That's more solicitors on the dole queue .

johnfás wrote:

That's more solicitors on the dole queue .

I hope some are good-looking

I never saw the repossession delaying as a viable option. Surely it only makes the banks liquidity problem's worse?

Having said that, I want a pound of flesh for this 7Bn. So there better be something in this recap scheme to appease the public.

Why doesn't Government use some of the bail out money to top up peoples mortgage payments when they are made redundant?

That way, the mortgage gets paid, the family stays in the house and the bank gets the money.

cactus flower wrote:

Why doesn't Government use some of the bail out money to top up peoples mortgage payments when they are made redundant?

That way, the mortgage gets paid, the family stays in the house and the bank gets the money.

Seems like an alright idea to me.
I don't want to reward people who took out mortgages they could barely afford, but I do feel that some level of debt forgiveness may be necessary.

I don't think this scheme will be as wide as to allow people to make no contributions to their mortgage for a 12 month period. It will merely mean the banks will be more flexible in arranging schemes with mortgagors to have them pay greatly reduced repayments. It is a bit of a PR exercise as in the current climate that is the best outcome for the bank as well. The last thing the bank wants to do is repossess houses and carry the responsibility for all that entails in the current climate. There are two houses on my road for sale with a guide price of some 20% lower than the last price achieve on the road. Despite that neither is having any viewings. Why would the banks want to take on such properties.

eoinmn wrote:

Kate P wrote:

I think we need to be careful about tarring all public service workers with the same brush. There are many of them who would say, incidentally RB, that a little thank you occasionally for them from the people on whose behalf they do work, would be greatly appreciated.

My wife is a public servant who has no issue with the pension levy. Looking around at her friends and family, she knows she is lucky to have a job.

Kate P wrote:

The animosity of the private sector towards the public sector never ceases to amaze me. Each and every working person made employment choices - the public sector is not a closed shop, there are very transparent entry requirements and many of those who work in the private sector who had the opportunity to join the public sector made deliberate decisions to avoid it because it can be a stagnant working environment, promotion opportunities are poor, there's virtually no overtime, ministerial whims can undo months of work - and may need to be acted on immediately, there is a pension - but you have to work in a job that can be less than satisfying for rather a long time before you can qualify for it, it can be permanent - but that's not going to suit someone who wants the freedom to develop different skills and work for different companies or go where the money is, and there is no prospect of any reward for working harder and of course, there's the derision and criticism of the general population.

I'm not excusing the public service for having permanent, pensionable jobs, but surely a system that has been in operation for many decades is not a surprise to people who choose to vent their spleen at it now, because it seems like a cushier number when other opportunities seemed more profitable and exciting in the past?

That's unfair.
Firstly we can't all work in the public sector, and we can't all work in the private sector.
I reject the idea that I took a job in the private sector because it was more exciting or better paid. I took it because it was the only job I could get!
And that is often the way. There isn't many jobs for carpenters in the civil service, for example.

I want to echo Eoinm's comments. I know public servants who are not cribbing about the cuts. I am very appreciative of the public service and the improvements they have made over the years.

I also think the idea that people avoided the public service because they were mercenary is a myth. I agree with Kete that the stagnating environment turns some peope off the public sector. However, that stagnation comes from the unionised nature of the public sector workforce themselves so it is wrong to cite it as something they are valiantly putting up with!

It must be said too, that the stagnation (great word!) is more apparent in the older employees, and it drives the younger dynamic employees I know nuts. Especially since the younger ones get paid less.

eoinmn wrote:

cactus flower wrote:

Why doesn't Government use some of the bail out money to top up peoples mortgage payments when they are made redundant?

That way, the mortgage gets paid, the family stays in the house and the bank gets the money.

Seems like an alright idea to me.
I don't want to reward people who took out mortgages they could barely afford, but I do feel that some level of debt forgiveness may be necessary.

Yay!! I can't now to get another job so I can start contributing to the tax system again and hopefully also to those poor basterds who took out 400 and 500k loans for massive macmansions and even small pokeens of places. Yeah they were dead right to laugh their holes off at me while I was renting and they were even more right to have shunned, pilloried and even insulted me when I complained about the whole mortgaqe situation with the 100% mortgages and all - they were dead right in the end - renting was dead, dead money.

