer Pudsey

I think that a lot of people do not understand I believe that Alan Aherne has come to understand that we cannot repay the money that is owed and that we should not have been expected to pick up the banking costs. If the banks (Angle and Irish nationwide in particular) had gone into examinership we could have arranged a managed solution where the bondholders picked up some of the cost.

There is a section of society out there in Ireland and in Europe that use phrases like Moral Hazzard, we did not borrow the money, people/countries have to pay there debts. You can only pay you debts if you can afford to.

We have two problems. The current budget deficit which the government fail understant that we cannot balance with tax increase and capital expenditure cuts alone. The national debt which has been increased by the funding of the banks.

It has now got to the stage that we all in Ireland/Europe will sink or swim togeather. If Germany, France and other euro countries are not willing to put there hands in there pockets and they are not we will have to default.

Austerity is not sustainable longterm especially when you have high levels of personel debt. The amount of buisness failure is starting to rise again. Also the self employed are starting to reach the end of there savings.

Just like after WWI the allies put a unsustainable debt burden on Germany that caused WWII the richer countries in Europe are trying to put an unstainable debt burden on the PIIGS and the outcome may not be pretty for either side.

coolshannagh28

The ship must be sinking when Ahearne has bailed out. How long until we are trading in punts and will the Dail rise for the summer this year ?

Scofflaw

Farmer Pudsey wrote: »

I think that a lot of people do not understand I believe that Alan Aherne has come to understand that we cannot repay the money that is owed and that we should not have been expected to pick up the banking costs. If the banks (Angle and Irish nationwide in particular) had gone into examinership we could have arranged a managed solution where the bondholders picked up some of the cost.

There is a section of society out there in Ireland and in Europe that use phrases like Moral Hazzard, we did not borrow the money, people/countries have to pay there debts. You can only pay you debts if you can afford to.

We have two problems. The current budget deficit which the government fail understant that we cannot balance with tax increase and capital expenditure cuts alone. The national debt which has been increased by the funding of the banks.

It has now got to the stage that we all in Ireland/Europe will sink or swim togeather. If Germany, France and other euro countries are not willing to put there hands in there pockets and they are not we will have to default.

Austerity is not sustainable longterm especially when you have high levels of personel debt. The amount of buisness failure is starting to rise again. Also the self employed are starting to reach the end of there savings.

Just like after WWI the allies put a unsustainable debt burden on Germany that caused WWII the richer countries in Europe are trying to put an unstainable debt burden on the PIIGS and the outcome may not be pretty for either side.

As I pointed out earlier, the bank bailout money supplied by the troika amounts to very little, so I somehow doubt Ahearne is actually saying any of that.

[EDIT]Sorry - none of the bailout money has been used for the banks.[/EDIT]

cordially,
Scofflaw

Farmer Pudsey

coolshannagh28 wrote: »

The ship must be sinking when Ahearne has bailed out. How long until we are trading in punts and will the Dail rise for the summer this year ?

Will not be long the legislation is drafted and the plates for the printing press have been made it only a matter of sloting them in and away we go.

The big issue is will we have deflation or inflation when it happens.

Farmer Pudsey

Scofflaw wrote: »

As I pointed out earlier, the bank bailout money supplied by the troika amounts to very little, so I somehow doubt Ahearne is actually saying any of that.

cordially,
Scofflaw

Them what was he saying or was he just breaking wind. When he utters a statement like that he must have a good reason to state it and he must be very unhappy with the situtation the country is in. He must also think that we are up the swanee.

Scofflaw

Farmer Pudsey wrote: »

Them what was he saying or was he just breaking wind. When he utters a statement like that he must have a good reason to state it and he must be very unhappy with the situtation the country is in. He must also think that we are up the swanee.

Alternatively, and somewhat cynically, it's part of Fianna Fáil's current and ongoing revision of recent history and repositioning.

Because the facts are as stated - none of the bailout money was used to recapitalise the banks, which makes Dr Ahearne's point rather lightweight to be a "why we're up the creek" explanation.

And it's worth thinking about the fact that that's the case - as the government puts it:

However, the cost of bank recapitalisation to date has been met from our existing resources – cash reserves and the NPRF.

