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 Nationalisation Watch / Govt. rethinking 3.5 billion bailout for the banks?

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PostSubject: Re: Nationalisation Watch / Govt. rethinking 3.5 billion bailout for the banks?   Tue Sep 30, 2008 1:57 pm

also, isn't spreadbetting liable to income tax?
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PostSubject: Re: Nationalisation Watch / Govt. rethinking 3.5 billion bailout for the banks?   Tue Sep 30, 2008 1:59 pm

tonys wrote:

It’s interesting both here and on P.ie that those talking panic and generally not in favour of the Governments latest moves are from what might be described as left of the political spectrum.
No surprise really I suppose given that they distrust our economic system to start with, but more interesting still is the attitude of most FG posters who seem to have left aside party politics, gone with their core belief in the market, aren’t for panicking and have welcomed the governments efforts. Hats off to the Ladies & Gentlemen of the blue.

tony,
thats prob the only post of yours i've ever seen where i agree with you 100%.

must go for a lie down!
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PostSubject: Re: Nationalisation Watch / Govt. rethinking 3.5 billion bailout for the banks?   Tue Sep 30, 2008 2:00 pm

I don't follow it but assuming that there hasn't been specific legislation dealing with spread betting I would assume that it is not liable to income tax. You don't pay tax on winnings you make from betting.

That said maybe they have brought in a specific law dealing with betting on financials. I heard that they might be but not sure if they actually have.
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PostSubject: Re: Nationalisation Watch / Govt. rethinking 3.5 billion bailout for the banks?   Tue Sep 30, 2008 2:16 pm

johnfás wrote:
I don't follow it but assuming that there hasn't been specific legislation dealing with spread betting I would assume that it is not liable to income tax. You don't pay tax on winnings you make from betting.

That said maybe they have brought in a specific law dealing with betting on financials. I heard that they might be but not sure if they actually have.

have looked at the revenue website and there is no guidence. on the paddypower website it states that spreadbetting is considered a bet by irish revenue so therefore tax exempt.

i mistakenly thought that any "tax free" winnings had to be with/from a recognised bookmaker and not (essentially) with another person through the facilitating websites that spreadbetting exists on.
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PostSubject: Re: Nationalisation Watch / Govt. rethinking 3.5 billion bailout for the banks?   Tue Sep 30, 2008 2:33 pm

tonys wrote:

It’s interesting both here and on P.ie that those talking panic and generally not in favour of the Governments latest moves are from what might be described as left of the political spectrum.
No surprise really I suppose given that they distrust our economic system to start with, but more interesting still is the attitude of most FG posters who seem to have left aside party politics, gone with their core belief in the market, aren’t for panicking and have welcomed the governments efforts. Hats off to the Ladies & Gentlemen of the blue.

Sometimes panic is healthy. When there is a fire in the house it is useful to move quickly.

As someone on the left of the spectrum, I would agree that the left has little confidence in the economic system. My lack of core belief in the market leads me to think that we need an alternative to this profoundly unstable, unequal and environmentally damaging way of doing business.

The biggest panic talkers imo have been Paulson and Bush, down on their knees (literally) shaking and stupified that their house of cards is clattering around their ears. Goldman Sachs has been threatening global meltdown if they are not given a government hand out.

I would welcome any effort that looked as though government knew what they are doing, and intended to try to protect the people of this country and others from impoverishment.
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PostSubject: Re: Nationalisation Watch / Govt. rethinking 3.5 billion bailout for the banks?   Tue Sep 30, 2008 2:40 pm

Well, well, well. A bold move from the government. It's just assumed c €500 in liabilities. Bloomberg has already announced that the cost of Irish govt borrowing has risen evidenced by the doubling of the swap risk spread on the open markets. This will only cost the tax payer an additional c. €50 million on interest this coming year. Peanuts when you measure it against e-voting machines and other cost over-runs in the past. (source = property pin where bloomberg source is noted).

