Are the Bankers & Government the only ones to blame?

kingsenny

donegal_road wrote: »

whoever this person is you are referring to, failed to mention the media and press. The glossy property section of the Sunday Times... figures were being pulled out of thin air printed in these supplements, no one to question or police them.

Do we really need another over paid government official to pretend like he's interested in the common people?

Some of the salaries in the government are laughable at best

noodler

Nope.

They are most to blame but certainly not the only ones.

Obviously.

af_thefragile

kingsenny wrote: »

But there point is that people couldn't afford it. They were spending beyond their means, hence the double mortgages. I'm not sure if it's fair to say spending is always a good thing.
e.g. I have a mortagage > use money to spend outrageously > lose my job > can't afford to pay back loan

Now multiply that by 1000 people...

Like it was pointed out, no-one was forced to take a loan to fund 3 sun holidays a year. Albeit there was a lovely quote about the banks

"Bank are the type of people that will give you an umbrella when it's sunny but take it back when it rains"

Again, people only spend what they can afford to spend. If I have €10 in my pocket I can afford to spend on anything and feel like treating myself to an expensive sandwich, I will do so. As long as people have disposable income to spend, they will continue to spend it on whatever they feel like spending it on. After all we all dream of a better life.

We all live our lives based on certain assumptions. I bought a mortgage because I have a stable job with a good pay. I bought a mortgage I can afford at the time. Nothing more, nothing less. Or should I say, I bought a mortgage that the banks made me believe I can afford at the time.

I am not an economist to see the economy we are living in goes through boom bust cycles and these good times won't last for long. How was I to know that? I'm just your average Joe living out my life. I watch the news, listen to the analysts and the politicians and they all assured me things are great and will only get better. No one believed the one guy who kept trying to say that everyone's got it wrong and in a couple of years time there will be a big collapse.

So now we have a whole society which has been made to believe things are great and will only get better. There are plenty of jobs, good stable income, plenty of disposable income, everyone wants to live the good life with a nice mortgage, nice car, nice holidays etc.

Then 2008 happens. Turns out the one guy who kept saying the economy is going to collapse was right and everyone else was wrong! Who'ld have thought that?! Suddenly businesses have gone bust and people are losing jobs or facing pay cuts. Now there is mass panic. How are we going to pay the mortgage?! People stop buying houses, the housing industry collapses making thousands of people unemployed. Now no one can pay their mortgages, Banks go bust. People lose thousands on their property which thought they bought as investments. Now they're forced to take out more loans and another mortgage to pay off their debts at high interest rates. Everything goes to ****.

Now whom do you blame here? You average Joe for whom everything was going great and was made to believe by the media, politicians and the Banks that he can afford to live "the good life". Or is it the media who only chase ratings and tell people what they want to hear?
Or is it the politicians who lie to the people telling them everything will be great so that they can get votes? Or is it the Bankers who gave out high risk loans to people making them believe they can afford them and not letting them understand the risks of taking such big loans because after all they need to sell the loans to make a profit and who'ld buy such high risk loans if they knew the risks associated with purchasing them?!

And finally is it the fault of the whole economic and banking system that so many economists have been criticising for years but people keep putting them off calling them looney conspiracy theorists??

Zebra3

A large number of people in this country voted for FF, a party that was up to its neck in corruption.

Scum who couldn't lie straight in a bed.

Then the same people were shocked when everything went tits up and the taxpayer got to foot the bill for the elite.

problemchimp

Why do the media not question the auditors who gave the banks a clean bill of health when really they were fuucked. I'm talking about the big five, KPMG, PWC,Delloitte.... etc.
Then KPMG get to run NAMA, win win for them.

af_thefragile

Boombastic wrote: »

Turns out, they couldn't afford it. A mortgage is a long commitment. Just because it may be affordable to make repayments for 1/2 years, doesn't mean it sustainable long term.