I really really just can't wait.

johnfás wrote:

I don't think this scheme will be as wide as to allow people to make no contributions to their mortgage for a 12 month period. It will merely mean the banks will be more flexible in arranging schemes with mortgagors to have them pay greatly reduced repayments. It is a bit of a PR exercise as in the current climate that is the best outcome for the bank as well. The last thing the bank wants to do is repossess houses and carry the responsibility for all that entails in the current climate. There are two houses on my road for sale with a guide price of some 20% lower than the last price achieve on the road. Despite that neither is having any viewings. Why would the banks want to take on such properties.

That makes me feel a bit better.

It is a pure PR exercise in my book too. The banks were never going to foreclose on everybody that quickly. It makes more sense to keep them on the hook if there is a prospect of gettign the money back.

However, the effect of the PR may be to relieve some of the mental torture recent victims of the credit crunch are suffering. For that reason, I do not dismiss the announcement as piffle.

BTW, the changing threads names are getting a bit confusing. Should this not be in a bank thread? Renaming the economy and budget thread to deal with the banks specifically might mix things up.

Thread names .. yeah... I can't ever think of new names and openings to be honest so I just stick something on the end and I stick the bit of news where I think it should roughly go. This is a kind of economics theme. The thread name is kept as a tag at the first post of the thread so it should be able to appear on searches, even if it doesn't on the title.

It's not really changing the name Zhou just adding a bit - the root name of the thread always stays the same. I like this system but feel free to argue -your name on the accounts isn't that close to the ban button or anything so there's little chance of my finger slipping.

It was a stroke of strategic genius to choose a name beginning with Z.

I think changing the names is a good idea to stop proliferation.

With that said, we have seen the damage that can be done by mixing up the banks with the budget. I suggest we avoid repeating the error less they become hard to disentangle at a later date .

Zhou_Enlai wrote:

It was a stroke of strategic genius to choose a name beginning with Z.

I think changing the names is a good idea to stop proliferation.

With that said, we have seen the damage that can be done by mixing up the banks with the budget. I suggest we avoid repeating the error less they become hard to disentangle at a later date .

I'm glad you brought it up as I think it's important. I don't like thread proliferation yet there is room for at least a couple of angles on something. When I get it into my head to categorise stuff, it could end up going all wrong but I kinda think it's necessary to do that - it's basic discipline. I don't think it's perfected though yet so feel free to offer suggestions. It's something you see on the Pin as well and the ISEQ thread on P.ie is the precursor of it all.

Do you think this one should be renamed, taking the Budget out of it?

Auditor #9 wrote:

...
Yay!! I can't now to get another job so I can start contributing to the tax system again and hopefully also to those poor basterds who took out 400 and 500k loans for massive macmansions and even small pokeens of places. Yeah they were dead right to laugh their holes off at me while I was renting and they were even more right to have shunned, pilloried and even insulted me when I complained about the whole mortgaqe situation with the 100% mortgages and all - they were dead right in the end - renting was dead, dead money.
...

That is the problem a mortgage forgiveness scheme alright - it effectively punishes prudence. Maybe a fairer scheme is to take the 7bn and divide it equally amongst all taxpayers? Those with debts could use it to pay down some of their mortgages (capital back into the banks, yes/no?) and those without could use it to get into debt (getting a mortgage) or even to invest in bank stocks. LOL. Maybe the best indicator of how inadequate 7bn is to fix this problem is the fact that 7bn divided by 2mn taxpayers amounts to only 3,500 per head, about 2 or 3 months worth of repayment of the average mortgage.

Auditor #9 wrote:

Zhou_Enlai wrote:

It was a stroke of strategic genius to choose a name beginning with Z.

I think changing the names is a good idea to stop proliferation.

With that said, we have seen the damage that can be done by mixing up the banks with the budget. I suggest we avoid repeating the error less they become hard to disentangle at a later date .

I'm glad you brought it up as I think it's important. I don't like thread proliferation yet there is room for at least a couple of angles on something. When I get it into my head to categorise stuff, it could end up going all wrong but I kinda think it's necessary to do that - it's basic discipline. I don't think it's perfected though yet so feel free to offer suggestions. It's something you see on the Pin as well and the ISEQ thread on P.ie is the precursor of it all.