On the positive side, the govt has all but stopped at run on Irish banks.* While the govt doesn't have to stump up one penny, the gauantee on a vast majority of liquid assets like bonds will stem any uncertainty about their risk. If the banks take time during the next two years to clean up their balance sheets by writing off the property developement loans, etc., with some recapture of capital, this plan might just work.

On the downside. If the banks take this as a sign to begin doing business as usual while rolling-over their under-performing or non-performing developer loans in the hope that they can get the real estate juggernaut rolling again and so bail out the developers, all hope is lost. My greatest fear, that the govt would find a way to prop up our highly over-inflated property and economy, will have been realised.

I not sure but I think we're the first nation in the world to write a completely blank cheque for the financial industry. There are a few strings attached in the form of fees charged to banks but they are unspecified as yet. Essentially the government has written the largest put option in the world's history. After ten years of unprecedented lending on which many loans cannot be repaid in a timely fashion, our governemnt has written an insurance policy which forgives the banks their past indescressions. "That's ok lads and lassies, you just keep lending. If you get it wrong, as you just have done, we'll gaurantee you're lending practices with taxpayer's wealth."

We should not forget that the Irish banks have very little exposure to US sub-prime debt. This gaurantee is covering the lending practices that have taken place in Ireland and to mainly Irish people who've invested hugely in the UK property market. There may be an international crisis but we have created the conditions for the international crisis to have a massive impact on our own financial sitution. The upshot is that the government, without a Dáil debate or public consultation of any type, has just handed the taxpayer a huge potential liability. They have taken on massive risk without supplying appropriate reward for the taxpayer. We all had better hope this works as planned.

There is one happy individual in Ireland today. A certain business mogul who bought a c. 20% in Anglo will probably be having a party tonight.


*I have to surmise that the Irish financial system was near meltdown or they wouldn't have taken this drastic action.
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PostSubject: Re: Nationalisation Watch / Govt. rethinking 3.5 billion bailout for the banks?   Tue Sep 30, 2008 2:43 pm

tonys wrote:

It’s interesting both here and on P.ie that those talking panic and generally not in favour of the Governments latest moves are from what might be described as left of the political spectrum.
No surprise really I suppose given that they distrust our economic system to start with, but more interesting still is the attitude of most FG posters who seem to have left aside party politics, gone with their core belief in the market, aren’t for panicking and have welcomed the governments efforts. Hats off to the Ladies & Gentlemen of the blue.

Did ye have a chat with Richard last night Wink

This is a textbook mechanism and generally theoretical I'd have thought - resorting to it would take a bit of nerve and awareness that your banks weren't very bad bets. Could we see an Irish Fanny and Freddia yet - Fionuala agus Fiachra or Finbarr agus Fiona. I'm sure I could think of acronyms for them later. As EVM says there on the ISEQ thread - this is better than a 700 billion shot in the arm - confidence is key but it's worrying that it had to come to this. The Tickerforum guy on our portal, kdenninger, has been saying this too about the US situation. He's also been talking about de-leveraging and here that would translate into ability to pay your debts. Will we see a change in the bankruptcy laws too?

Overall it suggests that the banks (and the underlying economy) are in sound shape and I'm wondering what the deep-down in the bowels ECB policies are in the event of this type of hysteria - haven't they already supported bailouts in the EU? Are ye sure that all eventualities are covered?
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PostSubject: Re: Nationalisation Watch / Govt. rethinking 3.5 billion bailout for the banks?   Tue Sep 30, 2008 2:48 pm

rockyracoon wrote:
Well, well, well. A bold move from the government. It's just assumed c €500 in liabilities. Bloomberg has already announced that the cost of Irish govt borrowing has risen evidenced by the doubling of the swap risk spread on the open markets. This will only cost the tax payer an additional c. €50 million on interest this coming year. Peanuts when you measure it against e-voting machines and other cost over-runs in the past. (source = property pin where bloomberg source is noted).

