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pandora's box

People Need Hope For A Better Tomorrow

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On Monday night I went for a pint with an old friend who was distressed. His wife had just lost her job and that meant there was now no way they could pay the mortgage. There wasn’t enough money to go around and he explained it was now a case of “the bank or the family”. So he is going to stop paying the mortgage and try to negotiate with the bank to see whether he can reduce the monthly payment.

Once we create a system that allows the person to start again, we facilitate the return of hope.

On Monday night I went for a pint with an old friend who was distressed. His wife had just lost her job and that meant there was now no way they could pay the mortgage. There wasn’t enough money to go around and he explained it was now a case of “the bank or the family”. So he is going to stop paying the mortgage and try to negotiate with the bank to see whether he can reduce the monthly payment.

He is, like hundreds of thousands of others, juggling bills around to try to make ends meet. He said he can do this for a while longer, but he needs to see what the bank might offer to work out his next move. He hopes his wife will get another job soon, but the prospects are dim, at best, right now.

He is trying to keep the spirits up but what is freaking him out, as a 30-something man, is the prospect that the debt on the house — not a flash gaff — bought in 2005, might follow him around for the rest of his days.

Like me, he emigrated in the 1990s and, like me, came back in 2000 to an Ireland which looked full of opportunity for us to raise our families. There were over 200,000 of us who came back.

In fact, he was the subject of the final chapter of my 2005 book ‘The Pope’s Children’. He was the returned emigrant marvelling at the new Croke Park during the Dublin versus Meath game. And his story is particularly poignant for me because back then when we both went to Croker with our four-year-old children, he was filled with so much optimism.

For him and thousands of people like him, Ireland has become a large debtors’ prison with no payroll. There is no NAMA for him, no bailout.

In contrast, the delinquent banks have NAMA, the reckless bondholders have the IMF, but this guy has nobody.

No one is speaking up for him and, with the recovery in Germany in full swing, how long will it be before interest rates rise and he is tipped over the cliff?

That is what an economy is: it is only the numerical agglomeration of thousands of individual stories. Economics renders these stories sterile. It reduces them to numbers and when the weight of numbers gets too big, the financial system buckles, but until that point the default position for the establishment is that everything is “manageable”.

But at the end of September last, the number of mortgages in arrears or rescheduled stood at 70,000 out of a total of 788,000 mortgages in the country. So that is one in 11 mortgages.

Of this 70,000, some 40,500 were in arrears. For a mortgage to count as ‘in arrears’, there must have been no payment made on it in three months. These amounted to €7.9bn outstanding mortgages and the mounting arrears on these mortgages totalled €630m.

The general picture is that today there are over 200,000 mortgages in negative equity. Each one has a story.

In total, the figure is about €12bn and is the result of the 42pc fall in house prices, from the peak, which we have seen over the past three years.

If prices fall further, let’s say by 55pc from peak, the negative equity picture darkens to over 330,000 families — or about half of all properties bought since 2000. And this will get worse, if house prices fall yet further. So are they likely to fall further?

Yes. This is what typically happens when a bubble bursts. This is called “deleveraging” in economics. The people who have debts try to pay what they can and the banks try to pay back what they have borrowed.

The people who have money save and the leveraging or borrowing that fuelled the boom goes into reverse gear.

This means that the prices of all assets in the country keep falling as both the demand for, and supply of, credit dries up and the greater the original leverage, the greater the subsequent deleveraging.

And in Ireland the leverage was pretty outrageous. The loan to deposit ratio of the banking system was 160pc at the top of the boom, meaning that there was 60pc more loans out in the country than there were deposits in the banking system.

These loans are either now being repaid or defaulted on.

So what do we do about the hundreds of thousands of our friends, family, and work colleagues who are in negative equity now or will be in the future?

Any political party that is truly serious about tackling not just present but prospective problems in our society needs to address the ticking time bomb of negative equity and the certainty of mass default. Remember each one of these statistics masks a story — a story of dented hope, dashed ambitions and chilly insecurity. These are the people who need to be reassured.

A political party that changes the language of the campaign, the party that shows itself to be generous, forgiving and capable of empathy will make significant gains — and should do. Because this party will be putting the interests of the people first and the people need a break. We need hope.

On the issue of negative equity, a way forward would be to adopt the American system of non-recourse loans. This means that the loan is fixed to the house and not the person. So the person can hand back the keys and the loan doesn’t follow her around for the rest of her life. This means that the principle of co-responsibility is instated whereby the lender, as well as the borrower, is responsible.

If the bank made the mistake of lending too much to an individual, the bank pays. It gets the property and the individual is free to rent down the road or somewhere else. In this way, we do not penalise the person for his mistake indefinitely.