Source: http://debates.oireachtas.ie/dail/2012/06/06/00097.asp

cordially,
Scofflaw

GSF

Farmer Pudsey wrote: »

You can only pay you debts if you can afford to.

We have two problems.

You have a third too - a credibility problem. Living outside of Ireland, I hear reports of MPs evading tax with no consequences, bankrupts attending Euro 2012 and staying in €500 per night hotels and more importantly UNREFORMED public services where senior management are still paid huge salaries. For better or worse few people abroad are really convinced that Ireland is as hard up as you make it out to be.

Farmer Pudsey

GSF wrote: »

You have a third too - a credibility problem. Living outside of Ireland, I hear reports of MPs evading tax with no consequences, bankrupts attending Euro 2012 and staying in €500 per night hotels and more importantly UNREFORMED public services where senior management are still paid huge salaries. For better or worse few people abroad are really convinced that Ireland is as hard up as you make it out to be.

I agree with you completely the dail cost 110 million a year I think, I am not sure if it includes the Seanad. I also agree with the rest of your post. And also I might add that top CS are over paid. However even if all this was corrected, it would only save 3-400 million. It is a lot of money and it should be done, so should the CS reform and mid level CS pay cuts. However after all that we would still be broke, credibility problem or not.

I have to assume Alan Aherns is looking at it dispassionatly and sees that the game is up which is my opinion as well.

bbam

Farmer Pudsey wrote: »

Will not be long the legislation is drafted and the plates for the printing press have been made it only a matter of sloting them in and away we go.

The big issue is will we have deflation or inflation when it happens.

You seem sure about the legislation and the plates for printing Punt. Do you have a link to your source or where is the information coming from. I'm not really doubting you, just trying to work out how reliable the information is.

antoobrien

Scofflaw wrote: »

Hadn't the government just increased the level of the Deposit Guarantee to €100k?

cordially,
Scofflaw

I think it was part of the bank guarantee of September 2008. The scenario is that we had a fiscal surplus (so events took place a year or two earlier), so could say to the banks no we're not going to help.

Since the extension of cover was part of the bank guarantee I'm ignoring it on the basis that it would have the government's role much more expensive (5 times the potential liability).

washman3

Ahearne is now saying exactly what Morgan Kelly and McWilliams have been saying since day 1 of this crisis.!!!

Sand

GSF wrote: »

You have a third too - a credibility problem. Living outside of Ireland, I hear reports of MPs evading tax with no consequences, bankrupts attending Euro 2012 and staying in €500 per night hotels and more importantly UNREFORMED public services where senior management are still paid huge salaries. For better or worse few people abroad are really convinced that Ireland is as hard up as you make it out to be.

Yup - Ireland is hard-up because the Insiders have defined a set of reforms and cutbacks which are entirely off the table, in the Croke Park agreement. Any serious effort to address out of control spending in social welfare or health is met with howls about the fate of the "most vulnerable in society" who on close examination seem to be mainly the vested interests and politically connected. Between it all, the vast majority of Irish expenditure is ring-fenced at unsustainable levels.

coolshannagh28

We have been living beyond our means for 10 years or more ,what is now required is a 30% cut in expenditure or a devaluation of similar amount . It's obvious to a blind man that our huge leap in standard of living in the last decade is not now sustainable .
The fact that Ahearne and Bacon have crawled out of the woodwork following Elderfields capitulation on the banks last week would indicate that something very nasty is in the offing .
Honohan will probably wield the knife .
Again !

Farmer Pudsey

coolshannagh28 wrote: »

We have been living beyond our means for 10 years or more ,what is now required is a 30% cut in expenditure or a devaluation of similar amount . It's obvious to a blind man that our huge leap in standard of living in the last decade is not now sustainable .
The fact that Ahearne and Bacon have crawled out of the woodwork following Elderfields capitulation on the banks last week would indicate that something very nasty is in the offing .
Honohan will probably wield the knife .
Again !

I would not count Aherne and Bacon in the same breath. Aherne had been on one side of the fence and has changed side to be McWilliams/Kelly/ and Constantine.
Bacon was a hired gun that has deserted ship and has been rehired his report has been bought and payed for by another party and he should crawl back into the hole he came from.