BizzyC wrote: »

Yes it is.
The fact is that these people were overreaching their income to buy property.
A lot of people bought under the assumption that the value would continue to grow and they are the ones now left in negative equity.
You're not allowed take risk like that and walk away blame free, the world doesn't work that way.

The banks made deals more attractive because it was a massive business at the time.
They weren't telling people which houses to try buy, they weren't telling people that their personal projection of the economy on the following 10 years was spot on and guaranteed to pay off.

Again you guys are missing the point. Hindsight is a wonderful thing but it couldn't have predicted the collapse.

Now in 2013 we know how wrong people were back in 2006 because we saw them lose their jobs and their income.

Back in 2006 things were very much different. Everyone was forced to believe such a collapse would never happen. People were forced to believe the value of a house can only go up over time as a house is a physical thing and over time demand for houses can only increase as population grows. The media made people believe an economic collapse was only a myth and the economy was doing great and would continue to grow and things could only get better. The politicians all said the same things. While the Bankers forced people to believe they can afford a bigger loan without making the people aware of the risks associated with the high risk loans they were giving out because the banks are in a businesses of selling. One could say what the Banks did in 2006 can be classified as fraud because they sold the public loans that were very high risk without making the public aware of the risks associated with those loans.

People are not economists to have predicted in 2006 what would have happened in 2008. Heck even economists in 2006 were ranting on about how the economy is doing great and people need to spend more.

cson

This would be topical enough amongst my friends. We're late 80s, early 90s kids who don't have the burden of debt but did benefit from the Celtic Tiger years mainly through third level education being fee free (though having entered third level in 2007 we did have the student contribution rise year on year so not exactly free).

I'm constantly hearing through the various media of folks just not paying their mortgage and handing in the keys etc. While I do feel a degree of sympathy for someone who took out a mortgage and will likely end up with nothing; the posting the keys back to the bank mentality grates with me. Firstly because as a renter I know that if I stop paying rent tomorrow, I will be evicted in about 2/3 months following due process. The same doesn't apply to folks who simply stop paying their mortgage. They're living rent free essentially, with the tab being picked up by the Irish taxpayer. Secondly; should folks attempt to go bankrupt/insolvent/run away then the shortfall has to be picked up by the taxpayer. I don't want people to be a prisoner of debt and would agree some sort of solution needs to be worked out but at the same time the lack of personal responsibility from some quarters is sickening. Its a mortgage you bought, not a fucking packet of crisps.

The taxpayer for the next 40+ years are my generation; lots have given up the ghost and taken off to Australia, New Zealand, Canada and the UK. Those that remain face punitive taxes and a probable decline in living standards for those 40 years. Presently I don't have anything tying me to this country other than a professional contract for the next 3 years. If things don't change significantly in that time then I'm off tbh.

At the end of the day, its a mess of seismic fucking proportions that the generations above us have landed us in, and quite frankly they're fucked if they think I'm going paying for it.

Zebra3

af_thefragile wrote: »

Back in 2006 things were very much different. Everyone was forced to believe such a collapse would never happen. People were forced to believe the value of a house can only go up over time as a house is a physical thing and over time demand for houses can only increase as population grows.

Nobody was forced into anything. :rolleyes:

srsly78

But but but they held a (metaphorical) gun to my head!

robbiezero

Government mainly. I don't blame the bankers that much. They are what they are. Greedy scum. Like blaming killer whales for being ... killer whales.
We elect Governments to protect us from Bankers and their ilk. They failed miserably. Although to be fair to them they were a clueless bunch of incompetents and we elected them, so maybe they are not so much at fault either.
Higher-ups in the civil service like the regulator should have had the knowledge and expertise though to recognize an unsustainable bubble.

A lot of confused thinking in this thread.

1) The banking collapse was NOTHING to do with defaults on mortgages. Sure, they're coming down the line now, but Anglo and co got into trouble without joe public being involved.