On the positive side, the govt has all but stopped at run on Irish banks.* While the govt doesn't have to stump up one penny, the gauantee on a vast majority of liquid assets like bonds will stem any uncertainty about their risk. If the banks take time during the next two years to clean up their balance sheets by writing off the property developement loans, etc., with some recapture of capital, this plan might just work.

On the downside. If the banks take this as a sign to begin doing business as usual while rolling-over their under-performing or non-performing developer loans in the hope that they can get the real estate juggernaut rolling again and so bail out the developers, all hope is lost. My greatest fear, that the govt would find a way to prop up our highly over-inflated property and economy, will have been realised.

I not sure but I think we're the first nation in the world to write a completely blank cheque for the financial industry. There are a few strings attached in the form of fees charged to banks but they are unspecified as yet. Essentially the government has written the largest put option in the world's history. After ten years of unprecedented lending on which many loans cannot be repaid in a timely fashion, our governemnt has written an insurance policy which forgives the banks their past indescressions. "That's ok lads and lassies, you just keep lending. If you get it wrong, as you just have done, we'll gaurantee you're lending practices with taxpayer's wealth."

We should not forget that the Irish banks have very little exposure to US sub-prime debt. This gaurantee is covering the lending practices that have taken place in Ireland and to mainly Irish people who've invested hugely in the UK property market. There may be an international crisis but we have created the conditions for the international crisis to have a massive impact on our own financial sitution. The upshot is that the government, without a Dáil debate or public consultation of any type, has just handed the taxpayer a huge potential liability. They have taken on massive risk without supplying appropriate reward for the taxpayer. We all had better hope this works as planned.

There is one happy individual in Ireland today. A certain business mogul who bought a c. 20% in Anglo will probably be having a party tonight.


*I have to surmise that the Irish financial system was near meltdown or they wouldn't have taken this drastic action.

Interesting post rockyracoon. Nothing in it I'd disagree with. I've been writing a while about how shocking I find the Government's disregard of the Dail. No chance of any debate, discussion or testing out of ideas.

Maybe what they should have done is nationalised and handed out a few shares to each of us for us to worry about. Mad

You're not going to tell us who bought?
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PostSubject: Re: Nationalisation Watch / Govt. rethinking 3.5 billion bailout for the banks?   Tue Sep 30, 2008 2:50 pm

tonys wrote:

It’s interesting both here and on P.ie that those talking panic and generally not in favour of the Governments latest moves are from what might be described as left of the political spectrum.
No surprise really I suppose given that they distrust our economic system to start with, but more interesting still is the attitude of most FG posters who seem to have left aside party politics, gone with their core belief in the market, aren’t for panicking and have welcomed the governments efforts. Hats off to the Ladies & Gentlemen of the blue.

Flattery will get you nowhere ya chancer Very Happy

It is a good move - confidence is everything in economic activity - doesnt matter what economic system you have. Credit where credit is due and full marks to Lenihan and Cowan for having the balls to run with it - I really feared we would go down the usual FF routine of finally doing the right thing after exhausting every other available option first - this is ahead of the curve and Im totally with McWilliams in regard to this option - and it will work.

It will bring badly needed stability to the financial system here and I can see other countries going with the same gig.

Still it wont stop property prices falling, might even encourage the banks to finally stick the knife in overleveraged developers - but at least the whole system wont come crashing down around our ears, turning a recession into a depression and killing off new and small business in the tech sector - which are the future or our economy and this lack of credit was threatening to strangle them all - my own company in this sector has probably got days to live - but I cant blame that entirely on external factors.

That said - Do I have any faith in FF to really reform the public sector, promote indigineous business ,institute real institutional reform..........................I do in my Wink

Still political hostilities halted for this measure - its important for all of us and ,dont worry us blueshirts will be watching developments very closely.

