November 1, 2012

Squeezed middle class families need banks to shoulder bad debt blame

Posted in Irish Independent · 167 comments ·
Share 

A MORTGAGE debt deal is the single biggest issue facing the country at the moment. Hundreds of thousands of our fellow citizens — brothers, sisters, sons, daughters, husbands and wives, friends and people across the room at work — are caught in a twilight world of too much mortgage debt and too little income.

There are 128,000 mortgages in arrears. This is 16pc of all mortgages. There are 710,000 mortgages in the country. In terms of those needing help, most of these mortgages belong to couples with children, so there are close to 200,000 people affected.

Not all need help right now but many certainly do. History suggests that when an economy is caught in a debt brace, things hold together for a while as people scrimp and save and then they unravel very quickly when something happens, such as the birth of another child, and the bills just don’t add up.

The heroine of my new book, ‘The Good Room’, is a 32-year-old pregnant woman and she is typical of dozens of people I have spoken to over the course of the past two years of research. She is a teacher, but as a young teacher she has no job security, is paid much less than her senior staff-room colleagues and, unlike the older teachers, she is carrying a large mortgage taken out in 2006 and now deeply in negative equity. This is the story of a generation.

Significantly, now that the housing market has tanked, these people are being described as reckless and the insinuation is that they were in some way cavalier with money.

However, when you think about it, many of the people who took out huge mortgages did so not because they were being reckless but because they were doing what they thought was the responsible thing at the time. They were bombarded by incessant financial propaganda by banks and estate agents, while at a more subtle, familial level, they were exposed to parental pressure urging them to buy because that is what “responsible young parents” do.

Now their financial hole is getting bigger because even if they are servicing all their loans — and many tens of thousands are — there is no money at the end of the month, so as one of the contributors told me on last week’s ‘Late Late’, he isn’t “a functioning member of the economy” because he has no money left after he pays his mortgage.

If he isn’t spending, then someone else isn’t earning and if that someone else isn’t earning, he in turn isn’t spending and you can see how the entire economy can grind to a halt because we are paying off too much bad debt. This is a recipe for economic stagnation.

Thus, in addition to giving people hope, we must appreciate that keeping thousands of people in a debtor’s prison benefits nobody. So it is in your interest that we lighten the immediate debt burden on our neighbours.

So how could it be done in such a way as not to bankrupt the nation again? This is where the principle of “co-responsibility” comes in, meaning that the bank and the borrower both shoulder the bad debt burden. Both parties are responsible. So how can this be done?

The bank can preside over a debt for equity swap. This means if you owe, for example, €300,000 on a mortgage but can’t pay it, the bank risks you walking away and losing everything while you lose your house. This is hardly the best way forward.

In the US in the 1930s they introduced a scheme whereby the bank and the individual did a deal. The person’s mortgage was reduced and the bank was compensated by being offered half of the potential equity in the house, so that when the house is eventually sold in 10 or 15 years, the bank get first call on half the value of the house.

Now the bank must be able to turn into money the potential equity, which it is now holding until the house is sold. So the bank will have to get someone to lend it money against the collateral, which is the future equity in the house. Who might that be?

This is where the ECB comes in. The central bank has to lend to the Irish banks against the collateral, which is the future wealth in the Irish housing market. This can be achieved by negotiation and this is where the ‘Good Room’ mentality described in my new book has to change. We have to front up and tell the ECB that large parts of the Irish middle-class are bust and if the ECB and the Germans want a success in Ireland, the bankruptcy of the middle-class has to be addressed with an imaginative and workable debt bargain.

We therefore have to define the world in Ireland to the foreigners as it is, not as we would like it to be or they would like to hear. To do this we have to get out of the ‘Good Room’ — a place where pretence triumphs over reality.

This is the most important challenge facing the country. Let’s roll up our sleeves and start talking straight.

David McWilliams hosts the world’s only economic and comedy festival this weekend in Kilkenny — www.kilkenomics.com. His new book, ‘The Good Room‘, is out now


  1. Kevin Lyda

    If the gov’t can give money to banks directly, why not give it indirectly?

    Offer a scheme where the gov’t will pay down the principal of a residential mortgage to it’s current market value. Every sale of the house over that value (initially) or the previous sale value, the gov’t gets some percentage of the difference (say 75%) until it has recouped its subsidy.

