Little Dutch Thread -- bubble burst -- merged

[Mugwump]

Does any of this sound familiar. Can the UK really escape? I doubt it, somehow.

http://www.spiegel.de/international/europe/economic-crisis-hits-the-netherlands-a-891919.html#ref=rss

Its a longish read, but worth it.

Muggers.

[dances with sheeple]

Does any of this sound familiar. Can the UK really escape? I doubt it, somehow.

http://www.spiegel.d...19.html#ref=rss

Its a longish read, but worth it.

Muggers.

So the guy manages risk for ING, but jumps into the property ponzi like a schoolboy on heat? The UK can magic up money, that is the only difference, and the average Dutch punter is probably slightly more intelligent than the average UK Sheep in a Jeep?

[The Masked Tulip]

Apparently Holland woke up this morning and discovered it has an economic crisis. Well I never.

[Stay Beautiful]

Apparently Holland woke up this morning and discovered it has an economic crisis. Well I never.

Yeah but tourists can still buy dope

[frederick]

Apparently Holland woke up this morning and discovered it has an economic crisis. Well I never.

How many countries in Europe are not up to their eyeballs in debt, Norway due to oil, any others?

Its a serious question, will we be having a big German thread? If so I think that's when the house of cards falls down.

[Damik]

Does any of this sound familiar. Can the UK really escape? I doubt it, somehow.

http://www.spiegel.d...19.html#ref=rss

Its a longish read, but worth it.

Muggers.

house prices are falling everywhere, excluding London .... ((

[piece of paper]

They could build a house museum next to the tulip museum.

p-o-p

[dances with sheeple]

The problems are spreading through the EZ like a spiders web, something is going to blow, hopefully the whole lot will just implode in on itself, and many many bankers will get their fingers burned.

[Executive Sadman]

The spivs loan is 'under water'...

The bloody loan was under water the minute he took it out...instant negative equity loan.

Impressive that unemployment has gone up nearly 2% in the last year.

[South Lorne]

Does any of this sound familiar. Can the UK really escape? I doubt it, somehow.

http://www.spiegel.de/international/europe/economic-crisis-hits-the-netherlands-a-891919.html#ref=rss

Its a longish read, but worth it.

Muggers.

..the UK is 'escaping' because the previous and this government have inserted artificial props to support House Prices....Osborne is morphing into Brown to develop another bubble with his fancy mortgage scheme which uses taxpayers money!....how dim can you get..?..the sooner we have an election the better to vote for a party who is willing to face up to our issues ...not treat financial sewage with more financial sewage...what did they teach these people at Eton ...?....they are not exactly the team sporting type ....all we want is common sense as a starter ...the rest usually falls in place after that.....

Edited April 3, 2013 by South Lorne

[Venger]

The spivs loan is 'under water'...

The bloody loan was under water the minute he took it out...instant negative equity loan.

Obviously a victim, and couldn't have expected to see it coming, as simply a person who does due diligence in finance every day. They all play dumb and innocent when their homes start to lose value. It's less House of Orange, and more Homeowners in the Red.

2 online gaming guys I know (from war-games) lost their jobs in NL within the last two years. Both mid 30s and never owed a home, but no huge mortgage debt either. One in rural Friesland (got their own language there) whilst I think the other one has always lived with his parents in one of the cities.

No doubt those who kept taking on ever bigger mortgages where there is only boom need all the sympathy for being bold enough to take on huge debt to push up house prices further still. I know NL house prices have fallen back 7% or so last year. Keep blocking out the opportunities for value for those who didn't take on the huge debt.

"Sticking the knife in even more deeply" would be "very, very unreasonable,

For those in heavy debt who don't want to see the value of their homes fall. Not for savers who've been waiting for buying opportunity.

[interestrateripoff]

Apparently Holland woke up this morning and discovered it has an economic crisis. Well I never.

We are still asleep.

[thecrashingisles]

They could have had ours if RBS hadn't been missold ABN Amro. Not heard them offering to pay their part of the bill. I suppose that's what they mean by 'going Dutch'.

They did pay their part of the bill. Remember Fortis?

[Nationalist]

Same old story - too many people taking on too much debt. I love the idea of borrowing more than 100% of the value of your house and using the surplus to start a fund which will eventually grow big enough to pay off the mortgage. Why didn't we think of that?

However, let's not forget this is the country which gave us tulips.

Edited April 3, 2013 by Nationalist

[cashinmattress]

link

Michel Scheepens is familiar with risk. The 41-year-old oversees the energy market for the Dutch bank ING, and it's his job to determine whether his employer should finance such projects as a wind farm in Cyprus or a gas-fired power plant in Turkey. Until now, it was always other people's money that was involved.

