Where would we be if them bastards didnt bail the banks

yoloc · 06-07-2013 08:27PM #1

Just as the title suggests. Where would this country be if we had of told the banks to GTF and not bailed them out. TBH im not very clued up on all this stuff that goes on concerning it but one thing i do know is that we are up **** creek.

I understand that the property market did need correcting but as a whole, would the country be a happy place to live in now or would we still be seeing mass's of people emigrating, mass job cuts etc..

Jester252 · 06-07-2013 08:31PM

Not to different from today.

06-07-2013 08:31PM

We'd still be in the shít, but the tax burden would have been less and the bailout would have been smaller.
The main issue is that this economic downturn was not entirely down to the banksters, it is mainly down to having an economic system that is hard coded to only operate in perpetual growth mode. When growth declines it fails, and it did!

We simply cannot expect a system that requires infinite growth to function indefinitely in a finite world.

Dartz · 06-07-2013 08:34PM

Anyone with money in the banks who wasn't fast enough to withdraw it would've been ****ed.

Perpetual growth would work if we had a space program. Space is infinite.

kneemos · 06-07-2013 08:45PM

I would have been on a flight from South Korea to San Francisco...lucky.

K.Flyer · 06-07-2013 08:53PM

So, with hindsight, is there anyone who advocated the bailouts and the routes that the government took, now feel that we were had and have changed their opinion, or, do they still believe the government(s) made the right choices.
Personally I believe there was a huge amount of scare mongering, especially no cash at the ATMs, etc.
Yes we may still be in some sort of sh1t, but probably not so sricky and smelly.

onemorechance · 06-07-2013 08:55PM

We would have been left with empty atm's.

K.Flyer · 06-07-2013 09:01PM

onemorechance wrote: »

We would have been left with empty atm's.

Maybe at the Anglo ATM, but why the rest of them.

Phill Ewinn · 06-07-2013 09:05PM

Didn't need to bail Anglo at all. The rest of em should have negotiated their losses. They didnt. Were screwed.

onemorechance · 06-07-2013 09:09PM

K.Flyer wrote: »

Maybe at the Anglo ATM, but why the rest of them.

I think there was a fear that the same thing would happen as with the Northern Rock bank in the UK where people were queueing up to empty their accounts.

Or even worse, chaos like in Argentina!

At the time, the bank guarantee (100k deposits) given by the Irish Government was wholly praised internationally as a great move; this was of course before it became known that the banks had lied about their liabilities.

Speisekarte · 06-07-2013 09:16PM

[Deleted User] wrote: »

We'd still be in the shít, but the tax burden would have been less and the bailout would have been smaller.
The main issue is that this economic downturn was not entirely down to the banksters, it is mainly down to having an economic system that is hard coded to only operate in perpetual growth mode. When growth declines it fails, and it did!

We simply cannot expect a system that requires infinite growth to function indefinitely in a finite world.

Can you explain what it means for an economic system to fail?

K.Flyer · 06-07-2013 09:16PM

Phill Ewinn wrote: »

Didn't need to bail Anglo at all. The rest of em should have negotiated their losses. They didnt. Were screwed.

IF... Big if..
They had let Anglo fall and worked with the rest of them, or none of them, can anyone show how, in simple terms, just how worse things would have been for the country.
Billions pumped into a failed bank by the goverment and nothing to show for it except recordings of the bank executives laughing at the rest of us, c'mon.

lkionm · 06-07-2013 09:22PM

It would have been economic suicide to not bail them out or gaurantee the deposits.
We probably paid too much but it was probably a little bit hard to pin point how much bad loans they had since a lot of their investments and loans are scattered among other banks in the world.
If we didnt bail them out no other country would have given us a loan or no company would have invested in us since most of the banks would have to close and you would lose your money. This would lead to massive instabilty in the economy and there would probably be massive deflation making and massive job losses.

So the country would have gone bankrupt and we would be living rather poorly for a long time as the government is getting no money and any money it can borrow has a massive interest rate to be paid each year which will lead them to borrowing more money to pay off the interest rates, probably at that point the IMF and world bank would have taken over our economy like they did in asia in the 90s.

We would have probably cost the EU economy a bit as well as it would have led to instabilty among other countries and this would affect the exchange rate of the euro to the dolla and the yen.