2) Those blaming people for paying large amounts for houses - what are they supposed to do? It's not a crime to want to put a roof over your family's heads. There are a lot of people out there who's only 'crime' is having to pay way over the odds for a house rather than raise a family in rented accommodation (which isn't a particularly attractive proposition in Ireland)

Sure - some people got carried away and can't meet their debts. But the bulk of the debt burden has been caused by a deliberately inflated bubble that transferred wealth from income earners to landowners and developers, with bankers in the middle taking the cut. The average man and woman in the street just wants to live their life and buying sandwiches and houses is part of that. They don't WANT to spend half their salary for the next thirty years on a shoebox in mullingar.

It's also not really on to blame people for voting FF. Well, it is a little, but again the average person in this country is not in a position to make judgements about economic matters and if one of the major political parties in the country lies to them consistently, the fault lies with the party rather than the poor sucker on the end of the bull****.

For the record - own one house that I live in, paying the mortgage, never have and never will vote FF.

Prettyblack

robbiezero wrote: »

I don't blame the bankers that much. They are what they are. Greedy scum.

Why scum? Why greedy? Is the shopkeeper, who suddenly notices that everybody wants to buy bananas (whatever the reason), finds a way to sell even more bananas, as that's what people want, any different?

Why are the men and women who work for these institutions called "scum"? Because they are out to make money? Are you not?

Are you just jealous that you cannot earn the kind of money they do? So its just easy to call them "greedy scum"?

Grayson

af_thefragile wrote: »

Again you guys are missing the point. Hindsight is a wonderful thing but it couldn't have predicted the collapse.

Now in 2013 we know how wrong people were back in 2006 because we saw them lose their jobs and their income.

Back in 2006 things were very much different. Everyone was forced to believe such a collapse would never happen. People were forced to believe the value of a house can only go up over time as a house is a physical thing and over time demand for houses can only increase as population grows. The media made people believe an economic collapse was only a myth and the economy was doing great and would continue to grow and things could only get better. The politicians all said the same things. While the Bankers forced people to believe they can afford a bigger loan without making the people aware of the risks associated with the high risk loans they were giving out because the banks are in a businesses of selling. One could say what the Banks did in 2006 can be classified as fraud because they sold the public loans that were very high risk without making the public aware of the risks associated with those loans.

People are not economists to have predicted in 2006 what would have happened in 2008. Heck even economists in 2006 were ranting on about how the economy is doing great and people need to spend more.

There were plenty of people who knew it was coming. Bertie told them to commit suicide and everyone else just ignored them.

robbiezero

Prettyblack wrote: »

Why scum? Why greedy? Is the shopkeeper, who suddenly notices that everybody wants to buy bananas (whatever the reason), finds a way to sell even more bananas, as that's what people want, any different?

Why are the men and women who work for these institutions called "scum"? Because they are out to make money? Are you not?

Are you just jealous that you cannot earn the kind of money they do? So its just easy to call them "greedy scum"?

By bankers, I mean the guys at the very top, not their employees.

FamousSeamus

People should take some responsibility, I mean people took loans for everything and spent it on houses, holidays cars etc!! The Banks should have been regulated but the people kept voted in FF caused they De-regulated banks and promoted this "lets spend, spend, spend" culture that led to the recession. My biggest fear is once we've sorted with this mess people will vote back in FF who go back t "Spend, spend spend" and we'll be back at this point in 20 years :O

Prettyblack

robbiezero wrote: »

By bankers, I mean the guys at the very top, not their employees.

Even the guys at the very top. I'm not talking about the Sean Fitzpatricks and the other dudes who did illegal stuff... that was only a handful of people. And they didn't necessarily single-handedly collapse the economy, as a previous poster stated.

FamousSeamus

robbiezero wrote: »

By bankers, I mean the guys at the very top, not their employees.

Who exactly is at the top? Bank managers? regional managers? Is it just easier to blame them cause there's no face to the accusation?

robbiezero

FamousSeamus wrote: »

Who exactly is at the top? Bank managers? regional managers? Is it just easier to blame them cause there's no face to the accusation?

