Bollitics - Ireland, the Euro and the future of the EU

[peterms]

Is

a metaphor for what's happening to Ireland?

[Gringo]

It is not an astonishing number of people, you are talking utter rubbish, you don;t know shit about my country yet try to pretend you have some wonderful insight. You put your own spin on the bits you read in your media.

If only someone could invent something that allowed people outside of the country the ability to access the media inside the country.

There is a huge huge difference between the amount of reading and exposure to the situation abroad as there is to people living here, is there not? Yes you can access it, but you have your own news to absorb too. I'm sure you are not devoting all your time to the irish economic mess. Nor do you know the feeling in the country from the mainly silent majority.

I suppose you do get outta touch a bit, not been back for a few months. But speaking to colleagues who work in the country and people like my brother (in the city) or even me ma and dad (out in the sticks) on a regular basis tends to give an insight to how people feel.

[peterms]

It is not an astonishing number of people, you are talking utter rubbish, you don;t know shit about my country yet try to pretend you have some wonderful insight. You put your own spin on the bits you read in your media.

If only someone could invent something that allowed people outside of the country the ability to access the media inside the country.

There is a huge huge difference between the amount of reading and exposure to the situation abroad as there is to people living here, is there not? Yes you can access it, but you have your own news to absorb too. I'm sure you are not devoting all your time to the irish economic mess. Nor do you know the feeling in the country from the mainly silent majority.

I suppose you do get outta touch a bit, not been back for a few months. But speaking to colleagues who work in the country and people like my brother (in the city) or even me ma and dad (out in the sticks) on a regular basis tends to give an insight to how people feel.

You don't know what the silent majority feel, though. That's because they're, er, silent.

[peterms]

Oops! The real story tucked away in the last para. How often does that happen?

So despite all the talk, there is still no agreement that anyone other than the general public should pick up the tab for casino losses made by **** bankers.

Chancellor Angela Merkel of Germany, President Nicolas Sarkozy of France, and the ECB chief, Jean-Claude Trichet, conferred over the weekend on the plan for a permanent euro rescue system. According to German officials today, Berlin has scaled back its demands after running into resistance from the French and the ECB. The paper tabled today, to be discussed at an EU summit next month, rowed back from a blanket insistence on creditor haircuts, instead saying the investor losses should be treated on a case by case basis.

[CVByrne]

You're sort of right there peterms, ok first things first I'm pretty damn sure my friend is correct when he said that the figures they put on the loans (he works in nama transfers) were changed in the last interm report for AIB. Basically there has been constant lying being done by the bank right up until mid this year. Hopefully now the bank is state owned and has a new board they can get to the real bottom of what has gone on and what is needed ( I think they have now they've been in for over 2 months now ).

The belief is that the banks can have all the bad loans stripped out properly now they are state owned and sent to Nama, the fresh capital is injected and the banks are down sized by selling loan books and foreign assets. Also subordinated bond holders will have to take a loss, the government guarantee will not cover them, this will save billions. Then the cleaned up banks are sold back into the market. This will get billions back which can go to repaying some of the loans.

Next is the rolling back of everything to 2005 levels. That means tax, public sector pay levels, pensions levels, social welfare, minimum wage. This will reduce expenditure and increase tax income. We will need a european recovery though as we are an open exporting economy and we can only grow if other countries are buying exports.

It's not a forlorn hope. The fact the government has negotiated 7.5 years for repayment means we have the time to deal with setbacks. Greece got 3 year loan, that puts too much pressure on them. The longer we have the loan for lets us repay early if we recover early and stop a second crisis if it takes longer than we thought to recover.

A benefit we have is as a people we will take it on the chin more than pretty much any other country in Europe. As I have said we have an acceptance of our fate. We will have a new Government voted in with the hard decisions taken out of their hands, as they are privately happy with.

I do feel sad for people who are stuck here, who have mortgages in negative equity. Who must stay and suffer through what is to come. But it is still going to be better than where we came from in the 80's and early 90's.