I know all the Chickenlickens were hoping FG would stick in the knife and are now literally raging that we are supporting the measure - but ,hey, like any of them would vote for us in a fit anyway!
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PostSubject: Re: Nationalisation Watch / Govt. rethinking 3.5 billion bailout for the banks?   Tue Sep 30, 2008 3:05 pm

rockyracoon wrote:
I not sure but I think we're the first nation in the world to write a completely blank cheque for the financial industry. There are a few strings attached in the form of fees charged to banks but they are unspecified as yet. Essentially the government has written the largest put option in the world's history. After ten years of unprecedented lending on which many loans cannot be repaid in a timely fashion, our governemnt has written an insurance policy which forgives the banks their past indescressions. "That's ok lads and lassies, you just keep lending. If you get it wrong, as you just have done, we'll gaurantee you're lending practices with taxpayer's wealth."

We should not forget that the Irish banks have very little exposure to US sub-prime debt. This gaurantee is covering the lending practices that have taken place in Ireland and to mainly Irish people who've invested hugely in the UK property market. There may be an international crisis but we have created the conditions for the international crisis to have a massive impact on our own financial sitution. The upshot is that the government, without a Dáil debate or public consultation of any type, has just handed the taxpayer a huge potential liability. They have taken on massive risk without supplying appropriate reward for the taxpayer. We all had better hope this works as planned.

There is one happy individual in Ireland today. A certain business mogul who bought a c. 20% in Anglo will probably be having a party tonight.


*I have to surmise that the Irish financial system was near meltdown or they wouldn't have taken this drastic action.

To me this smacks of utter desperation. It is at best a pure gamble. They have written a guarantee for institutions, but how much do they actually know about them and their viability? If any of them do start going down what then? This is a gamble.

The alternative would have been one or two Banks going down. Would that have been that bad? They may still fail. I agree they are as likely to return to the property market.

Moral of this tale is if you are a Bank you can do as you please because the government will not let you fail. If instead you make wingnuts not only do you not matter but you have to pay for the bail outs.
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PostSubject: Re: Nationalisation Watch / Govt. rethinking 3.5 billion bailout for the banks?   Tue Sep 30, 2008 3:13 pm

cactus flower wrote:
Interesting post rockyracoon. Nothing in it I'd disagree with. I've been writing a while about how shocking I find the Government's disregard of the Dail. No chance of any debate, discussion or testing out of ideas.

Maybe what they should have done is nationalised and handed out a few shares to each of us for us to worry about. Mad

You're not going to tell us who bought?

Never worry. If everyone owned a piece of the banks, we'd all become clued up on how they operate and demand they do so in a prudent manner in order to protect our investments. Anyway, the banks, like most big businesses, ensure that a proper number of controlling shares are held by the "right" people.

About Anglo. This about one of the largest private insurers in Ireland. He lost mega-Euros on CFD betting on Anglo and ended up taking a big equity stake. Some people just get the breaks. I wish someone would pass laws that gave "me" preferential treatment. (There is a thread on proprety pin all aboot it.)

On the confidence thingy. There is confidence borne out by past experience in which you know that parties conducting business are prudent and just plain up to the job. You have a means to measure their performance and a means to penalise bad performance. This notion has been turned on its head in the West. We give unduely high rewards to CEO's whose performances are often adequate at best. We have just now rewarded people, who over a decade of unprudent lending and excess building, are the very people who have put us in this position. Does one call this confidence building?

Many, if not most, will herald this as a stroke of genius. It doesn't inspire undue confidence for me personally. The government has just added c. €500 billion to the Irish National balance sheet in liabilities. If something goes wrong, I and every other tax payer will be paying for this one-sided gamble for a long time to come. Until recently I was trading various instruments. I wish someone in the government would call down to me and say: "Take on all the risk you want. If you have losing positions, we'll cover the losses from the tax-payer coffers. If you make money, keep it." This is what the government has just said to Irish banks.