    So, if the mortgage is €200k, a house is worth €100k, the gov’t pays €100k to the bank. When the owner sells the house 10 years later for €140k, they pay €30k for the subsidy (plus any taxes). The next owner sells it for €220k 10 years on and they pay €60k for the subsidy. In the final sale get back the remaining €10k.

    It’s a tax on profits which might not make property flippers and investors happy, but is fine for most residential owners. In addition, something could be worked in such that capital improvements could reduce the clawback amount. If you put in a more efficient heating system or if you put in insulation or if you add an extension to create an extra bedroom, then maybe that expense is deducted from the clawback.

    This way people will be sending less money to banks, people can sell their homes to take jobs in other places (hopefully within Ireland) and there’s an incentive to increase housing quality.

    And speaking of incentives, earmark the money from the clawback for one-off projects. Yes, it could just be sent right back to the ECB, but instead why not put that money towards major infrastructure projects that would help build the economy? Put in real broadband nationwide. Build decent local public transport in Cork, Mullingar/Athlone and Limerick. Invest in renewable energy generation projects.

  2. Grey Fox

    David,
    They have not made any moves towards helping the struggling homeowners, as a matter of fact they are hindering them in the worse way, and as you can see from the last article ad my posts we the people have run out of patience and money, now we will make them pay attention in their arena, the Courts!!! nobody is helping the struggling homeowners so we MUST help ourselves!!

  3. Eireannach

    DMcW says:

    “…many of the people who took out huge mortgages did so not because they were being reckless but because they were doing what they thought was the responsible thing at the time”.

    Everyone in mortgage arrears I have ever spoken to believes they were not one of the reckless ones.

    So are there any reckless ones?

    If not, why doesn’t DMcW say “none of the people….”

    If there are reckless ones among the many in trouble, who’s lying? Because they all say ‘I wasn’t reckless’ and ‘I didn’t party’.

  4. Kevin Lyda

    Yes, let’s solve economic problems by sitting in moral judgement of one another.

    Or, we can consider the fact that people paying loads of money each month to banks that refuse to lend means that money is not going into the economy in any meaningful sense. For all intents and purposes every person paying off an underwater mortgage is setting money on fire – which on the current scale is hurting all of us.

    We should do things to stop that.

    Or we can wag our fingers and say they were reckless and that they partied. It won’t fix our economy, but we can feel smug and superior.

    • Eireannach

      If they are buring money by paying their mortgages, then why do they pay the mortgage?

      Because they want to hold onto their underwater houses, even if it drowns them.

      Why can’t they let go of the houses. Answer that! Answer it!!! What entitles them to keep the house!!!

      • Kevin Lyda

        Because they can’t sell the house. If you owe €200k and you can only sell it for €100k, you can only sell the house if you have €100k to pay the difference.

        So your choices are:

        a) keep paying.
        b) declare bankruptcy.

        For people who can’t leave the country, b) isn’t an option unless a) is impossible (loss or reduction of wages).

        • Eireannach

          When liabilities exceed assets one is, by definition, bankrupt.

          If such a person were a business, they’d be wound up.

          The Personal Insolvency Law will allow people to declare themselves bankrupt soon.

          Of course, they could always live on (did I say live on? I meant plod on) in denial or hope that DMcW waves his magic wand and allows nobody to fail.

          • whatamess

            “nobody to fail” ..i dont think DMW meant that ??

            i have an accountant friend who is CFO of a company turning £20 million year but a shitty margin on turnover and making a long story short,the company is in trouble ( as are so many )….
            this buddy of mine ,a fairly ‘high level’,spends his time on the telephone these days speaking with creditors saying ( ad nauseum ) ” we have to share in the pain ” in an effort to restructure debts…so that grey area between creditor and debtor is where it’s all at now…diggin’ your heels in and hackles up at the mere suggestion that the sensible people who doesn’t deserve to share the pain with the not so sensible,simply won’t work ….we’ve gone beyond the point of no return…

            my point is that without substantial debt writedown( be it personal or corporate )we won’t be able to “restart”…simple as really.. and without a restart,we ALL loose ,so maybe when facing that reality ,one ought to at least consider taking that bitter pill ( “take one for the team” )and ‘forgive’ those “profligate” entities , so we can ALL together push on and make progress??

          • Eireannach

            Whatamess,

            You mention sharing the write-down of debt.

            Well, what’s the ultimate write-down?