[CVByrne]

I suppose I feel lucky I was one of the few who never bought into the property bubble, I called it as a bubble from day one and at least convinced one close friend from buying a house. I've just been reticent for being tied down, I have always hated owing people anything or being reliant on anyone. I own very few possessions, just a Netbook, mobile phone and some clothes. I've never had a loan from a bank and I have had savings since I started work. I could never ever not pay off all of a credit card bill the day it came in. I'd never ever spend money I didn't have. Basically I'm in the tiny minority in the country who did that.

[snowychap]

Quite amazing.

[peterms]

You're sort of right there peterms, ok first things first I'm pretty damn sure my friend is correct when he said that the figures they put on the loans (he works in nama transfers) were changed in the last interm report for AIB. Basically there has been constant lying being done by the bank right up until mid this year. Hopefully now the bank is state owned and has a new board they can get to the real bottom of what has gone on and what is needed ( I think they have now they've been in for over 2 months now ).

The belief is that the banks can have all the bad loans stripped out properly now they are state owned and sent to Nama, the fresh capital is injected and the banks are down sized by selling loan books and foreign assets. Also subordinated bond holders will have to take a loss, the government guarantee will not cover them, this will save billions. Then the cleaned up banks are sold back into the market. This will get billions back which can go to repaying some of the loans.

Next is the rolling back of everything to 2005 levels. That means tax, public sector pay levels, pensions levels, social welfare, minimum wage. This will reduce expenditure and increase tax income. We will need a european recovery though as we are an open exporting economy and we can only grow if other countries are buying exports.

It's not a forlorn hope. The fact the government has negotiated 7.5 years for repayment means we have the time to deal with setbacks. Greece got 3 year loan, that puts too much pressure on them. The longer we have the loan for lets us repay early if we recover early and stop a second crisis if it takes longer than we thought to recover.

A benefit we have is as a people we will take it on the chin more than pretty much any other country in Europe. As I have said we have an acceptance of our fate. We will have a new Government voted in with the hard decisions taken out of their hands, as they are privately happy with.

I do feel sad for people who are stuck here, who have mortgages in negative equity. Who must stay and suffer through what is to come. But it is still going to be better than where we came from in the 80's and early 90's.

OK, that's a really interesting, and honest, set of comments.

I wonder if nama will be rigorously stripping out bad loans. Your point about subordinated bond holders taking a loss sounds entirely accurate, however.

Rolling everything back to 2005 levels may reduce expenditure, but will also reduce tax income (why do you say it will increase it?)

You clearly have a real insight into how one financial institution is approaching this, and that's really interesting. But I don't think they can buck the wider economy.

[CVByrne]

Snowy if you're referring to my above post I assume you had me down as someone who loved to earn and spend money? I've had the same PC I built back in 2001 until it died last year. We have a a big crt tv that we bought back in 2005 when me an a college mate first rented a house after getting jobs. I don't own a car as I've had no need for one so far. I plain don't spend money accumulating things.

Suppose it has worked out for the best. Where people are troubled with debt I have a rather large savings, I'd say 30% of all my take home pay since I left college in 2005 has gone into a savings account.

[CVByrne]

OK, that's a really interesting, and honest, set of comments.

I wonder if nama will be rigorously stripping out bad loans. Your point about subordinated bond holders taking a loss sounds entirely accurate, however.

Rolling everything back to 2005 levels may reduce expenditure, but will also reduce tax income (why do you say it will increase it?)

You clearly have a real insight into how one financial institution is approaching this, and that's really interesting. But I don't think they can buck the wider economy.

Well firstly my bank. My friend works in the ROI division, so it's his area where the property loans etc were lent. He was moved to work on the transfer of property development loans to Nama. He's still been saying since he got there that the loans are far worse than the bank has been reporting.

