Pension Fund to be Raided to Bail out the Banks

This is being floated - on Q and A last night for one place. The consensus was that the Guarantee is pure bluff as we don't have any money to back it up with.
The suggestion was that the whole of the 19 billion Pension Fund should be given to the banks. The implication was that if this wasn't done, that they would go under.
It was also suggested that the Pension fund is probably full of virtually worthless paper and has been badly managed.

What conditions should be attached to any bailout?

great idea, its a rainy day fund and i think we all can agree we're in Noah territory at the moment.

the loan of the money should come with stringent conditions and perhaps a couple of directors on the board of every financial institution availing of the facility.

And the jobs of bank chairpersons and executives.

The biggest single reason for any business failure is failure to maintain cashflow and to stay liquid. There are some basic rules of thumb for measuring liquidity that I learned in first year college, but have forgotten them now, but stuff like asset/ liability ratios etc.

So these 'banking experts' on 2 Million quid a year have failed to maintain a healthy asset /working capital base in their banks. That's an F in Business 101. Give me a break.

If my tax euros are used to re-capitalise these banks, I want these guys out. And the regulator too.

The whole concept of watch-dogging is completely screwballs in this country.

The figure of €39 billion loans to developers by the Irish banks was given this morning on RTE.

It is likely that at most a third of those are performing. However they presumably have other loans that are performing. Anyone have an idea of this?

The Pension Fund is about 19 billion is it?

A while back there was a lot of talk about Government using the Pension fund to top up the budget.
Presumably they couldn't do that because they know they have to hold it in reserve to bail out the Banks.

EvotingMachine0197 wrote:

EVM, a picture speaks a thousand words!

If anyone thinks this "loan" would ever be repaid they are dreaming. In 2 months there may not even be a euro

youngdan wrote:

If anyone thinks this "loan" would ever be repaid they are dreaming. In 2 months there may not even be a euro

I hear that it is barter in Iceland already.

No, we should just take a payment holiday on the Fund until about 2010. It'll save us an easy €3 billion without being too disruptive. Half of the savings should go on capital expenditure and the rest bridging the gap in the general government finances.

Ard-Taoiseach wrote:

No, we should just take a payment holiday on the Fund until about 2010. It'll save us an easy €3 billion without being too disruptive. Half of the savings should go on capital expenditure and the rest bridging the gap in the general government finances.

The idea that the fund might be out there buying toxic waste right now is a little worrying.

cactus flower wrote:

Ard-Taoiseach wrote:

No, we should just take a payment holiday on the Fund until about 2010. It'll save us an easy €3 billion without being too disruptive. Half of the savings should go on capital expenditure and the rest bridging the gap in the general government finances.

The idea that the fund might be out there buying toxic waste right now is a little worrying.

It's not to be opened till 2035 so I'm not that worried. It'll have sorted itself out by then and it'll fund the pension requirement.

Ard-Taoiseach wrote:

cactus flower wrote:

Ard-Taoiseach wrote:

No, we should just take a payment holiday on the Fund until about 2010. It'll save us an easy €3 billion without being too disruptive. Half of the savings should go on capital expenditure and the rest bridging the gap in the general government finances.

The idea that the fund might be out there buying toxic waste right now is a little worrying.

It's not to be opened till 2035 so I'm not that worried. It'll have sorted itself out by then and it'll fund the pension requirement.

By 2035, we may have got rid of the concept of money

If you have to go down that route at least get part ownership and let them wait a while longer and make them suffer a little more stress. The money will obtain a greater percentage ownership that way.

Better still why not let them go into receivership? Oops forgot, that guarantee.

Receivership = Firesale ?

Ard-Taoiseach wrote:

cactus flower wrote:

Ard-Taoiseach wrote:

No, we should just take a payment holiday on the Fund until about 2010. It'll save us an easy €3 billion without being too disruptive. Half of the savings should go on capital expenditure and the rest bridging the gap in the general government finances.

The idea that the fund might be out there buying toxic waste right now is a little worrying.

It's not to be opened till 2035 so I'm not that worried. It'll have sorted itself out by then and it'll fund the pension requirement.

