xux42 Posted September 30, 2010 Share Posted September 30, 2010 (edited) Yes, it has been on the news all day but Channel 4 were leading on not just the possibility of Eire going but but what affect it would have on us and the EU countries. Not a lot. Eire accounts for just over 0.25% of the world economy. Total collapse of the Irish economy would create shockwaves around the world which would settle down quite quickly as it could be contained. Would be nasty for the Irish themselves, obviously. Spain and Italy are about 2% - now their failure and the resultant domino effect, which is just as likely, would create a full blown, protracted European crisis or even a worldwide depression. IMHO that is. Edited September 30, 2010 by xux42 Quote Link to comment Share on other sites More sharing options...
Kyoto Posted September 30, 2010 Share Posted September 30, 2010 Too big to fail innit .. What does that mean? The goldman sachs of this world and their ilk will all take a bath if they go down? 99% of the people in Ireland would be unaffected, and their country wouldn't be bankrupt. Serious question - why do the government need to stand behing their private sector banks? When some of our banks went down - Northern Rock, B&B, even HBOS, it didn't make the UK a leoper both in terms of the sovereign raising money and our other banks. Quote Link to comment Share on other sites More sharing options...
SNACR Posted September 30, 2010 Share Posted September 30, 2010 I know one of the guys who "still has the money" from the UK bubble. He was a developer during the boom years, made a mint and built himself a big detached house for cash with several sports cars on the drive. He knew the top was in in 2006/7, told us it was, cashed in and walked away. Now he lives a life of leisure. They always say it's difficult to extract liquidity from a bubble, but he managed it. The money he walked away with came from RBS/NR/HBOS etc mortgages that are never going to be repaid in full. How can the system get that money back from him? I guess if there's a run on his bank he might lose his savings, but that's a pretty unlikely outcome, and he will still own his house. When he mistakenly thinks he can also call the next bottom or when the erosion of his cash pile by inflation becomes so pronounced it gnaws away at him and he shoves it in some riskier investment. It's much harder to live a life of leisure with a cash pile than people imagine, particularly if you're someone whose career has thrived on doing deals. No matter how much you've got stashed there's always a deal in the offing somewhere that'll swallow up everything you've got. To go with it there's almost always another deal with a potentially much bigger upside for just that bit more than you've got to spare, so you end up calling the bank.......and that's when the trouble starts. Quote Link to comment Share on other sites More sharing options...
pyracantha Posted September 30, 2010 Share Posted September 30, 2010 I was listening to Radio Scotland news earlier. The Irish who were being interviewed were saying things like it's going to take 40-50 years to sort this out. Having worked there the last 2 years and seen what was going on, i am inclined to agree. They are sooo screwed. And we may not be far behind. Quote Link to comment Share on other sites More sharing options...
ralphmalph Posted September 30, 2010 Share Posted September 30, 2010 What does that mean? The goldman sachs of this world and their ilk will all take a bath if they go down? 99% of the people in Ireland would be unaffected, and their country wouldn't be bankrupt. Serious question - why do the government need to stand behing their private sector banks? When some of our banks went down - Northern Rock, B&B, even HBOS, it didn't make the UK a leoper both in terms of the sovereign raising money and our other banks. First point you make - 99% of the people in Ireland would suffer because they would lose there money in the banks, hae thier mortgages cancelled, etc. The country would not be bankrupt by the definition applied to companies but if they let the banks default then they could not borrow and they need to borrow 13% of GDP (excluding bank bailoits) so overnight they would have to balance expenditure to income. Massive reductions in pensions, welfare, public sector employment. Second point - because of the above. That is because in those cases (except HBOS) we wiped out the shareholders and nationalised the rest and honoured the debts and the depositers. Quote Link to comment Share on other sites More sharing options...
interestrateripoff Posted September 30, 2010 Share Posted September 30, 2010 The Irish haven't been allowed to give the senior bondholders a haircut. We gave them one when we devalued the pound by 1/3 in just a few months. Oh and we adjusted our wages in international terms by the same amount and our prices. Indeed, some of their problem is because their largest trading partner did just that. You appear to be suggesting the savior of known universe shafted Ireland? Although wouldn't that be a very short sighted shafting as I'm guessing Ireland going under will give the UK a few problems? Quote Link to comment Share on other sites More sharing options...
ralphmalph Posted September 30, 2010 Share Posted September 30, 2010 Not a lot. Eire accounts for just over 0.25% of the world economy. Total collapse of the Irish economy would create shockwaves around the world which would settle down quite quickly as it could be contained. Would be nasty for the Irish themselves, obviously. Spain and Italy are about 2% - now their failure and the resultant domino effect, which is just as likely, would create a full blown, protracted European crisis or even a worldwide depression. IMHO that is. Remember Credit Anstalt (SP?) in the 30's. Small bank in a small country, went bust, global depression. Quote Link to comment Share on other sites More sharing options...