Basically the attempt to keep the bank from being nationalised was doomed to failure yet people in high placed tried their best to save it for their own reasons. Anyway it failed and now he said the new board is doing a purge as in almost anyone in a high position is is being got rid of.

My division was being run as a separate entity it is relatively new, only 10 or so years old and grew from college recruits not from recruits from the rest of the bank, hence the differing culture I mentioned. Anyway it has been untouched as it has remained profitable, we've had loads of extra auditors and regulators around but they haven't had any cause for complaint or concern.

But we have been told the bank must be downsized, the sole concern now is to sell assets and get the bank is as good a shape as possible as soon as possible. The government will strip everything bad out and into nama. then the bank will have the base to return to profitibility, then as an almost brand new cleaned up bank it is sold back into the market. There will be a demand for it as it is clean and is a clearing bank so almost cannot fail to make money off regular old school banking.

Next, by rolling back to 2005 levels tax bands increase, as the government has spent the past 15 years cutting taxes and incresing spending year on year. So by rolling back we simulatniously reduce expenditure and increase tax. But by picking a level in the past people will readily accept it more, we went too far, we need to go back. It will be easier to sell to the people.

But the recovery will be reliant on Europe. We are an exporting country. We need a world recovery to revive our economey.

[peterms]

OK, that's a really interesting, and honest, set of comments.

I wonder if nama will be rigorously stripping out bad loans. Your point about subordinated bond holders taking a loss sounds entirely accurate, however.

Rolling everything back to 2005 levels may reduce expenditure, but will also reduce tax income (why do you say it will increase it?)

You clearly have a real insight into how one financial institution is approaching this, and that's really interesting. But I don't think they can buck the wider economy.

Well firstly my bank. My friend works in the ROI division, so it's his area where the property loans etc were lent. He was moved to work on the transfer of property development loans to Nama. He's still been saying since he got there that the loans are far worse than the bank has been reporting.

Basically the attempt to keep the bank from being nationalised was doomed to failure yet people in high placed tried their best to save it for their own reasons. Anyway it failed and now he said the new board is doing a purge as in almost anyone in a high position is is being got rid of.

My division was being run as a separate entity it is relatively new, only 10 or so years old and grew from college recruits not from recruits from the rest of the bank, hence the differing culture I mentioned. Anyway it has been untouched as it has remained profitable, we've had loads of extra auditors and regulators around but they haven't had any cause for complaint or concern.

But we have been told the bank must be downsized, the sole concern now is to sell assets and get the bank is as good a shape as possible as soon as possible. The government will strip everything bad out and into nama. then the bank will have the base to return to profitibility, then as an almost brand new cleaned up bank it is sold back into the market. There will be a demand for it as it is clean and is a clearing bank so almost cannot fail to make money off regular old school banking.

Next, by rolling back to 2005 levels tax bands increase, as the government has spent the past 15 years cutting taxes and incresing spending year on year. So by rolling back we simulatniously reduce expenditure and increase tax. But by picking a level in the past people will readily accept it more, we went too far, we need to go back. It will be easier to sell to the people.

But the recovery will be reliant on Europe. We are an exporting country. We need a world recovery to revive our economey.

Thanks, that explanation makes perfect sense and fits what I'm hearing from elsewhere, especially about trying to clean out banks and reduce them to a clearing function.

Still don't see how tax revenue will grow in a shrinking economy, but maybe the locals are better placed to see this.

As for exporting, I wonder who you will export to, when all the previous export markets are retrenching. The problem with the UK (well, one problem) is that our projections are about growth while reality is about cutting back. Who will Ireland export more to, if its traditional markets are shrinking?

[snowychap]

Snowy if you're referring to my above post I assume you had me down as someone who loved to earn and spend money? I've had the same PC I built back in 2001 until it died last year. We have a a big crt tv that we bought back in 2005 when me an a college mate first rented a house after getting jobs. I don't own a car as I've had no need for one so far. I plain don't spend money accumulating things.

