The Big Bailout of the Eurozone (Another crisis coming? - Seriously)

[Bogball XV]

Listening to FG national conference on rte on line.

Fianna Gael are going to win the next election (apparently), because Fianna Fael have run the country into the grounds and caused the crisis. Is there much that FF could have doen to soften the crisis blow (ignoring daft mortgage agreements)?

don't start me - they were an absolute disaster, bertie (god love him) was the absolutely worst person we could possibly have had in charge for the past 10yrs.

[ardal]

Listening to FG national conference on rte on line.

Fianna Gael are going to win the next election (apparently), because Fianna Fael have run the country into the grounds and caused the crisis. Is there much that FF could have doen to soften the crisis blow (ignoring daft mortgage agreements)?

don't start me - they were an absolute disaster, bertie (god love him) was the absolutely worst person we could possibly have had in charge for the past 10yrs.

Ok Start. Which Irish politician would have done anything differently; I'll accept "unsupported fact", in your argument

[the Deel Rover]

I don't particularly like McWilliams but it is hard to argue with his article yesterday:

http://www.independent.ie/opinion/analysis/act-now-minister-or-we-will-all-live-to-regret-it-1544060.html

[b]Act now, minister, or we will all live to regret it[/b]

Wednesday November 19 2008

"Any recapitalisation must also come with debt forgiveness for first-time buyers and the hundreds of thousands in negative equity.

There will be no recovery if an entire generation is burdened with enormous mortgage debts on houses that will not recover in value for years.

Many might argue that this penalises those who didn't get involved in the property madness. This is true, but there are things that we must do in emergencies, however unpalatable"

I didn't expect McWilliams to come out with this proposal. i'd hope he gets on his soapbox and shouts it out.
Though it is not his own idea.
The anti deregulation economists have been crying out for this since Freddie May collapse, why write off Wall st debts with Bn's taxpayer money which has no effect on the people who are struggling?
Capital can be put into the banks from the bottom up and write off a portion of first time buyers overpriced mortgage.

I think it's fair enough, people bought house at overpriced values, this method would bring it down for first buyers to something more realistic.

If they do that, there isn't a flight that would take me out of the country quick enough. I've paid taxes for all kinds of waste so far, but the idea of savings that I've worked hundreds of extra hours for being used to compensate people who bought houses they couldn't afford would be the final straw. Nobody forced anyone to buy a house in this country. Renting was extremely reasonable, there was no shortage of supply, some people just weren't able to resist buying their "dream home" despite the fact that it was way out of their price range.

I'd have nothing but sympathy for someone who borrowed within their means (a mortgage of no more than 3.5 times the first annual income not including overtime plus 1.5 times the second, having saved a deposit of at least 10% of the cost of the house plus the stamp) and has suddenly lost their job, but all these people who were working low paid jobs but still insisted on borrowing 300k or more, that was just lunacy. The fact that the bank gave it to them means that the banks officials should suffer, but not that the borrowers were blameless. My bank cold called me looking to sell me loans and mortgages several times, but I knew that I wasn't in a position to commit 50% of my wage to mortgage payment. I never begrudged all those who benefitted from their profligacy when house prices were going up, why should I then bail out the last layer of participants in the nationwide pyramid scheme when the arse finally fell out of it?

This country and all who sail in her can feck off if my they think that an appropriate reward for people who stood by and simply worked away, while countless others were looking for the quick buck that endless house prices rises appeared to offer, is a hand dipped into their pocket to keep everyone else in the lifestyle to which they've become accustomed. Now if you want to talk about penalising those who coined it on the way up, such as everyone who sold a house between 2003 and 2006, then by all means - but this is Ireland, the fair solution will never be taken when you can just penalise those who had sense. Equally, if you want to change the bankruptcy laws so that someone who can't pay the mortgage simply has to give up their house and savings but can then walk away and begin again renting like the rest of us, then that would be fine too. Not the rest of us continuing to leave in low grade rented accomodation, all because our taxes are high to subsidise those who bought nice places they couldn't afford.  