Its a good question but we can speculate just like those in 2007 could speculate about the future when there was no major problems perceived globally.

dd972 · 06-07-2013 09:22PM

I'm no economic whizz but have always suspected that the 'empty ATM' scenario was a myth and a ruse to scare people into bailing out a mess not of their own doing.

lkionm · 06-07-2013 09:24PM

K.Flyer wrote: »

Maybe at the Anglo ATM, but why the rest of them.

People would have taken their money out and the bank only holds about 10% of your money and uses the rest to create loans and what not. Thats how they make money and why they want your deposits and why some savings are so hard to get to.

Also why you have a limit of how much you are allowed withdraw in a day. Banks lend each other money to cover their reserves which is the cash they keep for our daily use.

Your money isnt sitting in a filing cabinet in the safe just gathering dust. Its out working.

R P McMurphy · 06-07-2013 09:29PM

onemorechance wrote: »

I think there was a fear that the same thing would happen as with the Northern Rock bank in the UK where people were queueing up to empty their accounts.

Or even worse, chaos like in Argentina!

At the time, the bank guarantee (100k deposits) given by the Irish Government was wholly praised internationally as a great move; this was of course before it became known that the banks had lied about their liabilities.

The guarantee on deposits was never the problem

K.Flyer · 06-07-2013 09:39PM

Yes I kniw most of our finances are not physically in the banks. But that does not stop me using my Visa or Visa Debit card to obtain goods and services.
My point being with a limit on withdrawing cash, it would not have stopped me dead in my tracks.
I believe the eurocrats did their fare share of scare tactics in order to show that the euro was stable

seamus · 06-07-2013 09:39PM

Europe in general would have been in a big pile of ****, which has pretty recently been admitted both by our government and governments in Europe.

The problem is that banks don't collapse in isolation. They cause a cascade because the banks are lending to eachother. So if bank A owes €200bn to bank B and bank A goes under, then bank B has lost €200bn and may itself fall into ****.

The banking system at that time was in a very precarious position where everyone had loaned huge money to everyone else, so a big failure of one bank would leave everyone in the ****. Anglo just took this crap one step further and rather than borrow money from someone else, they started borrowing money from themselves to inflate their share prices and balance sheets.

This had to end badly eventually, the only problem being that Anglo had also borrowed money from lots of other people. If Anglo had been let go to the wall, AIB would definitely have gone, and probably PTSB and most of the other. BoI would likely have survived but it would still be in serious ****. Like I say, these things cascade - AIB also owe billions to other banks around Europe. AIB goes down and those banks start toppling too, and the banks they owe money to, and so on and so on. What's the outcome? Well nobody knows. If enough banks fail, then people begin to have no faith in banks, they rush to take their money out, except their money only exists in computers, the economy grinds to a halt, business can't operate without cash, people start panicking about feeding their families, turns to riots, civil unrest, revolution and possibly war.

The main problem is that we didn't really need to prop them all up; only the ones which had any possbility of surviving. As we've learned, Anglo was screwed, and they knew it, but they lied to the Government and convinced them Anglo could be saved and was worth saving. AIB would still have been a big cost to prop up, bigger than Anglo, but allowing Anglo to collapse wouldn't have caused a run on the banks. If AIB collapsed, people would panic.

If we ultimately said, "Fnck this, let them collapse", I think Europe would have stepped in to prevent the cascade from happening. But there would be big questions to answer as to why Ireland as an EU member state was happy to gamble with the economic stability of the entire EU.

goose2005 · 06-07-2013 09:42PM

dd972 wrote: »

I'm no economic whizz but have always suspected that the 'empty ATM' scenario was a myth and a ruse to scare people into bailing out a mess not of their own doing.

Of course it was. In any case, a few days or weeks of shutdown might have been exactly what was needed, rather than just pretending everything's normal.

K.Flyer wrote: »

IF... Big if..
They had let Anglo fall and worked with the rest of them, or none of them, can anyone show how, in simple terms, just how worse things would have been for the country.
Billions pumped into a failed bank by the goverment and nothing to show for it except recordings of the bank executives laughing at the rest of us, c'mon.

Property values would have fallen even more. And Ireland is ruled by those who own land, houses and shops, nothing happens that would seriously harm their interests unless it absolutely has to.

Wabbit Ears · 06-07-2013 09:42PM

If we had let Anglo fail many others would have collapsed also. The risk would be to high for any foreign investors or banks saving them like what happened with Bank of America and Merril Lynch post Lehman brothers. Our banks would not have been saved, one by one they'd have fallen and the UK banks would have run like hell.