I do not think we need or will get a 30% devaluation it will be around 20% it will give the economy the injection that we need to start rolling along.

There might be time for one last holiday abroad in France before it gets too expensive, then again they may have to devalue as well. However we still will have Spain, Portagul, Italy and of course it will be very cheap to holiday in Greece though it might be a bit on the dodgy side unless the generals come to power. But I think that is the way the Germans want it.

coolshannagh28

Farmer Pudsey wrote: »

coolshannagh28 wrote: »

We have been living beyond our means for 10 years or more ,what is now required is a 30% cut in expenditure or a devaluation of similar amount . It's obvious to a blind man that our huge leap in standard of living in the last decade is not now sustainable .
The fact that Ahearne and Bacon have crawled out of the woodwork following Elderfields capitulation on the banks last week would indicate that something very nasty is in the offing .
Honohan will probably wield the knife .
Again !

I would not count Aherne and Bacon in the same breath. Aherne had been on one side of the fence and has changed side to be McWilliams/Kelly/ and Constantine.
Bacon was a hired gun that has deserted ship and has been rehired his report has been bought and payed for by another party and he should crawl back into the hole he came from.

I do not think we need or will get a 30% devaluation it will be around 20% it will give the economy the injection that we need to start rolling along.

There might be time for one last holiday abroad in France before it gets too expensive, then again they may have to devalue as well. However we still will have Spain, Portagul, Italy and of course it will be very cheap to holiday in Greece though it might be a bit on the dodgy side unless the generals come to power. But I think that is the way the Germans want it.

It's an ill wind .....

antoobrien

coolshannagh28 wrote: »

We have been living beyond our means for 10 years or more

Then explain how we ran surpluses for most of the previous decade?
year|Budget +/-
2001 | +0.65bn
2002 | +.095bn
2003 | -0.98 bn
2004 | +0.33bn
2005 | -0.6bn
2006 | +2.2bn

creedp

antoobrien wrote: »

Then explain how we ran surpluses for most of the previous decade?
year|Budget +/-
2001 | +0.65bn
2002 | +.095bn
2003 | -0.98 bn
2004 | +0.33bn
2005 | -0.6bn
2006 | +2.2bn

We ran surpluses becasue we werecollecting income via stamp duties that were not sustainable, thierng lies the structural deficit problem. If we excluded stanp duties from the income side during those years we would have either been either balancing our books or running deficits also. That's why we are where we are.

antoobrien

creedp wrote: »

We ran surpluses becasue we werecollecting income via stamp duties that were not sustainable, thierng lies the structural deficit problem.

Not the same thing - living beyond your means is spending money you don't have (i.e. now) vs spending money you do have while you have it.

N.B. Not saying that what happened was prudent, just trying to point out the contradictions inherent in some of the rather ill thought rants that are going on at the mo.

kennyb3

antoobrien wrote: »

Then explain how we ran surpluses for most of the previous decade?
year|Budget +/-
2001 | +0.65bn
2002 | +.095bn
2003 | -0.98 bn
2004 | +0.33bn
2005 | -0.6bn
2006 | +2.2bn

You conveniently quoted 6 years - what about the next 4? What is the net result of those years? What about our national debt for those 10 years?

It's easy to manipulate statistics.

coolshannagh28

antoobrien wrote: »

creedp wrote: »

We ran surpluses becasue we werecollecting income via stamp duties that were not sustainable, thierng lies the structural deficit problem.

Not the same thing - living beyond your means is spending money you don't have (i.e. now) vs spending money you do have while you have it.

N.B. Not saying that what happened was prudent, just trying to point out the contradictions inherent in some of the rather ill thought rants that are going on at the mo.

