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When Irish Eyes Are Crying

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Re: When Irish Eyes Are Crying

#51

Post by fdghjkh »

greenmachine wrote: post #5

As someone currently living in Ireland, I found the subtitle of this article particularly appropriate: "Where's the rage?". The Irish government bankrupted the country many times over by putting the debts of the banks on the backs of the people. But, unlike France, for example, where people have taken to the streets and brought the country to a halt to be heard, in Ireland there is nothing like the level of activism…

Best reply I heard was an interview with a new graduate.

"We will just do what we have always done when the government fucks-up - we emigrate!"

Re: When Irish Eyes Are Crying

#52

Post by riffraff »

Padraig wrote: post #32

One fundamental problem we have in Ireland is the way in which we elect our Dáil (parliament). 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 v…

this seem similar to the system we had in italy up to some years ago. It was changed so that the party decides who is running, and people cannot vote on the person.

The result is, of course, that people who would be ineligible because of obvious incapacity (or any other reason) still get elected when people vote for the color instead of the person, and the parliament is full of lackeys who don't dare to disagree with the leaders for fear of not being put on the safe list the next time around.

Be careful when you wish for a better system, you may end up with a worse one :)

Re: When Irish Eyes Are Crying

#53

Post by yummyfajitas »

yequalsx wrote: post #39
yummyfajitas wrote: post #33

Earlier quoted context omitted.

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…

I guess it's fine to put a lot of blame on people who bought houses they ended up not being able to afford. However, there were fraudulant practices by mortgage companies. 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…

They are the ones that got ratings agencies to give high scores to the mortgage backed securities.

And that's an issue between them and the people/institutions they sold those securities to. It does not in any way absolve individuals for making dumb bets, particularly when those individuals often lied on their loan applications.

The housing bubble simply could not have occurred without financially illiterate people making bets they didn't understand in the hopes of getting rich quick. I agree with you that any individual bank had a more harmful effect than any individual real estate speculator, but that's just a matter of size. Collectively, real estate speculators are just as guilty as banks.

I don't disagree with you at all concerning bailouts. We should end "too big to fail".

But on the other hand, try to remember that real estate speculators also received massive subsidies (frannie, mortgage deduction) even before the crisis. The banks, excluding GM, have more or less paid back their portion of the bailout (this even includes the AIG portion). Real estate speculators have not paid back their subsidies.

The anger should mostly be aimed at the banks. Especially in light of their dubious foreclosure practices.

Many loan originators did shoddy paperwork to save a buck, and didn't transfer the lien's to the right party. Real estate speculators are now exploiting the legal problems caused by this shoddy paperwork to break their contracts and squat in homes they don't own. The loan originators absolutely deserve to be sued by the bond purchasers over their negligence.

But the real state speculators are also culpable for exploiting legal quirks to steal homes from their rightful owners [1]. We may not be 100% sure whether BankAm Loan Issuing Corp, BankAm Loan Servicing Corporation or the MBS corporation is the rightful owner of a home - but we are quite sure that the squatters currently occupying it stopped paying their mortgage and therefore do not have any right to it. The squatters deserve to be foreclosed upon, and then the loan issuer, servicer and bondholders can fight over who really owns the home.

Banks are a convenient political target. But real estate speculators are just as guilty as the banks.

[1] Obviously, not all real estate speculators are doing this, but I have read quite a few media accounts of this.

Re: When Irish Eyes Are Crying

#54

Post by protomyth »

ebiester wrote: post #27
abrenzel wrote: post #8

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…

Don't forget the US has tax deductions for home buyers (interest), but nothing for renters.

Re: When Irish Eyes Are Crying

#55

Post by patrickk »

Wow, great to see Michael Lewis, one of my favorite authors, coming to little ol' Ireland and do such an in-depth piece on us. I had no idea that the insane decision to bail out Anglo Irish was so directly linked to Merrill Lynch's 'advice'.

Interesting fact: I was sitting less than 50m away from the heroic egg-thrower when he went for the kill. Wasn't in the same room unfortunately. We were warned to hide our bank ID badges that day going in and out of work :-)

Re: When Irish Eyes Are Crying

#56

Post by yummyfajitas »

muhfuhkuh wrote: post #44
yequalsx wrote: post #37

Earlier quoted context omitted.

