31–40 of 80 posts
Pardon if I deviate a bit from the main topic. I live in Ireland, and it was quite disheartening when the last budget cuts appeared. Taxes were increased across the board. If you were earning 25,000 Euros a year, you would pay an extra 1000 Euros in tax (and surprisingly enough, this low earner class was the worst beaten income group by hike in tax in percentage terms - 4+% more tax!). Since its general consensus tha…
There's a 4 minute section in this video (43m45s onwards ) http://www.rte.ie/player/#v=1090239 which explains better than I can, but here goes:
In short: 1. There are multiple seats (often with a few candidates running from the same party) per constituency. 2. It doesn't take many votes to get elected (Any more than 8,000 votes got you elected in my constituency of 86,000 people).
Politicians don't compete on the differences between their parties because they're also competing against another locally running party member. Instead, they wage very local personality based campaigns. Since they only need a few thousand votes, they can and do call door-to-door to chat with everyone they can. Pothole need filling? Let your local candidates know and by god it'll be fixed immediately.
This means that the people who end up making important decisions on whether or not to take on 100s of billions of euros worth of debt are the people who came across best on a few thousand house calls.
Anger is certainly an appropriate reaction in circumstances like this, but I find articles like this really gloss over the nature of the shared responsibility for what happened. Yes, banks and governments (including the US! - we just haven't felt the full brunt of it yet) engaged in many unsustainable and downright fraudulent practices. Asset bubbles are breeding grounds for such things. On the other hand, no one for…
On the other hand... for the equivalent square feet in Tucson, my rent went up 50% over a decade for the same square footage. When you see your rent go up so drastically, while everyone is getting low interest rate mortgages, you start to question your "fiscal responsibility." If I had bought in 2006, I couldn't have sold my property today. However, we didn't know where the "new normal" would even out. People took on…
This is one of the most retarded ideas I've ever heard.
Renting: a small, liquid, short duration, unleveraged short position.
Owning: a large, illiquid, long duration, highly leveraged long position.
So basically, to follow a short term trend, people decided to tie up a large chunk of their life savings in dangerous, long term leveraged bets. Financial literacy FAIL.
Earlier quoted context omitted.
Whenever I hear about people wanting to break away like that I'm always reminded "There's strength in numbers". As the world economy starts to flatten out, we're all learning that it comes down to a population game. I wonder if we'll see a point where two countries vote to merge together to create a stronger economy.
See: the European Union. Shared currency, very little restriction to travel and trade, made it possible to compete economically with the UK.
To that degree I meant a real merging of two countries, currencies, legislation, politics, everything.
Earlier quoted context omitted.
You're advocating unrest? The government has disbanded and elections have been called. They're in for a kicking, which although short of full-on political reform, is something several hundred people had to die for in Egypt. Would it satisfy you if we burned a few cars? Where do you live? I'll meet up with you later and we can tear your street to shreds if you like.
Not much of a comparison between Ireland and Egypt obviously. That's why the comparison to France is more appropriate: where the people were actually unwilling to take it lying down - as they are doing in Ireland. It doesn't matter that a general election has been called. With the poverty of leadership in Irish politics at the moment, Ireland is in for more of the same incompetence that led to the current disaster fr…
The bank bailouts made very little sense, the biggest toxic bank, Anglo Irish Bank, was not a retail bank. They specialised in property financing. Letting them go under would not have resulted in the Irish Government having to cover huge amounts of deposits. The current majority party (Fianna Fail) has a history of connections to property developers and this connection is what a lot of people though spurred the savin…
Banking seems a lot like a gambling except that it's heads you win and tails they lose. Lend big into a property bubble and you'll be rewarded with colossal bonuses. The bubble bursts, loans go bad and the share price collapses. However the main banks banks are considered too big to fail and the taxpayer has to bail them out. Bonuses (smaller ones) for exceptional performance continue to be the norm, rolling heads th…
"Too big to fail" is a classic perverse incentive, and a mockery of the idea that the financial industry can somehow self-regulate. Unfortunately, if you remove deposit insurance (or any of its variants), people's savings once again become subject to the self-fulfilling whims of insolvency or the unfounded rumour of insolvency .
I've heard that Canada didn't get deposit insurance until the 50s or 60s, well after the US.
Earlier quoted context omitted.
On the other hand... for the equivalent square feet in Tucson, my rent went up 50% over a decade for the same square footage. When you see your rent go up so drastically, while everyone is getting low interest rate mortgages, you start to question your "fiscal responsibility." If I had bought in 2006, I couldn't have sold my property today. However, we didn't know where the "new normal" would even out. People took on…
People took on these home loans, in most cases, because of the fear of rent increasing past their ability to pay. This is one of the most retarded ideas I've ever heard. Renting: a small, liquid, short duration, unleveraged short position. Owning: a large, illiquid, long duration, highly leveraged long position. So basically, to follow a short term trend, people decided to tie up a large chunk of their life savings i…
Banks have more responsibility for the mess because they are the experts (allegedly) at assessing risk. They are the ones that got ratings agencies to give high scores to the mortgage backed securities. They are the ones in a position to wreck the economy by collective failure. They are the ones who got a bailout and clamored for one.
An individual homeowner who makes a bad bet doesn't ruin the economy. Too big to fail banks who make millions of bad bets do ruin the economy. They socialized their losses and continue their extremely high pay and bonuses.
The anger should mostly be aimed at the banks. Especially in light of their dubious foreclosure practices. People are mostly financially illiterate. People don't understand percentages and compound interest. People are not rational (most of the time). A regulatory apparatus that isn't beholden to the banks is what is needed.