I said I don't blame them.
They were no different to the dot-com CEO's. And I don't care about the faces or individuals, if it wasn't those guys who led the banks into ruin, it would have been others.

FamousSeamus

robbiezero wrote: »

I said I don't blame them.
They were no different to the dot-com CEO's. And I don't care about the faces or individuals, if it wasn't those guys who led the banks into ruin, it would have been others.

True, everyone was so caught up in the hype they just saw profit and not the risks!!

robbiezero

FamousSeamus wrote: »

True, everyone was so caught up in the hype they just saw profit and not the risks!!

Exactly. They didn't intend to bring down the country, they were just doing what they do best.

FamousSeamus

FamousSeamus wrote: »

True, everyone was so caught up in the hype they just saw profit and not the risks!!

The single most impressive achievement of our modern 'ruling classes' is the fact that they've destroyed the international economy, wandered off into the sunset with their pockets loaded with cash (or in some cases, actually got even richer on the back of the crisis), lumped their debts on the taxpayer, and we're blaming ourselves.

Incredible really.

af_thefragile

Zebra3 wrote: »

Nobody was forced into anything. :rolleyes:

Of course they were forced to believe a lie by the media, politicians and the Bankers.

Anyone who said the economy was going to collapse in a few years was deemed ill informed or a looney conspiracy theorist and all the "intelligent" people who knew where the economy was heading towards were saying everything is going great. If this isn't forcing a population to believe a lie, then I don't know what is.

I doubt you're gonna say now everyone needs to start studying economics to make up their own mind regarding what's good or bad for them. People will only believe what they're told to believe. Unless you're an economics major you wouldn't have seen the economic collapse. Even then the economic collapse came as a shock for most economists as well!


Its easy to shove the blame around and feel good about ourselves for not doing anything. The Bankers are to blame? Lets get angry over the bankers and carry on with our lives. The People are to blame? Lets express how stupidly we believe people behaved and feel better we didn't fall into the same trap and carry on with our lives. The system is to blame? Don't be a stupid conspiracy theorist! The system is created to serve us! No one can change the system, its fine, lets carry on with our lives!

Sergeant

I blame absolutely everyone else except myself.

Solair

1 : The Government - politicians, civil service decision makers and regulatory bodies.
Their job is to run the country, and to prevent such crazy bubbles from ever developing. Instead, they seem to have at best ignored what was going on and at worst actually fanned the flames of the celtic tigre and kept feeding it large doses of bluster to keep it going.

2 : The Banks - They really only have one important job - to lend prudently and assess risk. They made a complete dogs dinner of this and ended up basically destroying themselves then turning to the Government for money to save them and then continued to pay their senior management ridiculous money and bonuses and not even see anything wrong with that....

3: A large chunk of the Irish media, with the notable exception of RTE (this is the only reason I still feel OK about paying a TV licence) went 'la la la - I can't hear anything' and ignored anyone who was saying anything negative about the bubble.

The print media basically en mass ignored the impending bubble bursting and kept buying into the Government line. I assume this was down their fear of loss of advertising revenue from their huge property supplements.

RTE Prime Time and particularly George Lee actually need to be credited with calling this collapse several years before it happened. Most people ignored him (some of us didn't) and now we're all screwed. Yeah, he made a bit of an odd jump into politics, but that's life! I wouldn't hold it against him. I'd rather have him as a reporter than a backbencher TD anyway.

4 : The part of the electorate who kept voting for the above Government, although I can accept that a large % of them bought into the hype and probably didn't know any better but still it's up to people to look a little bit beyond the smoke and mirrors and to stop voting for TDs because they filled your local pothole or got your granny the pension she'd have gotten anyway if she'd just bothered to send in the right form!

Pothole related questions need to be referred to COUNCILLORS
TDs need to be constantly harranged about why the economy has collapsed and asked WTF they're going to do about it and other questions of national importance.