Suppose it has worked out for the best. Where people are troubled with debt I have a rather large savings, I'd say 30% of all my take home pay since I left college in 2005 has gone into a savings account.

I didn't have you 'down' in any way. Unfortunately that's another incorrect assumption.

The only information I have about you is that which you have posted about yourself (like when you got very angry about not getting your bonus and when you spoke about the money you are/were going to make whenever Kauto wins/won, for example).

As this isn't the Conor Byrne thread, I think it would take it pretty off topic to continue along the tangent you began, though do PM me if you would like to explain to me the reason that you are saving money.

[CVByrne]

Well raising taxes will increase tax take, tax revenue will only really grow when the economy recovers, which is dependent on outside sources and we are an open economy. To be fair our exports have grown month on month for almost a year now so I assume Germany must be buying. I don't have any knowledge in that area other than the reported over all figures. But we are totally dependent on other economies recovering. That is the model, which was/is still a sound enough model.

Of course only time will tell.

[CVByrne]

I didn't mean down, in a bad way. I just meant based on my posts on here I'm not surprised that that post surprised you. I'll pm you tomorrow as it's a bit late now

As for bonuses it's my belief that people have them stigmatised now and don't look at hem objectivly. Firstly we never got London level bonuses, I'm talking like 10-20% of annual salary. They are in my opinion, commission, like a car sales man. When money earned is bankable as in not based off a model valuation, but bankable profit that is there and real then rewarding staff for good work is not wrong. I fail to see how bonuses of 10-20% could be a bad thing. Though I totally and utterly understand how the huge bonuses can be severely damaging to a bank and think they are fundamentally wrong, the right level of incentivisation is required.

And Kauto Star, I dearly love that horse. He means the world to me.

[snowychap]

I just meant based on my posts on here I'm not surprised that that post surprised you.

It didn't.

[Meath_Villan]

Hummm the Imf loan is at 3.1% and the eu loan is 5.8%

[CVByrne]

Snowy, so why say you were quite amazed. Man you're cryptic.

Meath EU member states have to raise the funds themselves and and a small margin, so the rate we are getting is how much it cost them to raise the funds for 7.5 years. People forget Greece only got money for the years. You pay higher rates the longer you get money for.

[mjmooney]

While we're talking about matters financial, I'll put in a plug for my wife's blog about all things credit card related. She's only just started it, and would really appreciate some followers (hint, hint).

My World of Plastic

I have just been having a look at my blog; there have been over 330 hits!

Good old Villa Talk.

[Risso]

I suppose I feel lucky I was one of the few who never bought into the property bubble, I called it as a bubble from day one and at least convinced one close friend from buying a house. I've just been reticent for being tied down, I have always hated owing people anything or being reliant on anyone. I own very few possessions, just a Netbook, mobile phone and some clothes. I've never had a loan from a bank and I have had savings since I started work. I could never ever not pay off all of a credit card bill the day it came in. I'd never ever spend money I didn't have. Basically I'm in the tiny minority in the country who did that.

Good for you, and I try to take a similar view, although to a slightly less extreme level. I don't have any loans other than my mortgage, and no credit cards either. Having a wife and two kids means that we spend more than I'd like on consumer stuff, but we only got a new flat screen telly when our old CRT box died after about 10 years.

[CVByrne]

Well money spent on wife and kids is money well spent. Your childrens happiness is worth every penny.

For me, I just have never seen the need to spend money on useless things that you don't need. My old pc worked for what I needed, the internet, a new one would have been pointless. Similarly does having an expensive super sharp tv really matter that much? Yeah I might get a good one when the old one dies but people would get loans to buy things like a tv. Madness.

I save money because some day it will be needed, most likely for buying a home when starting a family. But it's not like I'm a scrooge, I spend money going out, going on holidays, buying good quality food etc. I'm just careful when spending large sums.

Anyway, this has me in a very fortunate position in current times. I can up and leave within a month if a chose to.