Why have the govt forced AIB to drop interest rates and not PTSB?

SeanW · 13-03-2012 02:26PM

benway wrote: »

Dial C for cognitive dissonance. Light touch regulation and the "magic of the markets" got us into this mess.

I'm still dying for one of you libertarians to explain to me how you would have dealt with the social consequences of letting the banks collapse?

Very simple. I would have compensated retail depositors and told everyone else to go to Hell. The U.S. has a mechanism to this called the Federal Deposit Insurance Corporation, so that when a small/regional bank fails the FDIC steps in to help depositors. And they don't step in until the bank actually falls.

If only they hadn't done other stuff like passed the Community Reinvestment Act, created a series of bubbles like housing construction and actaully let Wall St bankers go f*** themselves when they came a cropper, America would now be a lot better off if their bank 'rescue' actions had been limited to the remit of the FDIC.

Ireland would be like Iceland now - already on the road to recovery and with about €80bn or so less national debt.

Big Nasty · 13-03-2012 02:27PM

Faolchu wrote: »

why should you not have to pay it though? you signed the contract being of sound mind and knew what your side of the deal was.

dont get me wrong i sympathise and like most i struggle to make ends meet and would love surplus cash for multiple holidays etc. but I'm curious to know why people think the government are wrong not to intervene in what amounts to a contract between two parties?

Do you think it's fair that they're charging 2% more than anyone else? I wouldn't care so much if I could move providers but I'm in negative equity to the tune of €80k so they're holiding me and 79,999 others to ransom.:mad:

gurramok · 13-03-2012 02:27PM

emo72 wrote: »

The problem here is he has little spare money to spend. All these people that are caught in this trap are lost to the real economy. Its all very well saying you got what you asked for. But that attitude wont help anybody.

As far as I remember we were all encouraged/scared into buying. Or else be left behind.

Cut back to a lifestyle you signed up to. No-one was forced to buy against their will under any threats.

sbsquarepants · 13-03-2012 02:28PM

MickySticks wrote: »

2% rise means you pay €300 extra per month. So by my calculations you pay €15,300 per month for your mortgage?

Ha ha. Do you work for the department of finance by any chance?:rolleyes:
That's a fine grasp of how mortgage interest works you have there!

Kidchameleon · 13-03-2012 02:33PM

Faolchu wrote: »

MCMLXXV wrote: »

No, charging 2% more than every other bank.

but isnt that the contract you signed up to? did the current or for that matter teh previous government force you to sign on the dotted line? did teh government force people to over extend and become massivly in debt and in a large hole with negative equity? eh no coz ya see i bought my place at the height of the boom too, but i figured i'd buy small and not overextend myself to the pont that while i was on a decent wage i didnt have a pot to piss in. instead i figured i'd buy small and live comfortably. am i in negative equity now? yeah but not as bad as most people, do i blame teh government? no i blame myself for buying when i did after all no one forced me to buy a home, i could have rented and paid for someone elseses instead

Jesus theres always one :'(

donegal_road · 13-03-2012 02:34PM

you've made your bed, now lie in it... no one put a gun to your head... this is what you signed up for... no use in crying now... show some responsibility for your actions.. man up and pay up.. its buyer beware.. quit moaning and keep up with the repayments.. so you want the government to hold your hand do you?.. act more responsibly and stop complaining.. and by the way, your the one who signed the dotted line, was Bertie holding a gun to your head? :rolleyes::eek::cool:

:D:mad::pac:

ChubbyHubby · 13-03-2012 02:35PM

MCMLXXV wrote: »

Do you think it's fair that they're charging 2% more than anyone else? I wouldn't care so much if I could move providers but I'm in negative equity to the tune of €80k so they're holiding me and 79,999 others to ransom.:mad:

That's a really childish argument. Is it fair that some people earn more than you? Is it fair that some people have no jobs? It might not seem fair to you but life isn't fair most of the time.

smash · 13-03-2012 02:40PM

Faolchu wrote: »

i figured i'd buy small and not overextend myself to the pont that while i was on a decent wage i didnt have a pot to piss in. instead i figured i'd buy small and live comfortably.