Please remember this when they call to the door.

af_thefragile

Deleted User wrote: »

The single most impressive achievement of our modern 'ruling classes' is the fact that they've destroyed the international economy, wandered off into the sunset with their pockets loaded with cash (or in some cases, actually got even richer on the back of the crisis), lumped their debts on the taxpayer, and we're blaming ourselves.

Incredible really.

The modern economic system is created to do just this. Bankers are going to end up getting richer on the back of economic crisis while the burden of the economic collapse is put onto the taxpayer.

During boom Banks sell high risk loans making people purchase loans bigger than they will be able to pay off. During the bust, the Banks have made huge profits when people can't pay off their debts and end up having to take more high interest loan to pay off their mortgage include all the property they now own as the owners can't pay off their mortgages.

And government bailouts keep the banks from going bust themselves. Its the perfect business to be in as its a win win situation. Sell a product to people at a high price when the market is strong on loan. Then when the market collapses, the product is no longer worth as much as the people payed for it and hence they can't simply sell it off and move on. They still need to pay off the full price they bought the product for or you either repossess the product forcing the purchasing to lose all his payment on it or you force the purchaser to take another high interest loan to pay off the debt and when the people can't pay off their debts, the government will pay it off for them to keep your business from collapsing!

zonEEE

coffee_cake

af_thefragile wrote: »

The modern economic system is created to do just this. !

No, it isn't. The govt stepping in and socialising private losses is not the modern system, it's a bunch of eejits trying to be cool
People deciding to put themselves in debt buying houses was their own decision

af_thefragile

bluewolf wrote: »

No, it isn't. The govt stepping in and socialising private losses is not the modern system, it's a bunch of eejits trying to be cool
People deciding to put themselves in debt buying houses was their own decision

It was their own decision under the strong influence of what was told to them by the media and the banks.

If the media told the people don't be stupid and buy that house which is likely to lose its value in the next few years and the banks told the people to beware this mortgage you're about to buy is actually more than your income can actually support and that house won't even be worth this much in the next few years so you'll be better off living in your rented house for the next few years or so until the property prices come down, then yeah, if people still went ahead and bought houses, it was a stupid thing to do.

But that's not the case. People bought houses because the Bankers made them believe they could afford to buy the house. The price of houses increased and the economy was experiencing a boom because Bankers were giving out easy high risk mortgages to people which was increasing demand and in turn driving up the property prices. It was this increase in demand that cause the housing sector to expand creating plenty of jobs and driving the economy.

So going back. The boom happened because Bankers gave out high risk mortgages to people increasing the demand for property. This increase in demand increased property prices and the housing sector which in turn created plenty of jobs to drive the economy. This with a general sense that things were going great, caused more people to jump onto the property bandwagon to "buy it while you can because property prices will only go up over time and thus property is always a safe investment". This created the cycle which caused more and more people to take out mortgages to buy houses, driving the prices of houses up and in turn making the mortgages even higher risk until eventually the bubble burst when supply exceeded the demand and property prices began to fall. Banks stop giving out easy loans. Now no one wanted to buy a house anymore because what they believed would never happen was happening. The property prices were falling fast. This stagnated the economy as no one wanted to buy houses anymore. The housing sector went bust. Thousands of people lost their jobs, the economy was put under enormous strain. Taxes were increased, businesses went bust, more people lost their jobs and now everyone realise they'ld been lied to by the banks and they were stuck with a mortgage they paid too much for and now are going to struggle to pay off.


I'm repeating my self here but saying simply "the collapse happened because too many eejits bought houses they couldn't afford" is extremely simplistic and shows lack of understanding of the economic process of boom and bust cycles.

These cycles are created by banks. The boom begins when the Banks start giving out low interest but high risk loans. The boom ends when the Banks stop giving out these loans and the markets collapse taking with them people's investments.


And government socialising private loses is modern as in its been going on since the late 19th Century when governments switched to a fiat currency from a gold backed standard.