Kyoto Posted September 30, 2010 Share Posted September 30, 2010 First point you make - 99% of the people in Ireland would suffer because they would lose there money in the banks, hae thier mortgages cancelled, etc. The country would not be bankrupt by the definition applied to companies but if they let the banks default then they could not borrow and they need to borrow 13% of GDP (excluding bank bailoits) so overnight they would have to balance expenditure to income. Massive reductions in pensions, welfare, public sector employment. Second point - because of the above. That is because in those cases (except HBOS) we wiped out the shareholders and nationalised the rest and honoured the debts and the depositers. What's wrong with paying back depositors under guarantee schemes, but letting all of the institutions and unsecured debtors go whistle? Mortgages wouldn't be cancelled - they would be sold on as an asset. Repeating my point, if the private bank goes down, why would that be catastrophic re the state being able to borrow and fund their requirements? Quote Link to comment Share on other sites More sharing options...
Giordano Bruno Posted September 30, 2010 Share Posted September 30, 2010 What's wrong with paying back depositors under guarantee schemes, but letting all of the institutions and unsecured debtors go whistle? Mortgages wouldn't be cancelled - they would be sold on as an asset. Repeating my point, if the private bank goes down, why would that be catastrophic re the state being able to borrow and fund their requirements? Of course that would be an option. But we are not supposed to think like that, it seems. The bankers and their cronies wouldn't like it. Quote Link to comment Share on other sites More sharing options...
ralphmalph Posted September 30, 2010 Share Posted September 30, 2010 What's wrong with paying back depositors under guarantee schemes, but letting all of the institutions and unsecured debtors go whistle? Mortgages wouldn't be cancelled - they would be sold on as an asset. Repeating my point, if the private bank goes down, why would that be catastrophic re the state being able to borrow and fund their requirements? Because of you first sentance where you say let unsecured debtors goes whistle. In Irelands case the majority of these are foreign so when they lose money the last place they would put it again is the place they have just lost it. Quote Link to comment Share on other sites More sharing options...
SNACR Posted September 30, 2010 Share Posted September 30, 2010 What's wrong with paying back depositors under guarantee schemes, but letting all of the institutions and unsecured debtors go whistle? Mortgages wouldn't be cancelled - they would be sold on as an asset. Repeating my point, if the private bank goes down, why would that be catastrophic re the state being able to borrow and fund their requirements? People on here who'd just STR'd the day before might not have been thrilled. Too awful to contemplate. It's not just the savers it's all the money that's just temporarily passing through. I think they should have been let go but the wall to wall news coverage of ordinary hard working people who'd lost almost everything would have been apocalyptic and probably led to a run on every bank. Imagine you've just retired and sold the hotel business you've worked hard to build up for years. The transaction's just completed and the money's sat in your bank account and then poof it's gone and you're left with almost nothing. Quote Link to comment Share on other sites More sharing options...
Saving For a Space Ship Posted September 30, 2010 Share Posted September 30, 2010 (edited) "When Irish lies are failing... Sure, they steal your purse away". 'Eire-gentina' anyone ? Edit: Having said that, after a quick google, the term was coined on hpc forum by 'OnlyMe' in 2005 http://www.housepricecrash.co.uk/forum/index.php?showtopic=15599 Having said that the Eiregentina economy could conjour up quite a few surprises over the next decade one sidestep from the low rate wonderland and it could be a whole different ballgame. and again Edited September 30, 2010 by Saving For a Space Ship Quote Link to comment Share on other sites More sharing options...
Guillotine Posted September 30, 2010 Share Posted September 30, 2010 RBS would have ruined an independent Scotland worse. Not that us English have much to cheer about either. Quote Link to comment Share on other sites More sharing options...
