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Property Developers have YOUR money!!

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    #62
    [Deleted User]
    Posts: 0 ✭ [Deleted User]


    Have a look at the dates in this thread - very telling

    Pensions is the next big thing - try look after your future retirements, i foresee alot of problems


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    #63
    kippy
    Registered Users Posts: 18,393 ✭✭✭✭kippy


    Deleted User wrote: »
    Have a look at the dates in this thread - very telling

    Pensions is the next big thing - try look after your future retirements, i foresee alot of problems

    Hindsight is 20/20
    Still, not one Irish depositor has lost one cent as a result of a bank failing...........
    Tax payers on the other hand.........well.........


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    #64
    TwoShedsJackson
    Closed Accounts Posts: 9,438 ✭✭✭TwoShedsJackson


    infinity&beyond wrote: »
    Just to be clear, I'm not saying that house prices aren't falling or that developers won't get into trouble (some of them already are). But Irish banks have a sizable exposure to mortgages (VERY safe....again in the UK early 90s situation, mortgage loans written off were less than 0.2% of total). And lending to developers is not a total dead duck - the bank has the land as collateral, and the developer will have to put some money up front himself. So if the bank sells the land for say (I'm guessing) 80% of its appraised value, they'll probably get most of their cash back.

    Finally, just in case we all jump off a cliff in a state of depression, the Irish consumer is extremely robust right now. At least for now the residential construction problems look fairly contained, and slack is being taken up by infrastructure construction. Irish unemployment remains low, wage growth is strong and interest rates are low by historic standards. Yes, their will be casualties, but life will go on for the banks. That's their business model -- they write loans knowing that some of them will go bad.

    The Irish banks appear to be prudently funded, with a much better duration match between their funding and their customer loans. In fact they don't need to look for funding for the rest of the year.

    Hope this helps / clears up a few things. But I expect I'll be attacked by the end of the world-ers for my comments.

    'Appear' really is the operative word in that second last paragraph.

    I hope Infinity & Beyond comes back to revisit this analysis in the light of what's happened since.


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    #65
    Treehouse72
    Registered Users Posts: 1,003 ✭✭✭Treehouse72


    Deleted User wrote: »
    Have a look at the dates in this thread - very telling


    Absolutely....where the hell was Morgan Kelly before October 2007?


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