For over a decade the government has transferred massive tax generated wealth to individuals in the form of land purchases, quangos and simply setting up construction companies for infrastructure projects. Meanwhile, I have to pay for every service I avail of and ususally to companies that were set up through the tranfer of tax-payers money in the first place. Nice if you belong to the right crowd. And now the government has just rewarded over a decade of proflgate lending with a no-fault insurance policy. And I'm supposed to be confident? Of what? That things will change for the better of the average wage earner? Not likely.
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PostSubject: Re: Nationalisation Watch / Govt. rethinking 3.5 billion bailout for the banks?   Tue Sep 30, 2008 3:23 pm

rockyracoon wrote:
cactus flower wrote:
Interesting post rockyracoon. Nothing in it I'd disagree with. I've been writing a while about how shocking I find the Government's disregard of the Dail. No chance of any debate, discussion or testing out of ideas.

Maybe what they should have done is nationalised and handed out a few shares to each of us for us to worry about. Mad

You're not going to tell us who bought?

Never worry. If everyone owned a piece of the banks, we'd all become clued up on how they operate and demand they do so in a prudent manner in order to protect our investments. Anyway, the banks, like most big businesses, ensure that a proper number of controlling shares are held by the "right" people.

This about one of the largest private insurers in Ireland. He lost mega-Euros on CFD betting on Anglo and ended up taking a big equity stake. Some people just get the breaks. I wish someone would pass laws that gave "me" preferential treatment.

On the confidence thingy. There is confidence borne out by past experience in which you know that parties conducting business are prudent and just plain up to the job. You have a means to measure their performance and a means to penalise bad performance. This notion has been turned on its head in the West. We give unduely high rewards to CEO's whose performances are often adequate at best. We have just now rewarded people, who over a decade of unprudent lending and excess building, are the very people who have put us in this position. Does one call this confidence building?

Many, if not most, will herald this as a stroke of genius. It doesn't inspire undue confidence for me personally. The government has just added c. €500 billion to the Irish National balance sheet in liabilities. If something goes wrong, I and every other tax payer will be paying for this one-sided gamble for a long time to come. Until recently I was trading various instruments. I wish someone in the government would call down to me and say: "Take on all the risk you want. If you have losing positions, we'll cover the losses from the tax-payer coffers. If you make money, keep it." This is what the government has just said to Irish banks.

For over a decade the government has transferred massive tax generated wealth to individuals in the form of land purchases, quangos and simply setting up construction companies for infrastructure projects. Meanwhile, I have to pay for every service I avail of and ususally to companies that were set up through the tranfer of tax-payers money in the first place. Nice if you belong to the right crowd. And now the government has just rewarded over a decade of proflgate lending with a no-fault insurance policy. And I'm supposed to be confident? Of what? That things will change for the better of the average wage earner? Not likely.

I thought the Paulson Bailout at two pages was short. This seems to be the Government hand out.

Government statement on guarantee arrangement
"Government to guarantee all deposits in Irish banks | 30/09/2008The Government has decided to put in place with immediate effect a guarantee arrangement to safeguard all deposits (retail, commercial, institutional and interbank), covered bonds, senior debt and dated subordinated debt (lower tier II), with the following banks: Allied Irish Bank, Bank of Ireland, Anglo Irish Bank, Irish Life and Permanent, Irish Nationwide Building Society and the Educational Building Society and such specific subsidiaries as may be approved by Government following consultation with the Central Bank and the Financial Regulator.

It has done so following advice from the Governor of the Central Bank and the Financial Regulator about the impact of the recent international market turmoil on the Irish Banking system.

The guarantee is being provided at a charge to the institutions concerned and will be subject to specific terms and conditions so that the taxpayers’ interest can be protected. The guarantee will cover all existing aforementioned facilities with these institutions and any new such facilities issued from midnight on 29 September 2008, and will expire at midnight on 28 September 2010.

The decision has been taken by Government to remove any uncertainty on the part of counterparties and customers of the six credit institutions. The Government’s objective in taking this decisive action is to maintain financial stability for the benefit of depositors and businesses and is in the best interests of the Irish economy.

The Financial Regulator has advised that all the financial institutions in Ireland will continue to be subject to normal ongoing regulatory requirements.