And if you get hit with a pay cut and interest rates rise, ESB/Gas rates rise, the price of fuel rises, motor tax rises and then there's the household tax then you're going to be living very uncomfortably. Like a lot of Ireland is. I don't buy the bs that people overextend themselves. At the time, they could afford it. It's simple.

irishgrover · 13-03-2012 02:40PM

MickySticks wrote: »

2% rise means you pay €300 extra per month. So by my calculations you pay €15,300 per month for your mortgage?

with all due respect, I don't think you understand how compond interest works. Google mortgage calculator and you can play with some figures. for example

borrow 400k over 25 years
interest @ 1% MP=1847
interest @ 3% MP= 2240
interest @ 5% MP=2674

the really worrying bit is that interest rates basaically can't get any lower (from an ecb point of view). It irish banks are charnging ~5% when the ecb rate is ~1% what the **** will they be charging when ecb rates increase? Any remember the only reason ecb rates are so low is because the big two economies are struggling.
What will happen in a few years when Germany/France are growing strongly, and the ecb pumps up the interest rate to 5% to compensate?
What will the irish banks be charging then 8%, 10% 12% ?? Whick every it is, we'll be completely ****ed....
For example, looking at the loan above
interest @ 10% MP=3915
interest @ 13% MP=4745

(obviously figures ignore, amount actually repaid at time of interest rate change etc)

MickySticks · 13-03-2012 02:45PM

sbsquarepants wrote: »

Ha ha. Do you work for the department of finance by any chance?:rolleyes:
That's a fine grasp of how mortgage interest works you have there!

I understand perfectly how mortgage interest works, the OP worded in such away that he was saying he paid €300 p/m extra with a 2% mortgage rise not interest!!

emo72 · 13-03-2012 02:46PM

gurramok wrote: »

emo72 wrote: »

The problem here is he has little spare money to spend. All these people that are caught in this trap are lost to the real economy. Its all very well saying you got what you asked for. But that attitude wont help anybody.

As far as I remember we were all encouraged/scared into buying. Or else be left behind.

Cut back to a lifestyle you signed up to. No-one was forced to buy against their will under any threats.

I'm not affected by this at all. I bought my home years ago. I think is an injustice what's happening to young people. I remember well. It was like a gun being put to your head. Buy now our never afford one. Rent was not much cheaper either. If you were a young couple growing up then you could not put your life on hold indefinitely. Waiting for prices to fall.

Ok. Some people are saying. Tough, its what you signed up for, take your medicine. Ok. See what happens if those people are left in that situation. The country will not recover and even the people with the incredible foresight will be affected.

Big Nasty · 13-03-2012 02:47PM

ChubbyHubby wrote: »

That's a really childish argument. Is it fair that some people earn more than you? Is it fair that some people have no jobs? It might not seem fair to you but life isn't fair most of the time.

You miss this bit?

standard variable mortgage holders in Permanent TSB are being charged interest at a rate of 5.19%, while the Government forced AIB to reduce its variable rate to 3%. Finance spokesperson Michael McGrath said it was unacceptable that one State-owned bank should be forced to reduce its rates, while another was ignored.

Big Nasty · 13-03-2012 02:48PM

MickySticks wrote: »

I understand perfectly how mortgage interest works, the OP worded in such away that he was saying he paid €300 p/m extra with a 2% mortgage rise not interest!!

No I didn't and it just proves you didn't read my OP and are just here to 'have a go'.

smash · 13-03-2012 02:50PM

MickySticks wrote: »

I understand perfectly how mortgage interest works, the OP worded in such away that he was saying he paid €300 p/m extra with a 2% mortgage rise not interest!!

Mortgage rise as a result of interest rate. You obviously do not understand.

Jimmy Two Times · 13-03-2012 02:53PM

Call their bluff............throw the keys back at them if you have no other assets they can get their maulers on.

Go rent a place for a lot less than what you are paying at the moment and have some sort of a lifestyle rather than stressing about how you are never going be able to repay this mortgage and get any sort of equity back in the gaff.

OK, so you'll never borrow another cent here ever again..........do you really care ?