If this had happened the creditors would be ruthless in clawing back debts, There would have been none of this not paying your mortgage and still owning your house, it would have been GTFO and up for auction.

The little people with current, savings etc would lose everything they had in the bank with no recourse.

The country would not be able to borrow money so social welfare and gubberment employees would simply not be paid beyond what was actually in the coffers.

Huge numbers of government employees, bank and financial services people would have lost their Jobs. Associated business would fall with them.

The doll queues would be massive and futile for many as there is no money to give them.

lkionm · 06-07-2013 09:48PM

K.Flyer wrote: »

Yes I kniw most of our finances are not physically in the banks. But that does not stop me using my Visa or Visa Debit card to obtain goods and services.
My point being with a limit on withdrawing cash, it would not have stopped me dead in my tracks.
I believe the eurocrats did their fare share of scare tactics in order to show that the euro was stable

I am guessing you meant to qoute me and not yourself.

Your Visa isnt paper money and funds are just being transferred from one account to another, so all that changes is a number on the account. This will affect their reserve ratio which is the money they have in reserve at the bank compared with the money they should have. They can just borrow from another bank to meet this ratio for a little bit, but that is more affected when they create loans and they get fined when they go below the line.
Lets say you were to withdraw your money with cashback from tesco and they didnt have a limit, you effectively pay into their account and they give you the money that way if that makes sense?

06-07-2013 09:49PM

Speisekarte wrote: »

Can you explain what it means for an economic system to fail?

It's failing because the debts are still growing faster than the growth required to repay those debts, this is despite of near zero interest rates at the central banks.

The only reason the system hasn't collapsed is directly due to "Quantitative Easing" AKA money printing to fill the holes in the banking system caused by inadequate growth in the real economy.

If you want an example of an economy that is in the process of failing to the next level, look to Egypt!

goose2005 · 06-07-2013 09:49PM

Wabbit Ears wrote: »

If we had let Anglo fail many others would have collapsed also. The risk would be to high for any foreign investors or banks saving them like what happened with Bank of America and Merril Lynch post Lehman brothers. Our banks would not have been saved, one by one they'd have fallen and the UK banks would have run like hell.

That's exactly what happened. The UK banks have already left. The Irish banks have already collapsed.

If this had happened the creditors would be ruthless in clawing back debts, There would have been none of this not paying your mortgage and still owning your house, it would have been GTFO and up for auction.

And who would buy it?

Huge numbers of government employees, bank and financial services people would have lost their Jobs.

*begins to tune world's tiniest violin*

Associated business would fall with them.

already falling

The doll queues would be massive and futile for many as there is no money to give them.

already happened, every cent of a dole cheque is an IMF/EU/ECB loan

lkionm · 06-07-2013 09:52PM

goose2005 wrote: »

Of course it was. In any case, a few days or weeks of shutdown might have been exactly what was needed, rather than just pretending everything's normal.

Property values would have fallen even more. And Ireland is ruled by those who own land, houses and shops, nothing happens that would seriously harm their interests unless it absolutely has to.

They had to pretend everything was normal or it would screw up the euro exchange rate and create instabilty and create panic if people knew the truth.

Oh this is one for the conspiracy folks, the lads in the Eu central bank do not have to take minutes of their meetings and everything is done behind closed doors. They meet every month to chin wag about the economy and inflation and how it has been a very naughty boy

K.Flyer · 06-07-2013 09:56PM

lkionm wrote: »

I am guessing you meant to qoute me and not yourself.

LOL "Facepalm"

lkionm · 06-07-2013 09:58PM

Deleted User wrote: »

It's failing because the debts are still growing faster than the growth required to repay those debts, this is despite of near zero interest rates at the central banks.

The only reason the system hasn't collapsed is directly due to "Quantitative Easing" AKA money printing to fill the holes in the banking system caused by inadequate growth in the real economy.

If you want an example of an economy that is in the process of failing to the next level, look to Egypt!

Following on from this, debt growing faster than growth leads to more debt and higher interest rates, meaning we never pay off debt and it keeps going higher and higher and interest getting bigger and bigger.

Quantative easing is being done now by Japan and this devalues the currency and leads to inflation and we have to stick to 2% inflation per year form one of the Eu treaties we signed years ago. This is why they central bank changes interest rates, to affect inflation, not to give Mary more money or to take her money away from her. They dont even know Mary.