Traktion Posted September 30, 2010 Share Posted September 30, 2010 Because of you first sentance where you say let unsecured debtors goes whistle. In Irelands case the majority of these are foreign so when they lose money the last place they would put it again is the place they have just lost it. Exactly - the banks hold the very sovereign bonds which would take a hair cut. A sovereign default, via the back door. Not good when you rely on deficit spending year in, year out. As others have said here in the past, it's not about saving the depositors, it's about saving the bond holders. Quote Link to comment Share on other sites More sharing options...
Traktion Posted September 30, 2010 Share Posted September 30, 2010 And let us not forget in all this that: SOMEONE STILL HAS THE MONEYTM Eric Pebble It doesn't just disappear. Unless there is an awfully big sofa in Ireland. Amen to that! Quote Link to comment Share on other sites More sharing options...
OnlyMe Posted September 30, 2010 Share Posted September 30, 2010 "When Irish lies are failing... Sure, they steal your purse away". 'Eire-gentina' anyone ? Edit: Having said that, after a quick google, the term was coined on hpc forum by 'OnlyMe' in 2005 http://www.housepricecrash.co.uk/forum/index.php?showtopic=15599 and again Sorry, I'm such a killjoy. I was going to buy one of these and be a good spender, the fookers have sold out! http://ink-d.co.uk/artists/nick-reynolds/all/bankrupt-of-england Quote Link to comment Share on other sites More sharing options...
maxdiver Posted September 30, 2010 Share Posted September 30, 2010 Ireland is a clear example of Dutch Disease. One part of the economy - high tech. multinational companies (Dell, Pfizer, Intel etc...) employed few people (about 100,000 out of a workforce of 2 Million. Their contributions to tax was high (thanks for low tax rates. The economy then starts putting money into other things such as property, leisure, soft furnishings etc... These then overtake the rest of the economy. And then something bad happens and all the bricks fall down creating a big mess. The name comes from the presence of large gas fields in Northern Holland - which made everyone rich!!! so they all pissed it up the wall. Same thing is happening here in Aberdeen too. I'm Irish and I'm really ashamed of this farce - the government have made wrong call after wrong call. Like driving the wrong way - not asking for directions - not taking a map and not listening to any backseat drivers. It's farcical if it was not so tragic. Quote Link to comment Share on other sites More sharing options...
Ash4781 Posted October 1, 2010 Share Posted October 1, 2010 Will they be able to stabilise house prices ? falling wages and equity destruction on a breathtaking scale and high unemployment. Quote Link to comment Share on other sites More sharing options...
azogar Posted October 1, 2010 Share Posted October 1, 2010 simple answer - we aren't in the euro, luckily will still have a house price correction, but not as brutish This is true, but it depends on sterling weakness as the forefeit Quote Link to comment Share on other sites More sharing options...
Brian Potter Posted October 1, 2010 Share Posted October 1, 2010 And let us not forget in all this that: SOMEONE STILL HAS THE MONEYTM Eric Pebble It doesn't just disappear. Unless there is an awfully big sofa in Ireland. I have often argued this point. For every loser there is a winner. Money has just changed hands but it is more complicated than a rich/poor swap. The developers are a business like any other - they follow what they perceive as opportunity to make money - we all do unless we are communist. I worked for a developer in the north in a self employed capacity. I earned reasonable money selling my skills and saved a fair sum - Anglo Irish pulled the plug in early 2008 on a £20m residential scheme I was on which was bearly out of the ground. The developer I worked for lost all his profits on the schemes he had as the high rise demand went flat. The losers in this were Anglo and the developer (mainly Anglo). Arguably people like myself were on the winning side because we were paid for our services. Many were paid and many spent that in their local economy - so indirectly many were beneficiaries. A few made huge sums by fleecing the backs via credit default swaps (read 'The big Short'). Indirectly many people benfitted from the cash but many were also stupid and blew it. I didn't and I don't apologise for that. Quote Link to comment Share on other sites More sharing options...
fluffy666 Posted October 1, 2010 Share Posted October 1, 2010 Indirectly many people benfitted from the cash but many were also stupid and blew it. I didn't and I don't apologise for that. Blowing the cash is your patriotic duty, don't you know?? Quote Link to comment Share on other sites More sharing options...