This very important initiative by the Government is designed to safeguard the Irish financial system and to remedy a serious disturbance in the economy caused by the recent turmoil in the international financial markets."

"senior debt and dated subordinated debt (lower tier II)", - what are these? And what I wonder are the terms and conditions? Any bets they are writing them now?

Link to Brian Lenihan speaking on RTE this morning: http://www.irishtimes.com/newspaper/breaking/2008/0930/breaking7.html?via=rel
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PostSubject: Re: Nationalisation Watch / Govt. rethinking 3.5 billion bailout for the banks?   Tue Sep 30, 2008 3:43 pm

I would suggest that the Government were faced with the possibility (perhaps slim) of bankruptcy of Irish Banks today a la Lehman Brothers, i.e., it's over, your out of a job as of now. And anyway, a long document denotes complexity and weaknesses. What is needed now is clarity and a short document/statement was most appropriate for that very reason. As the saying (of some former US President) goes, "I would have written something shorter but I didn't have the time".

In essence, you can't dither while the sh_t is in mid air and the fan is whirring - you've got reach out there like DJ Carey and grab that sh-t while it is still in one piece. You may even have to eat the sh_t to stop the stink emptying the room pronto. It's a tough decision that only those with strong stomachs can take. Brian Cowen is that kind of guy. Metaphor me up.
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PostSubject: Re: Nationalisation Watch / Govt. rethinking 3.5 billion bailout for the banks?   Tue Sep 30, 2008 3:52 pm

Zhou_Enlai wrote:
I would suggest that the Government were faced with the possibility (perhaps slim) of bankruptcy of Irish Banks today a la Lehman Brothers, i.e., it's over, your out of a job as of now. And anyway, a long document denotes complexity and weaknesses. What is needed now is clarity and a short document/statement was most appropriate for that very reason. As the saying (of some former US President) goes, "I would have written something shorter but I didn't have the time".

In essence, you can't dither while the sh_t is in mid air and the fan is whirring - you've got reach out there like DJ Carey and grab that sh-t while it is still in one piece. You may even have to eat the sh_t to stop the stink emptying the room pronto. It's a tough decision that only those with strong stomachs can take. Brian Cowen is that kind of guy. Metaphor me up.

I agree with you about all of the above. I would add that most of it is Mr. Cowen's own home grown sh_t.

Even if you allowed him the mistake of producing it in the first place, he has now had well over a year to think about what to do about it.

And when the sh_t settles, it remains to be seen who will be left holding it.
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PostSubject: Re: Nationalisation Watch / Govt. rethinking 3.5 billion bailout for the banks?   Tue Sep 30, 2008 3:59 pm

Zhou_Enlai wrote:
I would suggest that the Government were faced with the possibility (perhaps slim) of bankruptcy of Irish Banks today a la Lehman Brothers, i.e., it's over, your out of a job as of now. And anyway, a long document denotes complexity and weaknesses. What is needed now is clarity and a short document/statement was most appropriate for that very reason. As the saying (of some former US President) goes, "I would have written something shorter but I didn't have the time".

In essence, you can't dither while the sh_t is in mid air and the fan is whirring - you've got reach out there like DJ Carey and grab that sh-t while it is still in one piece. You may even have to eat the sh_t to stop the stink emptying the room pronto. It's a tough decision that only those with strong stomachs can take. Brian Cowen is that kind of guy. Metaphor me up.

Well, he looks like he has won many an iron stomach competition in his day!!! Laughing
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PostSubject: Re: Nationalisation Watch / Govt. rethinking 3.5 billion bailout for the banks?   Tue Sep 30, 2008 4:21 pm

Let us not forget the thousands of people on average incomes, particularly the self employed, who are heavily exposed to the stock exchange with personal pensions rockyracoon. Whilst you are correct that some very wealthy people will benefit. It is also the case that very many ordinary hard working people who saved all their lives might stand a chance of not having that completely wiped away. God knows they've already had most of it wiped away.
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PostSubject: Re: Nationalisation Watch / Govt. rethinking 3.5 billion bailout for the banks?   Tue Sep 30, 2008 4:22 pm

cactus flower wrote:
"senior debt and dated subordinated debt (lower tier II)", - what are these? And what I wonder are the terms and conditions? Any bets they are writing them now?