If we failed we would be padded due to the Eu but we would always be a poor country for the next 100 years paying back loans with no money to run the country.

Wabbit Ears · 06-07-2013 09:58PM

goose2005 wrote: »

That's exactly what happened. The UK banks have already left. The Irish banks have already collapsed.

One bank collapesed in a controlled manner after recieving tons of money to pay its debts to the other banks. This is nowhere near the castestrophic domino collapse had they simply been allowed to fail.

And who would buy it?

They would have been sold for whatever they could get. Three fiddy for example, but kidding aside if something is being flogged cheap enough there will be buyers and even if there were no buyers your house is gone, not yours no more, out on your arse.

*begins to tune world's tiniest violin*

Huge unemployment like that also has a cascade effect.

already falling

Nowhere near to the same extent. Buisness have trouble getting credit but i fthis happened that woudl simply not be an option, at all. None. No money. There would be no money.

already happened, every cent of a dole cheque is an IMF/EU/ECB loan

Which we would not be getting if we had allowed the banks to fail.

NuckingFacker · 06-07-2013 10:05PM

lkionm wrote: »

It would have been economic suicide to not bail them out or gaurantee the deposits.
We probably paid too much but it was probably a little bit hard to pin point how much bad loans they had since a lot of their investments and loans are scattered among other banks in the world.
If we didnt bail them out no other country would have given us a loan or no company would have invested in us since most of the banks would have to close and you would lose your money. This would lead to massive instabilty in the economy and there would probably be massive deflation making and massive job losses.

So the country would have gone bankrupt and we would be living rather poorly for a long time as the government is getting no money and any money it can borrow has a massive interest rate to be paid each year which will lead them to borrowing more money to pay off the interest rates, probably at that point the IMF and world bank would have taken over our economy like they did in asia in the 90s.

We would have probably cost the EU economy a bit as well as it would have led to instabilty among other countries and this would affect the exchange rate of the euro to the dolla and the yen.

Its a good question but we can speculate just like those in 2007 could speculate about the future when there was no major problems perceived globally.

I don't agree with your premise. At all. The EU would have had to act to maintain the Euro, anglo and it's bondholders could have GTBF and a smaller deposit guarantee scheme could have been implemented.

The financial markets have the memory of a goldfish and there's always new "Investors", i.e gamblers, ready for a fresh punt at a profit. It's all moot now anyway, they goofed, we're paying and I doubt the goof was an accident.. Loads of people did rather nicely out of it all.

Anyone doubting this need only look at those speculators who chose to go Bankrupt in the U.K. Most are getting back up and running with new backers/banks. Money has no memory, it just chases the next opportunity.

K.Flyer · 06-07-2013 10:06PM

Ok. so why do some people keep refering to Icelands experienve and how would it have been so different for us if we had of done as they did.
I know they are still not in the clear, but by some accounts they are doing better than we are. Or is it a case that their "bubble"was not as overinflated as our was?

NuckingFacker · 06-07-2013 10:09PM

K.Flyer wrote: »

Ok. so why do some people keep refering to Icelands experienve and how would it have been so different for us if we had of done as they did.
I know they are still not in the clear, but by some accounts they are doing better than we are. Or is it a case that their "bubble"was not as overinflated as our was?

Their bubble was even bubblier. Just look at kaupthing and their massive exposures. GTBF usually works wonders. It just takes a lot of guts and confidence, somthing our esteemed leaders lack in spades.

lkionm · 06-07-2013 10:13PM

NuckingFacker wrote: »

I don't agree with your premise. At all. The EU would have had to act to maintain the Euro, anglo and it's bondholders could have GTBF and a smaller deposit guarantee scheme could have been implemented.

The financial markets have the memory of a goldfish and there's always new "Investors", i.e gamblers, ready for a fresh punt at a profit. It's all moot now anyway, they goofed, we're paying and I doubt the goof was an accident.. Loads of people did rather nicely out of it all.

Yes they would have and we would have been bailed out but at a much higher cost of the IMF taking control of our finances and cutting everything until it balanced. They are not running for re election. The euro would have stayed with us going bust and leaving but that would be worse for us.

Our bonds would be worth dirt and no one would invest or buy dirt bonds no matter how wishful thinking it is to think sure someone will buy it. No one will invest in an economy for years until it is stable. Investors like stabilty, you dont see many sub saharan economies getting invested in.

Where would we be if them bastards didnt bail the banks

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