Saving For a Space Ship Posted October 1, 2010 Share Posted October 1, 2010 (edited) Irish crisis vid bit from last nights BBC 10pm news Anglo-Irish was 'systemic threat' BBC Vid link C4 7pm News Vid Link Edited October 1, 2010 by Saving For a Space Ship Quote Link to comment Share on other sites More sharing options...
Realistbear Posted October 1, 2010 Share Posted October 1, 2010 http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/8035645/Hedge-funds-hold-Ireland-to-ransom-over-Anglo-Irish-Bank-bail-out.html Hedge funds hold Ireland to ransom over Anglo Irish Bank bail-out Hedge funds are holding the Irish government to ransom over its €30bn (£26bn) bail-out of one of the country's biggest lenders, Anglo Irish Bank. By Harry Wilson Published: 11:41PM BST 30 Sep 2010 111 Comments Brian Lenihan, Ireland's finance minister, attempted to calm market fears over the effect the cost of the bail-out would have on the country Photo: PA The investors are attempting to force the Irish authorities to pay them more for the debt they hold in Anglo Irish Bank and say if their demands are not met they could trigger a default crisis. Knee-cap brigade want their money--or else. Good thing its all contained in the EZ. Euro up again this morning. Quote Link to comment Share on other sites More sharing options...
yelims Posted October 1, 2010 Share Posted October 1, 2010 (edited) firstly to the obviously racist posters, get a grip ireland is not your colony for a long time now, no need for derogatory comments please! secondly i am surprised at some of the comments, lets go thru them: * "UK is Ireland's biggest trading partner" - No its 3rd largest behind EU and US (see central statistics office), and yes devaluation in UK had an effect about 2 years ago * "Thankfully, our house prices havent crashed as much" - Are you for real last i checked the title of this site says housepricecrash, the house price crash in Ireland was long overdue and much needed, me and everyone else who kept their heads on welcome it, it has burned the reckless and the stupid, and too ******ing right, if the crash ever comes to UK im sure many of you wont spare a tear for BTLers, banks and developers * "The euro is bad for Ireland" - the euro is the only thing keeping this country from going arseways altogether and providing some certainty at a bad time, it wasnt the euro membership that destroyed the country BUT it was ******ing greed, stupidity and easy credit (oh and the retarded government), if you cant see that then you really should get over your prejudicies and put the blame squarely where it belongs * "Anglo is systematic" - no it ******ing wasnt, the bank doesnt even have atms or many "normal" customers for that matter, it was a bailout for governments buddies now about myself, despite the shit of last 2 years i am doing better than ever (IT sector, exports), i seen the crash coming years ago and have saved and invested wisely, when the crash came i picked up a large new ~230m2 house and completed to an almost passive standard (a rated), i also now have alot of land on which im growing various fruit and vegetables and have a wind generator (windy location on hill) paying most of my electric bills, my company has hired yet another person and i started up a sister company offshore to keep my savings out of this country, i will not be paying for the mess created by bankers and politicians and will continue to invest my own (and my families) sustainable future the houseprice crash in ireland is the best thing that could have happened to anyone who remained sensible, pitty the UK is not following suit Edited October 1, 2010 by yelims Quote Link to comment Share on other sites More sharing options...
Minos Posted October 1, 2010 Share Posted October 1, 2010 http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/8035645/Hedge-funds-hold-Ireland-to-ransom-over-Anglo-Irish-Bank-bail-out.html Hedge funds hold Ireland to ransom over Anglo Irish Bank bail-out Hedge funds are holding the Irish government to ransom over its €30bn (£26bn) bail-out of one of the country's biggest lenders, Anglo Irish Bank. By Harry Wilson Published: 11:41PM BST 30 Sep 2010 111 Comments Brian Lenihan, Ireland's finance minister, attempted to calm market fears over the effect the cost of the bail-out would have on the country Photo: PA The investors are attempting to force the Irish authorities to pay them more for the debt they hold in Anglo Irish Bank and say if their demands are not met they could trigger a default crisis. Knee-cap brigade want their money--or else. Good thing its all contained in the EZ. Euro up again this morning. That God we've got the forces to beat the peasants into submission if they don't like it. Quote Link to comment Share on other sites More sharing options...
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