I'm sure the tickerman eludes to it about 4 minutes in when he's talking about the stripping of WaMu. There's a graphic in rocky's other video too of the same thing. In short, it's bigger money than shareholders and is more heavily insured - usually. I'm sure someone will explain that better to you.

http://ie.youtube.com/watch?v=lsC2k9opOP0&feature=user
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PostSubject: Re: Nationalisation Watch / Govt. rethinking 3.5 billion bailout for the banks?   Tue Sep 30, 2008 5:28 pm

johnfás

What happens if a Bank now abuses its favoured position? What happens if one of the chosen starts to splutter? The 'deal' if that is the correct term is reckless. The Swedish model would have been a better way to proceed.
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PostSubject: Re: Nationalisation Watch / Govt. rethinking 3.5 billion bailout for the banks?   Tue Sep 30, 2008 5:48 pm

I'm not defending the deal per se, Squire. However, given that wealthy people tend to have shareholdings in banks it is likely that any deal which ensures the continued viability of banks will benefit them. That said, it will also benefit all shareholders. The vast majority of these shareholders are perfectly ordinary working men and women who, over the past year, have seen their life savings washed away.

I am all for a better deal, if one is on offer. I do not pretend to have the economic mind to construct such a deal nor do I currently have the time on my hands to explore the model which was put in place by Sweden. However, the notion that these deals primarily bail out rich people is a nonsense. I could name you countless people whom I know who are approaching retirement in the next few years following a lifetime of self employment without the benefit of company pension schemes and in particular define benefit schemes. These people have had literally hundreds of thousands wiped off their pensions. Most of these people are not Seán Quinn and it is a slur to imply that they are.
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PostSubject: Re: Nationalisation Watch / Govt. rethinking 3.5 billion bailout for the banks?   Tue Sep 30, 2008 6:00 pm

johnfás wrote:
Most of these people are not Seán Quinn and it is a slur to imply that they are.

What an interesting turn of phrase, are you suggesting that being inferred as being in the same category as Seán Quinn or akin to him is in some way is a slur? Evil or Very Mad
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PostSubject: Re: Nationalisation Watch / Govt. rethinking 3.5 billion bailout for the banks?   Tue Sep 30, 2008 6:07 pm

Nope but inferring that the average person who benefits from the continued viability of a bank has the financial resources, akin to Seán Quinn, to withstand the bank's collapse is.

Seán Quinn can lose 500 million and still have over a billion in the kitty, enough for 1,000 people to be net millionaires.

On the otherhand there are thousands of people who have worked hard all their lives and will live in poverty if their pensions continue to show the volatility which they are presently. As I stated before, most of these people are not super-rich.
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PostSubject: Re: Nationalisation Watch / Govt. rethinking 3.5 billion bailout for the banks?   Tue Sep 30, 2008 6:27 pm

johnfás wrote:
Nope but inferring that the average person who benefits from the continued viability of a bank has the financial resources, akin to Seán Quinn, to withstand the bank's collapse is.

Seán Quinn can lose 500 million and still have over a billion in the kitty, enough for 1,000 people to be net millionaires.

On the otherhand there are thousands of people who have worked hard all their lives and will live in poverty if their pensions continue to show the volatility which they are presently. As I stated before, most of these people are not super-rich.

Lord only knows, I don't like playing Cassandra (not chicken licken Edo - for a lot of people the sky has already fallen in). But I agree with you johnfas (whilst not disagreeing with the Squire). A lot of very hard working people (including believe it or not hard working builders) will be left with less than nothing and no employment. The pattern being played out means that only the mega wealthy can benefit. Anyone left with cash in the next year will be able to buy the rest of what's left for peanuts. You can see it already with the bank takeovers - hundreds of banks are expected to go in the States, mainly small ones.