I'm in Berlin now and it appears the Germans feel these so called bailouts are rescuing countries that don't have their affairs in order. I think these bailouts are mostly to prop up German and French banks. Banks in Europe and the U.S. have finally figured a way to socialize their losses and privatize their gains. Big bonuses are still the norm at American banks even though it was their bad bets that led the U.S. to…

"Big bonuses are still the norm at American banks even though it was their bad bets that led the U.S. to its current economic mess." I agree wholeheartedly, but there are _so_ many people who readily (and hastily) blame "dumb and poor" people who shouldn't have gotten mortgages, Fannie and Freddie (US loan guarantors) who backed those mortgages, and one rogue liberal US representative (Barney Frank) who somehow bulli…

...bullied the entire 500-member legislative branch and then President Bush into allowing more mortgages to be handed out to poor people...

Huh? Bush was a huge proponent of subsidizing mortgages, and making it easier for people to get loans without down payments. One of his initiatives: http://www.hud.gov/offices/cpd/affordablehousing/programs/ho...

Barney Frank and a large cohort of liberal representatives fought tooth and nail against Bush's efforts to more strongly regulate Fannie/Freddie, but that's a separate matter. All Bush wanted was more strict regulations of their risks, mainly interest rate risk. All mainstream politicians were (and still are) in favor of inflating the bubble by subsidizing home ownership.

Re: When Irish Eyes Are Crying

#57

Post by patrickk »

sp332 wrote: post #16
seanalltogether wrote: post #12

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.

Yes, the EU has those advantages, but it's bloated, unwieldy, mainly tries to serve the interests of Germany (biggest economy) and is ill-structured to deal with the type of problems currently affiliating the 'peripherals' (or 'PIGS': Portugal, Ireland, Greece, Spain). The features of a common monetary policy are great when times are good, but allows the problems of one nation to spread like a virus when times are bad. So it's a double-edged sword.

Re: When Irish Eyes Are Crying

#58

Post by gizmomagico »

yummyfajitas wrote: post #53
yequalsx wrote: post #39

Earlier quoted context omitted.

I guess it's fine to put a lot of blame on people who bought houses they ended up not being able to afford. However, there were fraudulant practices by mortgage companies. 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…

They are the ones that got ratings agencies to give high scores to the mortgage backed securities. And that's an issue between them and the people/institutions they sold those securities to. It does not in any way absolve individuals for making dumb bets, particularly when those individuals often lied on their loan applications. The housing bubble simply could not have occurred without financially illiterate people m…

> The banks, excluding GM, have more or less paid back their portion of the bailout (this even includes the AIG portion).

I'd be interested in hearing how that happened. It's difficult to believe.

Re: When Irish Eyes Are Crying

#59

Post by WalterBright »

yequalsx wrote: post #46
muhfuhkuh wrote: post #44

Earlier quoted context omitted.

"Big bonuses are still the norm at American banks even though it was their bad bets that led the U.S. to its current economic mess." I agree wholeheartedly, but there are _so_ many people who readily (and hastily) blame "dumb and poor" people who shouldn't have gotten mortgages, Fannie and Freddie (US loan guarantors) who backed those mortgages, and one rogue liberal US representative (Barney Frank) who somehow bulli…

Yeah, it's hard to convince people that the CRA was not responsible for the real estate collapse. There were property bubbles in Spain, Ireland, Britain, etc. The CRA was responsible for those, obviously. It's easy and natural for one to want to collapse a complicated issue into something manageable and understandable. Even if there is no evidence for it.

Holding interest rates artificially low, and very favorable tax treatment for real estate investments and gains, clearly added a lot of air to the bubble.

Re: When Irish Eyes Are Crying

#60

Post by abrenzel »

yummyfajitas wrote: post #53
yequalsx wrote: post #39

Earlier quoted context omitted.

I guess it's fine to put a lot of blame on people who bought houses they ended up not being able to afford. However, there were fraudulant practices by mortgage companies. 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…

They are the ones that got ratings agencies to give high scores to the mortgage backed securities. And that's an issue between them and the people/institutions they sold those securities to. It does not in any way absolve individuals for making dumb bets, particularly when those individuals often lied on their loan applications. The housing bubble simply could not have occurred without financially illiterate people m…

Spot on.

The whole "Fraudclosure" thing is a bit of a red herring. Yes, banks should be made to pay for their negligence in complying with basic mortgage laws, but does their negligence change the fact that the occupants of those homes have not and cannot pay their mortgages? The mortgages are delinquent, no matter who the actual owner of the note is. All the controversy has done is slow down a process that will eventually happen either way.

TBTF needs to go. Many banks, including big boys like JP Morgan and Bank of America, probably need to be recognized as insolvent despite the bailout money they took. The foreclosure mess in its own way probably only slows this down by continuing the cloud the status of the properties in question.

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