The person doesn’t get off scot-free either as they will not be allowed to stay in the house because it is the property of the bank and the bank will have to sell it.

But the person can start again and starting again is the essence. Once we create a system that allows the person, or the family, to start again we facilitate the return of hope. It is hope — the idea that tomorrow will be better than today — that gets us out of bed in the morning.

It is essential that we see economics through this prism. Economics and statistics are only the numerical aggregation of our stories and it’s the stories, not the numbers, that make our society.

David McWilliams link

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Three leading economic gurus look to run in election

Conor McMorrow and Shane Coleman

THREE of the country's leading economic commentators now look set to contest the upcoming general election, raising the prospect of a new reform-based political force emerging.

High-profile economist and author David McWilliams is believed to be planning to run as an independent candidate in the Dun Laoghaire constituency.

www.tribune.ie

I have a good feeling about this guy.

Edited by pandora's box

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Debt = misery. The less of it you have, the happier you will be.

That's an over-generalisation. I reckon most people here are debt-free but they don't seem at all happy. The emotions expressed on hpc seem to come under the headings: cynical, bitter, angry, malevolent...

Feel free to add to and/or amend this list.

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That's an over-generalisation. I reckon most people here are debt-free but they don't seem at all happy. The emotions expressed on hpc seem to come under the headings: cynical, bitter, angry, malevolent...

Feel free to add to and/or amend this list.

That's the side effects from everyone else around you taking on debt.

Like passive smoking.

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That's an over-generalisation. I reckon most people here are debt-free but they don't seem at all happy. The emotions expressed on hpc seem to come under the headings: cynical, bitter, angry, malevolent...

Feel free to add to and/or amend this list.

You are probably right about how people on here who are debt free feel that. Of course the reason that they are debt free is no doubt inter-twined with the fact that they have withdrawn from an overpriced housing market, but nonetheless wish to buy at some future point in time. The reason that prices are so high is that a bunch of fraudsters managed to gain control at a number of banks, and forwarded bizarre amounts of money to people who could not pay, driving up those house prices, forcing the borrowers into debts that they could not repay, and putting the mechanics of the financial system at risk. Much of the burden for the cost of this fraud will fall on the shoulders of those who were sensible and withdrew from housing market, so you can see why they are unhappy. These people did the right thing, and are forced to pay for everyone else's mistakes, including policies that tax them whilst keeping those who cannot afford it, in their homes.

By the way, are you from the Republic of Ireland? Just wanted to ask you some questions about the goings on there.

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You are probably right about how people on here who are debt free feel that. Of course the reason that they are debt free is no doubt inter-twined with the fact that they have withdrawn from an overpriced housing market, but nonetheless wish to buy at some future point in time. The reason that prices are so high is that a bunch of fraudsters managed to gain control at a number of banks, and forwarded bizarre amounts of money to people who could not pay, driving up those house prices, forcing the borrowers into debts that they could not repay, and putting the mechanics of the financial system at risk. Much of the burden for the cost of this fraud will fall on the shoulders of those who were sensible and withdrew from housing market, so you can see why they are unhappy. These people did the right thing, and are forced to pay for everyone else's mistakes, including policies that tax them whilst keeping those who cannot afford it, in their homes.

I wouldn't argue with any of that, except perhaps for 'sensible' and 'did the right thing'.

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That's the side effects from everyone else around you taking on debt.

Like passive smoking.

Is it possible to experience "passive smoking" any more?

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That's the side effects from everyone else around you taking on debt.

Like passive smoking.

I don't know. I don't think there was any real evidence for it (apart from Roy Castle).

Interesting. Half of us agree, half of us disagree and the other half don't know what to think.

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I spoke to a young Irish girl in Shoreditch on Friday night and vitually the first thing she said was "Ireland is fecked". She and her brothers (all in the UK I think) planned to return home at some point but are being urged by their parents to stay away. Tis sad what has happened to Ireland, but I don't think the UK is much of an escape.

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I spoke to a young Irish girl in Shoreditch on Friday night and vitually the first thing she said was "Ireland is fecked". She and her brothers (all in the UK I think) planned to return home at some point but are being urged by their parents to stay away. Tis sad what has happened to Ireland, but I don't think the UK is much of an escape.

It would seem there is no safe haven.

Time for a reset.

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Well I asked if you were from the Republic of Ireland? Can anyone else but you answer that?

Ah, I see: the question you want answering is, am I from the Republic of Ireland?

Now, what has that to do with the price of bread? ;)

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That's an over-generalisation. I reckon most people here are debt-free but they don't seem at all happy. The emotions expressed on hpc seem to come under the headings: cynical, bitter, angry, malevolent...