It is hard to grasp that in the predicament we are in now, in which most people still think collectively about what would be good for the population as a whole, there is a group of powerful big players who look on this situation as a hunting ground.

Personally, I am enormously encouraged that the people in the US not only say through this but als said no to it and turned enough of their Congress representatives to say no on their behalves.

We weren't even given the opportunity to look at the Government's proposals. They have enough track record of cock up for any reasonable person to think that even
if they didn't intentionally draw this thing up like a broken colander, they will have done if by default.

The problem from now is that there is no going back from this. If the Government came out at any stage from now on and said they wanted to change the scheme it would be signal to all to bail out of the Irish banks.

I find it hard to think of it as a democracy when a decision like this is taken with zero debate, information or consensus.

Zhou puts up a good argument that it was an emergency, but plenty of us have been saying its an emergency for the last six months or much more. A decision of this magnitude should not have been made on the spur of the moment. Failure of Irish banks has been on the card for a long, long time.
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PostSubject: Re: Nationalisation Watch / Govt. rethinking 3.5 billion bailout for the banks?   Tue Sep 30, 2008 6:40 pm

I think it is all well and good to talk about destruction of wealth on a theoretical level. However, what is happening at the moment is not on a theoretical level. The destruction of pensions in particular does not only effect those people who are unfortunate to be coming up to retirement. It will also create a greater burden on the social resources of the State in years to come as people of that age do not have the resources in terms of years to recoup the major losses as say an invester in their early 40s does.

It is all well and good for the Government to scrap the medical card for all the over 70s and bring back in means testing as was reported in the Sunday Independent. However, the way things are currently going there will be vastly more people over the age of 70 in a few years time who will qualify for all these means tested services anyway. Consequently even if we stand by and let things disintegrate even further it will still be the tax payer picking up the tab either way just in a different guise.

Consequently the protection of savings and investments, even if it does benefit the wealthy is not a bad thing. It is far better than burdening the state with poverty stricken pensioners for several decades.
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PostSubject: Re: Nationalisation Watch / Govt. rethinking 3.5 billion bailout for the banks?   Tue Sep 30, 2008 6:44 pm

johnfás wrote:
I think it is all well and good to talk about destruction of wealth on a theoretical level. However, what is happening at the moment is not on a theoretical level. The destruction of pensions in particular does not only effect those people who are unfortunate to be coming up to retirement. It will also create a greater burden on the social resources of the State in years to come as people of that age do not have the resources in terms of years to recoup the major losses as say an invester in their early 40s does.

It is all well and good for the Government to scrap the medical card for all the over 70s and bring back in means testing as was reported in the Sunday Independent. However, the way things are currently going there will be vastly more people over the age of 70 in a few years time who will qualify for all these means tested services anyway. Consequently even if we stand by and let things disintegrate even further it will still be the tax payer picking up the tab either way just in a different guise.

Consequently the protection of savings and investments, even if it does benefit the wealthy is not a bad thing. It is far better than burdening the state with poverty stricken pensioners for several decades.

I'm in total agreement but I don't think that the Government will achieve protection of older people through what they have just done.
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PostSubject: Re: Nationalisation Watch / Govt. rethinking 3.5 billion bailout for the banks?   Tue Sep 30, 2008 6:46 pm

True for johnfás - real savings and wealth could be destroyed. However, those depositors have the freedom to move their savings and indeed invested pensions should possibly be protected if they weren't invested on the stock market. To cactus - was there the time for debate? And ... Was it anti competitive?

EU executive to study Irish bank account guarantee
Quote :
BRUSSELS, Sept 30 (Reuters) - The European Commission said on Tuesday it would study details of Ireland's decision to guarantee all bank deposits to see whether the move complied with European Union competition rules. "We have been in close touch with the Irish authorities. If there is any state aid involved we will look at it as a matter of urgency. We expect the details to be notified to the Commission very shortly," a Commission spokesman said.
What a Face
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