I'm sorry if this comes across as harsh or unfeeling, but anyone who did even a modicum of research on the way up should have known that some fall in house prices was possible. Those who could afford it anyway don't need help, and those who couldn't be bothered finding out that basic fact don't deserve it.  

Your absolutely spot on there Lone shark no one was forced to go out and buy a house i know the banks have a lot to answer for for giving out the money so easily yet peope have to realaise that  it was their choice to purchase their property no one forced a gun to their heads to make them buy it. I purchased a house that i could afford the reason been at the time there was very little difference between renting one and the mortgage repayments and i'm glad i did however i had to be realastic a t the time i'm sure i could have gotten more money to buy a more expensive one but i decided against it because i was happy with my lot and that i would still have a quality of life after my mortgage payment went through.     

[Lone Shark]

Listening to FG national conference on rte on line.

Fianna Gael are going to win the next election (apparently), because Fianna Fael have run the country into the grounds and caused the crisis. Is there much that FF could have done to soften the crisis blow (ignoring daft mortgage agreements)?

Ample.

(1) Everyone's talking about loosening the fiscal purse strings to compensate for the downturn, but while everyone likes to talk Keynesian when the bad times hit, these people are nowhere to be found when it's moolah all round. We're going to have a minimum 8% budget deficit next year - pray tell, why then did we not have at least 8% budget surpluses in the good times to pay for it? Because that would be less easy than just showering money all round.

(2) When the money was plentiful, no-one cared about waste. Now some aspects of waste have become so embedded that we can't get rid of them.

(3) Implement the Hanley report, we'd have some chance of decent medical services. Not close to everyone, but at least they'd exist.

(4) Implement the Bacon report and we would have deflated the housing bubble a little bit. Tax the living bejeesus out of flippers and specuvestors and we would have deflated it a lot more.

(5) Take real control of the banks. Lending was out of control, but neither the Central Bank nor the Financial regulator did anything. If they won't do their job, put someone in there who will.

(6) Use tax incentives to encourage entrepreneurial activity, export led manufacturing and services, research and development and basically all the things that would pay our way in the world. Not building ten times as many houses as we need in Longford, Leitrim and Cavan.

(7) Ensure that all public service pay negotiations factored in pension benefits, and ensure that benchmarking was two way - wages could go down as well as up. Mine have. Why shouldn't the equivalent civil servant?

( Do more to aid national transport than just building roads. Give people an option for when petrol becomes too expensive.

(9) Penalise corruption at all levels of public office to ensure good governance into the future.

(10) When the downturn hits, create a real and meaningful plan for where we want to be in five years, how we're going to get there and what steps will be involved along the way. Explain how any cuts/tax hikes fit into that plan, how the pain is shared across the board, and how we're all working together to actually get somewhere as a country. Not just wildly hack across the board and tell the people that "it'll all be fine, now go do your Christmas shopping as normal. Confidence and world markets are the only problem, we'll be grand in time. Somehow."

There's ten things, and not one of them cost a penny, simply a case of using existing revenue more wisely.

[Bogball XV]

Listening to FG national conference on rte on line.

Fianna Gael are going to win the next election (apparently), because Fianna Fael have run the country into the grounds and caused the crisis. Is there much that FF could have doen to soften the crisis blow (ignoring daft mortgage agreements)?

don't start me - they were an absolute disaster, bertie (god love him) was the absolutely worst person we could possibly have had in charge for the past 10yrs.

Ok Start. Which Irish politician would have done anything differently; I'll accept "unsupported fact", in your argument

can't be bothered really, i have went through the various arguments too many times in the past, basically, Ahern's style of negotiation was to give everybody what they asked for, resulting in a massively bloated publi sector that we can't afford.  FF in general should have retained the initial bacon recommendations (which they initially implemented, but then bert's builder mates told him it was bad), there were many, many steps they could have taken to take the heat out of the property market, but again they were afraid to tamper with the market until it was too late.  The steps would have been mainly though tax and regulation.
I'm not saying that FG wouldn't have done the same (i believe they would have), but that wasn't your intial question.