Jesus Ard T! 2035 isn't actually that far away - and the idea that things will 'somehow sort themselves out' does not add up to sensible thinking. Tooling around with the pension fund is MADNESS
We have an aging population and the number of retirees will exceed the number of working adults by then. This notion of raiding pension funds is pretty much the equivalent of saying 'lots of old folk are gonna die in misery before their time but at least they won't have been an expense in their old age'. Economic euthanasia, in other words.

What did I tell ya. A-T is dreaming. We are all friends here so it is time for a singsong https://www.youtube.com/watch?v=LOnB_2I31_0&feature=related

yd - thanks for the Dylan - a new one to me.

EvotingMachine0197 wrote:

And the jobs of bank chairpersons and executives.

The biggest single reason for any business failure is failure to maintain cashflow and to stay liquid. There are some basic rules of thumb for measuring liquidity that I learned in first year college, but have forgotten them now, but stuff like asset/ liability ratios etc.

So these 'banking experts' on 2 Million quid a year have failed to maintain a healthy asset /working capital base in their banks. That's an F in Business 101. Give me a break.

If my tax euros are used to re-capitalise these banks, I want these guys out. And the regulator too.

The whole concept of watch-dogging is completely screwballs in this country.

None of these guys will lose anything - their salaries won't even be capped in fact they'll be invited into a special boardroom and onto a special team designed to sort this thing out. They won't even be accountable to the Dáil. The door is closing - "Bye bye lads, we'll sort it all out and send out the couple a billion fee we owe ye all when we can" - the door locks. And this can be allowed to happen here in this country when nothing like that happened in England.

We're well and truly fucked forever in fairness.
http://www.politics.ie/economy/36128-bad-debts-provision-vs-capital-reserves.html

Bank guarantee scheme revealed
http://www.thepropertypin.com/viewtopic.php?f=19&t=14563

Aragon wrote:

Ard-Taoiseach wrote:

cactus flower wrote:

Ard-Taoiseach wrote:

No, we should just take a payment holiday on the Fund until about 2010. It'll save us an easy €3 billion without being too disruptive. Half of the savings should go on capital expenditure and the rest bridging the gap in the general government finances.

The idea that the fund might be out there buying toxic waste right now is a little worrying.

It's not to be opened till 2035 so I'm not that worried. It'll have sorted itself out by then and it'll fund the pension requirement.

Jesus Ard T! 2035 isn't actually that far away - and the idea that things will 'somehow sort themselves out' does not add up to sensible thinking. Tooling around with the pension fund is MADNESS
We have an aging population and the number of retirees will exceed the number of working adults by then. This notion of raiding pension funds is pretty much the equivalent of saying 'lots of old folk are gonna die in misery before their time but at least they won't have been an expense in their old age'. Economic euthanasia, in other words.

The fund isn't for ordinary pensioners on statutory pension but to fund public sector pensions. they can go swing for all i care. no-one else is on index linked (not to the CPI but to wage agreements and the grade level of the person currently doing your job) defined benefit pension.

as for the reduced PRSI for public sector employees....

zakalwe wrote:

Aragon wrote:

Ard-Taoiseach wrote:

cactus flower wrote:

Ard-Taoiseach wrote:

No, we should just take a payment holiday on the Fund until about 2010. It'll save us an easy €3 billion without being too disruptive. Half of the savings should go on capital expenditure and the rest bridging the gap in the general government finances.

The idea that the fund might be out there buying toxic waste right now is a little worrying.

It's not to be opened till 2035 so I'm not that worried. It'll have sorted itself out by then and it'll fund the pension requirement.

Jesus Ard T! 2035 isn't actually that far away - and the idea that things will 'somehow sort themselves out' does not add up to sensible thinking. Tooling around with the pension fund is MADNESS
We have an aging population and the number of retirees will exceed the number of working adults by then. This notion of raiding pension funds is pretty much the equivalent of saying 'lots of old folk are gonna die in misery before their time but at least they won't have been an expense in their old age'. Economic euthanasia, in other words.

The fund isn't for ordinary pensioners on statutory pension but to fund public sector pensions. they can go swing for all i care. no-one else is on index linked (not to the CPI but to wage agreements and the grade level of the person currently doing your job) defined benefit pension.

as for the reduced PRSI for public sector employees....