For some time, however, Scheepens has been experiencing what a poor investment feels like on a personal level. Six years ago, the father of three bought half of a duplex for his family in the commuter town of Nieuw-Vennep, near the North Sea coast. The red brick building cost €430,000 ($552,000), but the bank generously offered him a loan of €500,000, so that there was enough money left over for renovations, along with notary and community fees. Scheepens had intended to resell the house after a few years, as is common in the Netherlands. But then prices tumbled following the Lehman bankruptcy. If the family were to sell the house today, it would have to pay the lender €60,000. His house is "onder water," as Scheepens says.

"Underwater" is a good description of the crisis in a country where large parts of the territory are below sea level. Ironically, the Netherlands, once a model economy, now faces the kind of real estate crisis that has only affected the United States and Spain until now. Banks in the Netherlands have also pumped billions upon billions in loans into the private and commercial real estate market since the 1990s, without ensuring that borrowers had sufficient collateral.

Private homebuyers, for example, could easily find banks to finance more than 100 percent of a property's price. (sound familiar?) "You could readily obtain a loan for five times your annual salary," says Scheepens, "and all that without a cent of equity." This was only possible because property owners were able to fully deduct mortgage interest from their taxes.

Instead of paying off the loans, borrowers normally put some of the money into an investment fund, month after month, hoping for a profit. The money was to be used eventually to pay off the loan, at least in part. But it quickly became customary to expect the value of a given property to increase substantially. Many Dutch savers expected that the resale of their homes would generate enough money to pay off the loans, along with a healthy profit. (sound familiar?)

More than a decade ago, the Dutch central bank recognized the dangers of this euphoria, but its warnings went unheeded. Only last year did the new government, under conservative-liberal Prime Minister Mark Rutte, amend the generous tax loopholes, which gradually began to expire in January. But now it's almost too late. No nation in the euro zone is as deeply in debt as the Netherlands, where banks have a total of about €650 billion in mortgage loans on their books.

Consumer debt amounts to about 250 percent of available income. By comparison, in 2011 even the Spaniards only reached a debt ratio of 125 percent.

The Netherlands is still one of the most competitive countries in the European Union, but now that the real estate bubble has burst, it threatens to take down the entire economy with it. Unemployment is on the rise, consumption is down and growth has come to a standstill. Despite tough austerity measures, this year the government in The Hague will violate the EU deficit criterion, which forbid new borrowing of more than 3 percent of gross domestic product (GDP).

It's a heavy burden, especially for Dutch Finance Minister Jeroen Dijsselbloem, who is also the new head of the Euro Group, and now finds himself in the unexpected role of being both a watchdog for the monetary union and a crisis candidate.

Even €46 billion in austerity measures are apparently not enough to remain within the EU debt limit. Although Dijsselbloem has announced another €4.3 billion in cuts in public service and healthcare, they will only take effect in 2014.

"Sticking the knife in even more deeply" would be "very, very unreasonable," Social Democrat Dijsselbloem told German daily Frankfurter Allgemeine Zeitung, in an attempt to justify the delay. It's the kind of rhetoric normally heard from Europe's stricken southern countries. The adverse effects of living beyond one's means have become apparent since the financial crisis began. Many of the tightly calculated financing models are no longer working out, and citizens can hardly pay their debts anymore. The prices of commercial and private real estate, which were absurdly high for a time, are sinking dramatically. The once-booming economy is stalling.

Unemployment on the Rise

"A vicious cycle develops in such situations," says Jörg Rocholl, president of the European School of Management and Technology in Berlin and a member of the council of academic advisors to the German Finance Ministry. "Customers have too much debt and cannot service their loans. This causes problems for the banks, which are no longer supplying enough money to the economy. This leads to an economic downturn and high unemployment, which makes loan repayment even more difficult."

The official unemployment rate has already climbed to 7.7 percent. In reality, it is probably much higher, but that has been masked until now by a demographic group called the ZZP. The "Zelfstandigen zonder personeel" ("Self-employed without employees") are remotely related to the German model of the "Ich-AG" ("Me, Inc."). About 800,000 ZZPers currently work in the Netherlands.

One of them is Rob Huisman. The 47-year-old lives with his wife and son in Santpoort, near Haarlem. In 2006 Huisman, an IT specialist, left his position with a large consulting firm to start his own business. It went well at first, with Huisman earning €100 an hour. But over time many customers, both governmental and private, slashed the fees they were willing to pay. Sometimes jobs were simply deleted altogether. "For companies it's worthwhile to let their permanent employees go and then take on temporary work contracts," says the IT expert. "It saves them the social security costs."

There is cutthroat competition among the self-employed, who are undercutting each other to secure occasional jobs. "If you don't accept a job, someone else will snap it up," says Huisman. In addition, he is unable to pay contributions to his retirement fund at the moment. "We are living largely on our savings," he says.

No End in Sight

The Dutch were long among Europe's most diligent savers, and in the crisis many are holding onto their money even more tightly, which is also toxic to the economy. "One of the main problems is declining consumption," says Johannes Hers of the Centraal Planbureau in The Hague, the council of experts at the Economics Ministry.