[passedit]

Bailout for Bank of Ireland

Aine Coffey

THE Irish government has agreed to take part in a €3 billion (£2 billion) bailout of Bank of Ireland that will be led by private equity. The deal would be the first state aid for an Irish bank.

This week a number of private-equity groups will make proposals to BoI. A condition of the government cash injection will be that new investors are locked in for a set time to ensure they don't try to sell quickly and make a big profit.

Names already linked with a potential investment include Cardinal Asset Management, an Irish investment firm, Sandler O'Neill, Texas Pacific Group and JC Flowers.

Ireland was one of the first countries to respond to the credit crisis with a guarantee for bank liabilities worth some €440 billion, but until now it has not bailed out or nationalised any banks, and they have not raised equity themselves.
Related Links

    * Bank of Ireland confirms bid approach

    * Post Office in talks with Bank of Ireland

Bank of Ireland revealed on Friday it had received unsolicited approaches from several unnamed parties seeking to invest in the group, but said no decision had been made.

Analysts say BoI will need to mollify investors concerned the government is entertaining talks with private-equity groups without consultation.

"The way they are going about it completely undermines the stock exchange," said one investment manager.

"To treat shareholders like this is appalling. If there is an equity rating going on shareholders should be consulted."

Bank of Ireland is 70% owned by overseas institutional investors, with about 10% owned by domestic institutions.

The news came as it emerged that Anglo Irish Bank had secured commitments for a capital-raising exercise believed to be in excess of €1 billion. The bank expects the issue to close early next year.

It is understood that in a lengthy meeting on Thursday night Anglo told Brian Lenihan, the Irish finance minister, it was in a strong position to pursue a course as an independent institution, and it could find enough private capital to bolster its balance sheet. Anglo has retained Morgan Stanley to help it source capital.

Both Anglo and Allied Irish Banks are pushing hard to go it alone as the government attempts to drive consolidation in the Irish banking sector.

Irish Life & Permanent is also keen to stay independent and said on Friday it was in merger talks with EBS. The merging of Permanent TSB, its banking arm, and EBS is believed to have been agreed in principle.

[Declan]

Excellent posts Lone Shark - I'll vote for you!!

[pintsofguinness]

Just reading Darling's proposals for over here and all I can say is what an absoloute pack of idiots there are in charge in both the UK and Ireland.  It would be funny if it wasn't so serious!

[Donagh]

Just reading Darling's proposals for over here and all I can say is what an absoloute pack of idiots there are in charge in both the UK and Ireland.  It would be funny if it wasn't so serious!

I thought they were quite good. More money for pensioners, families and children - can't complain with that.

[Minder]

Where do people think this money is going to come from? The fairies?

[pintsofguinness]

Just reading Darling's proposals for over here and all I can say is what an absoloute pack of idiots there are in charge in both the UK and Ireland.  It would be funny if it wasn't so serious!

I thought they were quite good. More money for pensioners, families and children - can't complain with that.

Aye, you spinning for labour now too  

[pintsofguinness]

Where do people think this money is going to come from? The fairies?

Well I'm no expert but if they're going to raise National INsurance to pay for a VAT cut that few have the money to take advantage of they may as well do nothing. 

[Donagh]

Where do people think this money is going to come from? The fairies?

Are you asking that question or answering it?

[Donagh]

Just reading Darling's proposals for over here and all I can say is what an absoloute pack of idiots there are in charge in both the UK and Ireland.  It would be funny if it wasn't so serious!

I thought they were quite good. More money for pensioners, families and children - can't complain with that.

Aye, you spinning for labour now too  

Taxing the high earners as well. Been waiting over ten years for Labour to do something constructive and it takes a world wide recession to force them into it. Better late than never.

[Donagh]

Where do people think this money is going to come from? The fairies?

Well I'm no expert but if they're going to raise National INsurance to pay for a VAT cut that few have the money to take advantage of they may as well do nothing. 

According a Guardian report I was reading, our house will be hit hardest with the increased NI contributions but I've no problem with that if the money is spent caring for the old and the young.