Are you sure that's the case?

cactus flower wrote:

zakalwe wrote:

Aragon wrote:

Ard-Taoiseach wrote:

cactus flower wrote:

Ard-Taoiseach wrote:

No, we should just take a payment holiday on the Fund until about 2010. It'll save us an easy €3 billion without being too disruptive. Half of the savings should go on capital expenditure and the rest bridging the gap in the general government finances.

The idea that the fund might be out there buying toxic waste right now is a little worrying.

It's not to be opened till 2035 so I'm not that worried. It'll have sorted itself out by then and it'll fund the pension requirement.

Jesus Ard T! 2035 isn't actually that far away - and the idea that things will 'somehow sort themselves out' does not add up to sensible thinking. Tooling around with the pension fund is MADNESS
We have an aging population and the number of retirees will exceed the number of working adults by then. This notion of raiding pension funds is pretty much the equivalent of saying 'lots of old folk are gonna die in misery before their time but at least they won't have been an expense in their old age'. Economic euthanasia, in other words.

The fund isn't for ordinary pensioners on statutory pension but to fund public sector pensions. they can go swing for all i care. no-one else is on index linked (not to the CPI but to wage agreements and the grade level of the person currently doing your job) defined benefit pension.

as for the reduced PRSI for public sector employees....

Are you sure that's the case?

Absolutely -

National Pension Reserve Fund lost €1 billion in year to May 2008; Fund of €140 billion in 2025 will only fund 25% to 30% of Irish public pension costs
By Finfacts Team
Jun 20, 2008 - 6:50:03 AM

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The National Pension Reserve Fund (NPRF), which was set up to provide for public sector pensions, lost 5.3 per cent of its value, about €1 billion, in the first five months of the year due to the global market turmoil. A fund of €140 billion in 2025 will only fund 25% to 30% of Irish public pension costs.

http://www.finfacts.ie/irishfinancenews/article_1013975.shtml

An interesting overview of the banking crisis - and why it is more serious in europe than in the US.

http://www.stratfor.com/analysis/20081012_financial_crisis_europe

I think when we talk about the banking crisis we need to stop talking about a "Bail Out" the huge amounts of OUR money being fired at the banks is anything but a bail out, which suggests that once the money is in the trouble will be over. That is not the case, nor will it be. What is is is using massive amounts of OUR money to attempt to prop up the banks. It's not working and it won't work.

If you're watching the week in politics you'll see cullen howlin and varadkar discussing this. Varadkar and Howlin are comparing the Eircom venture capitalist buyout to a similar situation potentially befalling the banks. Such venture capitalists would have no interest in the development of the country but perhaps that's how it should be for a banking product ?

Now that the banks are cheap perhaps it's a good time for the country to take that stake in them, Otherwise we could see the option of doing our small and medium business through Credit Unions as being relatively competitive and efficient if the broadband analogy holds through.

You can't ignore the fact that plenty of TDs already have plenty of shares in those banks.

Auditor #9 wrote:

If you're watching the week in politics you'll see cullen howlin and varadkar discussing this. Varadkar and Howlin are comparing the Eircom venture capitalist buyout to a similar situation potentially befalling the banks. Such venture capitalists would have no interest in the development of the country but perhaps that's how it should be for a banking product ?

Now that the banks are cheap perhaps it's a good time for the country to take that stake in them, Otherwise we could see the option of doing our small and medium business through Credit Unions as being relatively competitive and efficient if the broadband analogy holds through.

You can't ignore the fact that plenty of TDs already have plenty of shares in those banks.

I don't see any link between the Eircom situation and the Bank situation. Firstly because Eircom was a state company, the Banks are not, they are privately owned by shareholders and stakeholders.
You second point (perhaps it was Varadkar's or Howlin's) that a VC boyout would have no interest in the development of the country, currently the banks as they are have no interest in the development of the country. Unless it's your (or theirs - I was off making a cup of tea) belief that banks should (but currently don't) have an interest in developing the country. In which case it's a different argument.

I've not looked at any numbers bit I'm not sure the Credit Unions are set up to fulfill the functions necessary to do the business required by SMEs.