Do you think this one should be renamed, taking the Budget out of it?

I think that the recent bank related posts should possibly be moved to the AIB / BOI Cash Injection thread or to the Nationalisation thread or to a new thread on debt relief.

The budget / economy watch element has been part of this thread from the start. If you remove that from the title now we will never be able to find that stuff again!

Ciaran O'hagan on the radio morning pointed out that the US and Britain were going for an inflationary response to the crisis, whereas the rest of the EU was going for deflation. The IMF is also continuing with deflationary policies - tight money supply, high interest rates.

The US and Britain are going for pumping money into the banks, printing money and currency devaluation.

Ireland is usually out of sync with the rest of the EU in terms of economic cycles. We are in the middle of a massive home grown property market implosion, in itself deflationary. Our legacy of overspending and under taxing has become unaffordable and dealing with that is deflationary.

In the climate we're in now the EU interest rates of 2% are considered high.

Inflation is a nightmare too, but how much deflation can we take?

cactus flower wrote:

Ciaran O'hagan on the radio morning pointed out that the US and Britain were going for an inflationary response to the crisis, whereas the rest of the EU was going for deflation. The IMF is also continuing with deflationary policies - tight money supply, high interest rates.

The US and Britain are going for pumping money into the banks, printing money and currency devaluation.

Ireland is usually out of sync with the rest of the EU in terms of economic cycles. We are in the middle of a massive home grown property market implosion, in itself deflationary. Our legacy of overspending and under taxing has become unaffordable and dealing with that is deflationary.

In the climate we're in now the EU interest rates of 2% are considered high.

Inflation is a nightmare too, but how much deflation can we take?

Interesting dynamics both internally and internationally if blocs elect to go those different roads. Maybe emigration would result - from the deflating to the inflating economy?

In the deflating economy the issue is loss of jobs and economic activity is it not? Could this lead to a downward spiral where basic production is threatened ?

It appears that deflation is the only way we can become competitive again.

I like most others have suffered a cut in income. Deflation makes this less painful (although it isn't helping me with my mortgage, my increased income tax, my increased car tax (on a car I could not sell), my increased insurance).

My perception is that there has been huge inflation of wages and the cost of living over the last few years. My instinct is that we were paying too much while everybody thought they should be rich and took their cut. My instinct is that prices should come down so deflation seems correct to me. If we were in a credit bubble then surely when it bursts, it bursts?

I would further prefer for Ireland to fall into line with the rest of the Eurozone rather than the USA/UK. The USA/UK seem to be risking massive inflation without knowing exactly where the danger line is.

The UK and US governments want inflation. Two ways out, deflate and hold wages down, cut spending, balance budgets, pay off loans and allow assets etc to fall in value. That way the currency tends to remain strong.

I think the UK and US would prefer inflation as a tool to devalue the currency and by that means devalue the value of assets. By that slight of hand the £250,000 house is still £250,000 but sterling no longer buys as much, but hopefully no one notices.

Zhou_Enlai wrote:

It appears that deflation is the only way we can become competitive again.

I like most others have suffered a cut in income. Deflation makes this less painful (although it isn't helping me with my mortgage, my increased income tax, my increased car tax (on a car I could not sell), my increased insurance).

My perception is that there has been huge inflation of wages and the cost of living over the last few years. My instinct is that we were paying too much while everybody thought they should be rich and took their cut. My instinct is that prices should come down so deflation seems correct to me. If we were in a credit bubble then surely when it bursts, it bursts?

I would further prefer for Ireland to fall into line with the rest of the Eurozone rather than the USA/UK. The USA/UK seem to be risking massive inflation without knowing exactly where the danger line is.

I think that's it exactly there was a Boom that was undoubtedly allowed to become a Bubble or even stoked orgiastically into one as elsewhere and now that's coming down to land again. And I'd wonder how much of our employment was healthily based on the boom and how much based on the bubble.... ? This will be important as we are starting to see public positons being shed now which may have got attached to the economy on the back of the bubble rather than the boom.... Remember Christian Pauls, German Ambassador ?