His office expects a 0.5-percent decline in growth for 2013. Some 755 companies declared bankruptcy in February, the highest number since records began in 1981. The banking sector is also laying off thousands of employees at the moment. (sound familiar?)

Because of the many mortgage loans on the books, the financial industry is extremely inflated, so much so that the total assets of all banks are four-and-a-half times the size of economic output. (sound familiar?)

In February, the government was forced to nationalize SNS Bank, the country's fourth-largest bank, because it had a large portfolio of bad loans for commercial real estate. The remaining banks only want to securitize a portion of their giant loan portfolios and resell the securities through a special mortgage bank -- primarily to the country's pension funds, where the Dutch have put away large sums for retirement.

Young families like the Scheepens, who have bought a home in recent years, are now hoping that they can at least keep their jobs. Although their duplex has lost value, they can still make the monthly payments.

But the cuts are getting closer. A neighbor recently lost his job, and well-educated people can no longer find jobs. "There is no end to the crisis in sight," says Scheepens.

Same symptoms, same results. This banking lead pillage and plunder is pandemic in proportion.

Where does it end for the UK, Netherlands et al, and where is the next sucker?

Edited April 3, 2013 by cashinmattress

[Gone baby gone]

Where does it end for the UK, Netherlands et al, and where is the next sucker?

The "lucky country"

Only a matter of time...

[pjw]

I'm thinking it's time the eurozone members started to Go Dutch - but you might call me a Dutch Uncle for saying so. I would say these eurozone bills have becoming a Dutch Reckoning! Why not drown your sorrows - but bear in mind your Dutch Courage will get your nowhere with me. Even the Dutch Widows cost money. Your claims of a recovery in sight are frankly just Double Dutch!

[Bloo Loo]

Shes gonna blow captain, those bankons havent been flushed from the warp drive....i canna understand whats keeping them there...

[Blod]

"Private homebuyers, for example, could easily find banks to finance more than 100 percent of a property's price. (sound familiar?) "You could readily obtain a loan for five times your annual salary," says Scheepens, "and all that without a cent of equity." This was only possible because property owners were able to fully deduct mortgage interest from their taxes.

Even now the BTL sector benefits from this loophole.

[deflation]

In the USA, mortgage interest payments are tax-deductable on your own house. However, with ZIRP, the tax deductions are very low so rents don't have to be suppressed so much any more to compete. Hence, the rise in 'buy to rent' as they call it.

[dryrot]

So the guy manages risk for ING, but jumps into the property ponzi like a schoolboy on heat? The UK can magic up money, that is the only difference, and the average Dutch punter is probably slightly more intelligent than the average UK Sheep in a Jeep?

"Michel Scheepens is familiar with risk. The 41-year-old oversees the energy market for the Dutch bank ING, and it's his job to determine whether his employer should finance such projects as a wind farm in Cyprus or a gas-fired power plant in Turkey."

Nice job. Into the office at 9, a "no" and a "yes" and then off to the pub?

Edited April 3, 2013 by dryrot

[Eddie_George]

"Michel Scheepens is familiar with risk. The 41-year-old oversees the energy market for the Dutch bank ING, and it's his job to determine whether his employer should finance such projects as a wind farm in Cyprus or a gas-fired power plant in Turkey."

Nice job. Into the office at 9, a "no" and a "yes" and then off to the pub?

Brilliant!

[Snafu]

Obviously a victim, and couldn't have expected to see it coming, as simply a person who does due diligence in finance every day. They all play dumb and innocent when their homes start to lose value. It's less House of Orange, and more Homeowners in the Red.

2 online gaming guys I know (from war-games) lost their jobs in NL within the last two years.

You're not from planetside2 are you? Off topic I know.

[erranta]

However, let's not forget this is the country which gave us tulips.

A greeny 'eco'-loon BULB (mercury) - inferior lighting - never saw the coming implosion

[Venger]

You're not from planetside2 are you? Off topic I know.

No; RTCW (Return To Castle Wolfenstein) which only has a few 10s players left in the multiplayer, from its release in 2001. Was very popular for years, with many thousands of players from Europe and US playing the multiplayer maps. Loads of NL players especially. Was great fun with the headsets and on ventrilo for voice-comms in game to coordinate tactics on the battle field. Never did manage to beat one of the higher ranking German clans in the Alpha League which called our UK clan 'Island Monkeys' in the countdown to a match, before the game began to lose players to newer games.

Just checked Planetside2; interesting looking game, but checking the system requirements section, my computer doesn't come close to meeting the requirements of even the minimum recommended. Especially on the processor, the video card for that matter, and certainly not on a minimum of 4GB or RAM.

Been denying myself a new computer for years, as little time for gaming and my reactions aren't as good as someone in their 20s, but more inclined to spend and treat myself at the moment with threats to savings, beyond QE. Saving deposit fears and many individual authorities claiming QE forever, with no market value for those who saved and waited for correction.