Feel free to add to and/or amend this list.

Don't forget nonchalance although it probably started life as cynicism.

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That's an over-generalisation. I reckon most people here are debt-free but they don't seem at all happy. The emotions expressed on hpc seem to come under the headings: cynical, bitter, angry, malevolent...

Feel free to add to and/or amend this list.

Our hope for a better tomorrow is everyone else's misery. Once they all default and get kicked out of their homes we can buy them on the cheap and then we get to be smug, carefree and happy and they get to be cynical, bitter and angry. Emotional full circle. Rinse and repeat.

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Our hope for a better tomorrow is everyone else's misery. Once they all default and get kicked out of their homes we can buy them on the cheap and then we get to be smug, carefree and happy and they get to be cynical, bitter and angry. Emotional full circle. Rinse and repeat.

If you are being ironic: very witty

If you are being serious: tosser.

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"Once we create a system that allows the person to start again (REPEAT SAME MISTAKES), we facilitate the return of hope (MAKE A KILLING ON HOUSE PRICES OR ANOTHER BUBBLE ).

On Monday night I went for a pint with an old friend who was distressed. His wife had just lost her job and that meant there was now no way they could pay the mortgage (BORROWED TO MUCH MONEY ON A HOUSE THEY COULDN'T AFFORD). There wasn't enough money to go around and he explained it was now a case of "the bank (TAX PAYER) or the family". So he is going to stop paying the mortgage (CHEERS) and try to negotiate with the bank (NICE) to see whether he can reduce the monthly payment.

He is, like hundreds of thousands of others, juggling bills around to try to make ends meet.(SHOULD HAVE THOUGHT ABOUT THAT BEFORE PURCHASING SOMETHING THEY COULD NOT AFFORD) He said he can do this for a while longer, but he needs to see what the bank might offer to work out his next move (BANKRUPCY). He hopes his wife will get another job soon, but the prospects are dim, at best, right now.

He is trying to keep the spirits up but what is freaking him out, as a 30-something man, is the prospect that the debt on the house — not a flash gaff — bought in 2005, might follow him around for the rest of his days.(NO DONT WORRY, WE WILL PAY IT OFF, BUY ANOTHER f****NG HOUSE WHILE WE RENT)

Like me, he emigrated in the 1990s and, like me, came back in 2000 to an Ireland which looked full of opportunity (MAKE A KILLING ON THE PROPERTY MARKET) for us to raise our families. There were over 200,000 of us who came back.

In fact, he was the subject of the final chapter of my 2005 book 'The Pope's Children'. He was the returned emigrant marvelling at the new Croke Park (A NEW BUILD) during the Dublin versus Meath game. And his story is particularly poignant for me because back then when we both went to Croker with our four-year-old children, he was filled with so much optimism.(AND UNSUSTAINABLE AT THAT)

For him and thousands of people like him, Ireland has become a large debtors' prison with no payroll.(JOIN THE CLUB) There is no NAMA for him, no bailout.

In contrast, the delinquent banks have NAMA, the reckless bondholders(THOSE PESKY BONDHOLDERS) have the IMF, but this guy has nobody.

No one is speaking up for him and, with the recovery in (PRUDENT) Germany in full swing, how long will it be before interest rates rise (SOON HOPEFULLY ) and he is tipped over the cliff?

That is what an economy is: it is only the numerical agglomeration of thousands of individual(LIAR LOANS) stories. Economics renders these stories sterile (NOT TO ME). It reduces them to numbers and when the weight of numbers gets too big, the financial system buckles (AND THEY GET AWAY WITH IT), but until that point the default position for the establishment is that everything is "manageable".

But at the end of September last, the number of mortgages in arrears or rescheduled stood at 70,000 out of a total of 788,000 mortgages in the country. So that is one in 11 mortgages.(NOT ENOUGH)

Of this 70,000, some 40,500 were in arrears. For a mortgage to count as 'in arrears', there must have been no payment made on it in three months. These amounted to €7.9bn outstanding mortgages and the mounting arrears on these mortgages totalled €630m.

The general picture is that today there are over 200,000 mortgages in negative equity. Each one has a story.(AND MOST INVOLVE GREED)

In total, the figure is about €12bn and is the result of the 42pc(CORRECTION) fall in house prices, from the (RIDICOLOUS) peak, which we have seen over the past three years............................................................................................................."

(I am sympathetic to people's plight and the Government/Banks/Economists/Media/EA's take slightly more blame than the public, i just think i should be exempt from paying for their mistakes and before we "Start Again" learn something and then maybe even change something."

Edited by Hywel Dda

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  • 309 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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