MysticalRain · 13-03-2012 02:56PM

SEPT 23 1989 wrote: »

The more that people have to spend on their mortgages the less that goes into the real economy=more unemployment=more social welfare payments=more borrowing=economic death spiral

If you expect a handout from people like me, then we will have less money to spend in the real economy.

I would rather give my money to the 400,000 plus people on the dole right now than give it to people who over-extended themselves in the boom by buying overpriced property.

gurramok · 13-03-2012 02:56PM

emo72 wrote: »

I'm not affected by this at all. I bought my home years ago. I think is an injustice what's happening to young people. I remember well. It was like a gun being put to your head. Buy now our never afford one. Rent was not much cheaper either. If you were a young couple growing up then you could not put your life on hold indefinitely. Waiting for prices to fall.

Ok. Some people are saying. Tough, its what you signed up for, take your medicine. Ok. See what happens if those people are left in that situation. The country will not recover and even the people with the incredible foresight will be affected.

Cry me a river. Many young people could not afford to buy or just didn't buy out of common sense.

The country will recover with or without those people you speak of, they bought at an agreed price for what the property was worth to them.

They are only a portion of the demographic who were foolish to be taken in by spin that a 1 bed flat in junkieville was worth 300k.

benway · 13-03-2012 02:57PM

SeanW wrote: »

Very simple. I would have compensated retail depositors and told everyone else to go to Hell. The U.S. has a mechanism to this called the Federal Deposit Insurance Corporation, so that when a small/regional bank fails the FDIC steps in to help depositors. And they don't step in until the bank actually falls.

If only they hadn't done other stuff like passed the Community Reinvestment Act, created a series of bubbles like housing construction and actaully let Wall St bankers go f*** themselves when they came a cropper, America would now be a lot better off if their bank 'rescue' actions had been limited to the remit of the FDIC.

Ireland would be like Iceland now - already on the road to recovery and with about €80bn or so less national debt.

Lotta state intervention for a libertarian, but I'm running with it - we'll leave aside the sort of short-term chaos that allowing them to fold would've caused.

What about mortgage holders? Are they still liable as debtors in the liquidation? Even after the value of their property has collapsed? I mean, they signed a contract, right?

emo72 wrote: »

I'm not affected by this at all. I bought my home years ago. I think is an injustice what's happening to young people. I remember well. It was like a gun being put to your head. Buy now our never afford one. Rent was not much cheaper either. If you were a young couple growing up then you could not put your life on hold indefinitely. Waiting for prices to fall.

+10000000 to this

I didn't buy, but the amount of pressure from family and friends was shocking - it was almost like I was slightly simple for not wanting to get on the "property ladder".

Personally, I think that one of the quid pro quos for the level of taxpayer support extended to the banks should be a system of debt forgiveness, they're having it every way at the moment.

Faolchu · 13-03-2012 02:59PM

MCMLXXV wrote: »

Do you think it's fair that they're charging 2% more than anyone else?

if you want a pure clinical answer then if that is the contract that you and the 79999 others signed up to then yes it is fair. i dont recal there being any obligation on them to reduce interest rates

blaze1 · 13-03-2012 03:05PM

Ring Eamon Gilmore 01 6183566 if you are one of the 80,000.

AudreyHepburn · 13-03-2012 03:06PM

Why do people insist on behaving as if they were dragged kicking and screaming to purchase that huge mortage or expensive house?

Those lending the money were careless yes, but you didn't HAVE to by that expensive 5 bed house or take out that enormous mortgage. You CHOSE to do so.

Shockingly the Government/Banks/Developers are not responsible for our personal choices and personal mistake, despite what we might like to think.

Does personal responsibilty not matter anymore?

Big Nasty · 13-03-2012 03:08PM

Jimmy Two Times wrote: »

Call their bluff............throw the keys back at them if you have no other assets they can get their maulers on.

Go rent a place for a lot less than what you are paying at the moment and have some sort of a lifestyle rather than stressing about how you are never going be able to repay this mortgage and get any sort of equity back in the gaff.

OK, so you'll never borrow another cent here ever again..........do you really care ?