Personally I feel the Bubble interfered with a Boom that could have been leveraged for something healthy and longstanding. I wonder what assets we actually have coming out of the Bubble/Boom - a more or less finished motorway network, a low but climbing national debt, 300,000 empty houses (but quality built) 1GW of wind energy, a Tesco in every small town... what else ?

Noises on Bloomberg today (very negative ones overall but especially about Japan's GDP and Asian stocks) about ECB ratecut - something to balance out that pension levy you might have got hit with Zhou.

The property website daft.ie has reported that rents fell by almost 12% in the past year.

The average rent nationally now stands at €885, down from €1,000 in the same period last year.

The report says 10,000 new properties come to the market every month, meaning that the total number of properties available to rent in the country at any one time is 20,000.
http://www.rte.ie/news/2009/0217/rent.html

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Dublin most affected as rents fall 1% ........... Cork and Limerick rents down 10%




Daft predicting avg. rents to fall 20% next year.

Must be a typo . 15% probably.

European Commission warns Ireland regarding debt levels

Ireland’s financial deficit is way beyond acceptable EU limits and the Government’s forecasts for improvement are “somewhat optimistic”, the European Commission warned today.

A Commission report launching formal “Excessive Deficit Procedure” against Ireland under EU debt and deficit rules said a sharp deterioration in Ireland’s public finances is continuing and could see an estimated deficit of 6.3% of GDP in 2008 widen to 9.5% this year – more than three times the maximum 3% deficit permissible under the EU’s Stability and Growth Pact.

The limits set under the Pact are designed to avoid wide disparities between national economies in the eurozone, and the Commission is making allowances for “exceptional” and “temporary” economic circumstances across Europe.

However, in Ireland’s case, today’s report says the “exceptional” Irish deficit above the maximum 3%, is not even close to the 3%, and cannot be considered temporary.

The report says the Irish Stability Programme envisages a progressive reduction of the deficit to below 3% in 2010, “assuming a recovery of economic activity after 2010”.

It goes on: “The measures adopted by the government can be regarded as welcome and adequate given the high deficit and a sharply-increasing debt position and are in line with the European Recovery Plan.

“But the growth scenario is somewhat optimistic and the consolidation measures presently lack detail. Further risks stem from the measures in place to support the financial sector, in particular bank guarantees and, concerning the debt ratio, the possibility of further capital injections or nationalisations of banks”.

http://www.breakingnews.ie/ireland/mhsnsneyqlkf/



This morning on Bloomberg some analyst was saying that the irresponsible Eastern European lambs would be thrown to the IMF whereas the wayward PIGS of the Eurozone would be protected by the central powers as their debt was relatively small.

Because we are / will be running a deficit of 10-13%, I heard on Morning Ireland, that a report will be sent to Ecofin and Brian Cowen's balls put in a vice by his peers from here on out as to how he is getting on with his deficits. Eventually there will be tiny percentage penalties of GDP but no fines have been imposed yet on Eurozone members.

So much for the detractors of the EU who say there is too much interference - in the financial case I'm surprised there wasn't a lot more all along - the Euro being a kind of franchise ... Maybe these countries need to start looking at how McDonalds operates its oversight policies ....

As I understand it warnings are also being given to Spain, Malta, Greece, Latvia and France. France being the significant one there.

johnfás wrote:

As I understand it warnings are also being given to Spain, Malta, Greece, Latvia and France. France being the significant one there.

France ??? eek

Isn't it amazing that there was no firm hand of the ECB all along though in this - I could be missing it but I'm sure they were issuing financial warnings as much as any other kind of environmental warnings about directives which they were issuing. Like the monetary bands inside which currencies used to fluctuate, surely to God there must still be virtual bands relating to price and even growth inside which activities are or aren't allowed to fluctuate outside of without incurring fines.

Growth is great but if an economy like Poland started to grow at over a certain pace then it could become like a Black Hole sucking personnel and capital in from nearby countries. It might look great on paper but could be a timebomb waiting to blow.

There needs to be some leaning towards growth of a sustainable nature - otherwise the growth could be a cancerous lump that you've mistaked for a muscle....