During those years we had a credit -consumer - property bubble , all tax takes rose allowing the pro cyclical govt to to pay us money we didn't deserve . Our standard of living rose as a result and we have spent the last 5 years trying to correct this .however trying to lower expectations is a very arduous process as we are now finding out to our cost .
Also in light of recent revelations on accounting standards in the D O F I would be very sceptical about your figures ,I recall at the time a lot of controversy re this issue .
On the question of rants all I will say is that myself and hundreds of thousand others are sick sore and tired of what's happening in this country and if we take our frustrations out here maybe you will excuse us .

antoobrien

kennyb3 wrote: »

You conveniently quoted 6 years - what about the next 4? What is the net result of those years? What about our national debt for those 10 years?

It's easy to manipulate statistics.

It's not as if I haven't posted the deficits for 3 of those 4 before (2007 was 1.6bn deficit iirc - the others go search you'll find them).

The point was to show that we hadn't been living beyond out means for most of the past decade.

And again - i'm not saying what happened in 2001-2006 should be regarded as fiscally prudent, but if people are going to make a point they should make it clearly (something I'm guilty of not doing properly on occasion).

K-9

creedp wrote: »

We ran surpluses becasue we werecollecting income via stamp duties that were not sustainable, thierng lies the structural deficit problem. If we excluded stanp duties from the income side during those years we would have either been either balancing our books or running deficits also. That's why we are where we are.

The ideal would have been less of a dependence on property related tax revenue like Stamp Duty, CGT, VAT etc. and higher Income Taxes, smaller Tax Credits and more of a reigning in of expenditure. Of course the whole problem is we are trying to do that in a recession worldwide and the whole Euro crisis on top of it, unpopular steps anyway, made even worse by the banks and the seeming inability of Euro leaders to grasp the problems of the currency.

Farmer Pudsey

Lads
a lot of posters are dealing in symantics here, not just in this thread but also in threads dealin with no money to banks from bailout, IMF tax increses,banking union and I could quote another 6-10 that are not quite active at present.

The reality is that we are at the endgame from what Aherne and now Soras/Legarde have come out and said.

Because of political cowardice by at the start FF/PD/greens and now by FG/Labour and the failure of vested intrests to lead over the years the unuons, IBEC and CIF we are where we are. The present government it looks like hobbled the ERSI like the previous governments hobbled voices in the Dept Of finance, central bank etc when they did nit like what was said.

This is repeated accross Europe in Italy Spain etc but also in France Germany and Holland. I cannot see how the Euro can manage to stay in place. The markets do not believe that Spain and Italy will take the amount of pain we too and they will not.

The only thing that has kept a lid on it here is our generous social welfare system to the unemployed. It amazes me to see that the upper echelons of civil servants and politicians are like Marie Antoinette "let them eat cake" is there attitude. The person that is working has taken severe punishment over the last four years and is now at the pin of there collor as is the small self employed worker and the small buisness.

We can all quote stastics, show charts and blame developers and bankers but at the end of the day a lot is down to political cowardice and the way the ERSI report was withdrawm shows it

antoobrien

Farmer Pudsey wrote: »

We can all quote stastics, show charts and blame developers and bankers but at the end of the day a lot is down to political cowardice and the way the ERSI report was withdrawm shows it

Anybody seen/have a copy of this report?

Edit - linked by RTE: http://www.rte.ie/news/2012/0612/esri_report.pdf

kennyb3

antoobrien wrote: »

Anybody seen/have a copy of this report?

Namawinelake

GSF

antoobrien wrote: »

Not the same thing - living beyond your means is spending money you don't have (i.e. now) vs spending money you do have while you have it.

N.B. Not saying that what happened was prudent, just trying to point out the contradictions inherent in some of the rather ill thought rants that are going on at the mo.

Ireland should have been saving all of the one off stamp duty/ VAT windfall to fund the effects of negative equity/ private debt overhang 5 years down the road.

antoobrien

GSF wrote: »

Ireland should have been saving all of the one off stamp duty/ VAT windfall to fund the effects of negative equity/ private debt overhang 5 years down the road.

20/20 hindsight.

How much of the bonuses that you earned (or your parents if you're too young) save during that time?

kennyb3

antoobrien wrote: »

20/20 hindsight.

How much of the bonuses that you earned (or your parents if you're too young) save during that time?

Not hindsight - prudence.

Plenty of people didn't go mad during the boom.

antoobrien

kennyb3 wrote: »

Not hindsight - prudence.