I don't want to do that.

Nobody put a gun to my head in 2005 when I bought. I knew what I was signing up for and could afford it then. Obviously things have changed for most of us since then. We're both in fairly good jobs, both pay our taxes, both have cars which we need for work (they are far from new). I don't, nor shouldn't, have an issue with paying my bills and I accept that I have to suck it up like everyone else. What bugs me is that I'm paying over 2% more than (I feel ) I should be paying in mortgage rates which is costing me an axtra €300 a month. That's €300 a month I could really, really do with seeing as we're down €1000 in expendable income between Dec 10 and Jan 12.

Faolchu · 13-03-2012 03:08PM

smash wrote: »

I don't buy the bs that people overextend themselves. At the time, they could afford it. It's simple.

actually thats not the case some people told white lies on mortgage applications about renting rooms out for additional income so they could get approved for a 3 bed house instead of a 2 bed apartment or had a "friend" in the accounts department draft a letter on company paper that said they recieved an additional 5K bonus a year on top of their salary and what not or didnt declare the likes of credit union loans as an outgoing. these white lies allowe dthem to get a mortgage for 300K instead of 250K for example but because this "bonus" or "rental income" didnt actually exist they were over extended.

I'm not saying that pay cuts that have happened over the years havent added to the problem what i'm saying is that in some cases people wanted to run before they could crawl. by not having that additional income they were already over extended, yes they could afford it but i recall being quoted that your mortgage repayments could not be more than 35% of your monthly income when i applied for mine. so by making **** up on the application they apeared to have more disposable income and thus wewre given larger mortgages.

Dyr · 13-03-2012 03:12PM

benway wrote: »

+10000000 to this

I didn't buy, but the amount of pressure from family and friends was shocking - it was almost like I was slightly simple for not wanting to get on the "property ladder".

I'll be slated for posting mcsavage stuff but this sums that era up I think

https://www.youtube.com/watch?v=e4CtWb4tJBg

pickarooney · 13-03-2012 03:14PM

MCMLXXV wrote: »

I don't want to do that.

Nobody put a gun to my head in 2005 when I bought. I knew what I was signing up for and could afford it then. Obviously things have changed for most of us since then. We're both in fairly good jobs, both pay our taxes, both have cars which we need for work (they are far from new). I don't, nor shouldn't, have an issue with paying my bills and I accept that I have to suck it up like everyone else. What bugs me is that I'm paying over 2% more than (I feel ) I should be paying in mortgage rates which is costing me an axtra €300 a month. That's €300 a month I could really, really do with seeing as we're down €1000 in expendable income between Dec 10 and Jan 12.

First world problems, tbh.

smash · 13-03-2012 03:16PM

Jimmy Two Times wrote: »

Call their bluff............throw the keys back at them if you have no other assets they can get their maulers on.

You must be American, because that's illegal in Ireland. You're still accountable for the debt.

Faolchu wrote: »

I'm not saying that pay cuts that have happened over the years havent added to the problem what i'm saying is that in some cases people wanted to run before they could crawl.

What you said was that you didn't overextend yourself like everyone else did, now you're saying "some people" :rolleyes:

Dirk Gently · 13-03-2012 03:16PM

bluewolf wrote: »

govt meddling in the banks got us into this mess

Yes clearly they were over regulated, that was what caused it. If we had only had light touch regulation then the unrestricted morekit would have created a sustainable model and thus avoided this over regulated mess.

Big Nasty · 13-03-2012 03:22PM

pickarooney wrote: »

First world problems, tbh.

Just about having enough money to make ends meet, yeah I suppose you're right - there's plenty of people worse off than me for sure.

I really hate that saying though - first world problems.

Faolchu · 13-03-2012 03:26PM

smash wrote: »

What you said was that you didn't overextend yourself like everyone else did, now you're saying "some people" :rolleyes:

cant seem to see where i said that, maybe you can point it out to me.

donegal_road · 13-03-2012 03:28PM

just stop paying OP, its a terrible waste of money IMO!

Why have the govt forced AIB to drop interest rates and not PTSB?

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