Three Seasons

af_thefragile wrote: »

Again, people only spend what they can afford to spend. If I have €10 in my pocket I can afford to spend on anything and feel like treating myself to an expensive sandwich, I will do so. As long as people have disposable income to spend, they will continue to spend it on whatever they feel like spending it on. After all we all dream of a better life.

We all live our lives based on certain assumptions. I bought a mortgage because I have a stable job with a good pay. I bought a mortgage I can afford at the time. Nothing more, nothing less. Or should I say, I bought a mortgage that the banks made me believe I can afford at the time.

I am not an economist to see the economy we are living in goes through boom bust cycles and these good times won't last for long. How was I to know that? I'm just your average Joe living out my life. I watch the news, listen to the analysts and the politicians and they all assured me things are great and will only get better. No one believed the one guy who kept trying to say that everyone's got it wrong and in a couple of years time there will be a big collapse.

So now we have a whole society which has been made to believe things are great and will only get better. There are plenty of jobs, good stable income, plenty of disposable income, everyone wants to live the good life with a nice mortgage, nice car, nice holidays etc.

Then 2008 happens. Turns out the one guy who kept saying the economy is going to collapse was right and everyone else was wrong! Who'ld have thought that?! Suddenly businesses have gone bust and people are losing jobs or facing pay cuts. Now there is mass panic. How are we going to pay the mortgage?! People stop buying houses, the housing industry collapses making thousands of people unemployed. Now no one can pay their mortgages, Banks go bust. People lose thousands on their property which thought they bought as investments. Now they're forced to take out more loans and another mortgage to pay off their debts at high interest rates. Everything goes to ****.

Now whom do you blame here? You average Joe for whom everything was going great and was made to believe by the media, politicians and the Banks that he can afford to live "the good life". Or is it the media who only chase ratings and tell people what they want to hear?
Or is it the politicians who lie to the people telling them everything will be great so that they can get votes? Or is it the Bankers who gave out high risk loans to people making them believe they can afford them and not letting them understand the risks of taking such big loans because after all they need to sell the loans to make a profit and who'ld buy such high risk loans if they knew the risks associated with purchasing them?!

And finally is it the fault of the whole economic and banking system that so many economists have been criticising for years but people keep putting them off calling them looney conspiracy theorists??

If you sign a contract to pay back the loan then you must be prepared to face the consequences in the event of default. I don't care if you are an "ordinary Joe". You must adhere to the legal documents you sign. If you don't like the terms and conditions then don't sign the contract.

af_thefragile

Three Seasons wrote: »

If you sign a contract to pay back the loan then you must be prepared to face the consequences in the event of default. I don't care if you are an "ordinary Joe". You must adhere to the legal documents you sign. If you don't like the terms and conditions then don't sign the contract.

What if you were lied to by the Banks and were assured you'll be able to pay off the loan no problem? And everyone you'ld trust in this matter from media analysts to economists told you buying a house would be a safe bet as far as investment goes?

That's exactly what the Bankers want you to believe now "The people knew what they were getting themselves into and thus its totally their fault this all has happened!". What they won't tell you is how they and the whole society lied to them regarding how they would be able to pay off the mortgage easily over the years or/and will end up with a great investment.

If people played as safe and cautiously as you expect them to play, then no one would ever take a loan for anything unless it was an absolute necessity. No one would ever buy a house, no one would ever start a business, no one would buy a new car and economy will simply stagnate.

Again if you simply say "this happened because people bought more than they could afford" then it only shows your lack of knowledge and understanding of the subject.

People are consumers not economists and the consumer can be exploited. Banks are a business not a service. When a business sells a fraudulent deal, its the business, not the consumer that is deemed guilty and persecuted.

The Banks sold a fraudulent deal to the people. Then the Banks got away with it "to protect the consumer" and the consumer is now being blamed for not being careful and knowledgeable enough to recognise a fraudulent deal. Nice.