Plenty of people didn't go mad during the boom.

So answer the question - how much "prudence" did you (or your family) practice?

kennyb3

antoobrien wrote: »

So answer the question - how much "prudence" did you (or your family) practice?

Well put it like this I don't own a house (yet), don't owe a cent on a car and am pretty well educated.

TBH i don't really like answering personal questions and don't want to come across as boastful or smug, however my point is that it was and is still possible to be prudent (i.e. our government still producing fantasy growth rates and basing our future budgets on same). The people we elect and pay huge salaries too are meant to be among the more intelligent members of society, well eductaed, good strategic planners etc. Even when they were advised of there being no soft landing they ignored it. Obviously the government had a vested interest in ignoring the bubble and in fact talking it up.(thats a whole other thread)

Only McCreevy had any sense and thankfully set up the NPRF, although that is almost pillaged at this stage.

Anyway my point being that you don't need 20/20 hindsight - i know many a person who not only didn't buy a rental property or expensive car but actually sold their PPR and sat on their cash waiting for the fall.

antoobrien

kennyb3 wrote: »

Well put it like this I don't own a house (yet), don't owe a cent on a car and am pretty well educated.

Same here (though the car took 4 years)

kennyb3 wrote: »

TBH i don't really like answering personal questions and don't want to come across as boastful or smug,

No need for specifics, though 40% of f**k all is less impressive than 20% of bonuses

kennyb3 wrote: »

however my point is that it was and is still possible to be prudent (i.e. our government still producing fantasy growth rates and basing our future budgets on same).

They weren't all fantasy though. The first "signs" were in 2005/6 just as the SSIA started to mature - which ended up keeping the economy going fro about 18 months - 2 years. I remember the scoffing at Ulsterbank (i think) when they announced in 2007 that they thought there'd be 10,00 job losses in construction before the end of the year.

kennyb3 wrote: »

The people we elect and pay huge salaries too are meant to be among the more intelligent members of society, well eductaed, good strategic planners etc. Even when they were advised of there being no soft landing they ignored it. Obviously the government had a vested interest in ignoring the bubble and in fact talking it up.(thats a whole other thread)

And if you believe that I think we can just go back to the devine right of kings.

kennyb3 wrote: »

Only McCreevy had any sense and thankfully set up the NPRF, although that is almost pillaged at this stage.

NPRF almost happened by accident though. He took the proceeds of the sale of eircom and put it away so that we couldn't raid it for day to day spending.

Besides wasn't he censured by the european commission for his budgetary policies in the early 90s?

kennyb3 wrote: »

Anyway my point being that you don't need 20/20 hindsight - i know many a person who not only didn't buy a rental property or expensive car but actually sold their PPR and sat on their cash waiting for the fall.

So do I, I don't know too many that are struggling with their properties. However the 20/20 hindsight is referring to the government policy of not throttling back on spending, which our current government objected to as being too tight. Go figure.

kennyb3

antoobrien wrote: »

They weren't all fantasy though. The first "signs" were in 2005/6 just as the SSIA started to mature - which ended up keeping the economy going fro about 18 months - 2 years. I remember the scoffing at Ulsterbank (i think) when they announced in 2007 that they thought there'd be 10,000 job losses in construction before the end of the year.

I'm not even talking about the past. Look at our forecast growth rate for this year, next and after. I'll bet anything they ll be continually missed/downgraded.

I laughed out loud at the UB bit. This was called on other sites in mid 2006. Construction was the new mop up job for government.

antoobrien wrote: »

NPRF almost happened by accident though. He took the proceeds of the sale of eircom and put it away so that we couldn't raid it for day to day spending.

Besides wasn't he censured by the european commission for his budgetary policies in the early 90s?

I'm not saying he is in anyway less useless than some of the other clowns we've had. But as you say he made a saving for a rainy day, regardless of how it came about. That was one good decision.

antoobrien wrote: »

However the 20/20 hindsight is referring to the government policy of not throttling back on spending, which our current government objected to as being too tight. Go figure.

I couldn't give a hooters what our current government thought. I'm saying our previous government should have been more prudent. (I'm sure we can agree on that much)