            Bankruptcy. It’s the fact that people who owe €400K on a €200K house simply won’t tolerate the notion of filing for personal bankruptcy under the new personal insolvency laws, that is holding everything back and not allowing the current to get a fresh start.

            The freshest start is from 0. All this debt-for-equity business is just clinging onto sunk assets, just because people have developed a frankly babyish attachment to “their homes”, the way a child won’t let go of a rattle.

          • Harper66

            Have you actually read the personal insolvency bill?
            Because the manner in which you talk about it on here leads to conclude you havent.

    • Eireannach

      Apparently you didn’t party Kevin.

      How f**king predictable of you to say that!

      • Kevin Lyda

        I didn’t say any such thing. Are you OK? You seem a bit excitable.

        Did I spend a fair bit of money during the boom (and since for that matter)? Sure. I’m not big on drink or partying, but lots of good dinners, holidays and toys were had. And I own a rental property that is underwater – and for which I do not think any scheme oriented at residential property should bail out.

        If you have an investment property (like I do), you’re on your own.

        But for people’s residences – the places they live in – the current state of affairs has to change. It’s harming the overall economy, not just the people directly involved.

        Moralising and judging about this is hurting our economy. And apparently making you very excited. It’s not healthy.

        • Eireannach

          I’m starting ‘Game of Thones Tours.com’ at the moment to visit film locations of Game of Thrones in Counties Antrim and Down.

          It’s big business, day tours. I’m not excited about mortgages, I don’t have one and I’m thinking about other things.

          But if you screw up, you screw up. In every other Western country, you file for bankruptcy. That’s how it works, you start again, life goes on.

          We’ll have a Personal Insolvency Law soon which will allow people to declare themselves bankrupt, as companies currently do.

          Let that be the end of the matter. Start again is the way to go, not hunker down in your underwater mortage praying to the DMcW Gods to part the Sea of Red Ink.

    • paddythepig

      More shopping won’t fix our economy either.

  5. molly

    David what I want to know is quite simple ,when is Ireland or when is the Irish government going to run out of money.

    • Joe R

      At the end of the bailout, when all that troika money is used up. Is that in 2013 sometime?

      Government interest payments on the national debt will be a lot higher, the cost of running the country will not have reduced enough at that time and the Government will have to go back to the bond markets. The bond markets will look at the actual national accounts, not the Inda spin, and impose an impossible rate of interest on Ireland like before and it will be a choice of a second bailout or default ( like Greece )…so if Germany is still keeping the Euro show on the road it will OK a bailout. Which the spineless well paid politicans here will grab with both hands…

      • molly

        Another point I can’t find anybody who thinks this government is doing a good job,with that in mind hiw is fine gale ridding high in the polls

    • paddythepig

      They will never run out of money. They will just have less money than they did before, so all they need to do is make less money go further.

      • molly

        Hi do you think this government is open and honest with its people,I don’t think so.
        Remember what they said about being open and honest ,a new way of doing things and all the cock and bull we the people are being fed,this government use the fear factor to spin there own agendas .

      • Joe R

        Argentina, Paddy! Argentina…

        How do you make money go further Paddy if you are Government do you cut into smaller bits or something?…

        It will be a second bailout and more internal devaluation and financial hood-winkery, methinks.

    • Joe R

      McWilliams as a sensor and hypocrite.

      http://dublinopinion.com/2011/04/21/david-mcwilliams-condensed-bollocks-with-a-shamrock-on-top/#comment-79869

      See comments 16 — 18 in particular for an account of how he has recently engaged in censorship here on his own site, in relation to the Google article.

      Specifically he engaged in censorship in relation to post question google and others tax avoidance.

      • whatamess

        censoring, maybe a little yea ,but hypocrite …for me that’s quite strong.. and in fairness censoring ( for want of a word a little less provocative ) is probably a ‘real world’ necessary exercise for someone running a site like this i imagine no ??…Otherwise one’s site could be bombarded by DMW /critics/haters.I as a reader here REALLY don’t want to ‘sift’ thro’ abusive messages aimed in DMW’s direction and i’m sure DMW duzn’t want that experience for me either ( as he a ‘customer’ centric kinda guy )and with the number of comments posted,maybe the person monitoring these comments ( maybe not DMW imself )has to make ‘real time’ judgements that retrospectively with the benefit of 20/20 hindsight,he or she may have been happy to include,or not ?

        The “he tosses his supposed values unquestioning out the window” from your link is for me waaay tooo strong and in fairness, i’ve have read valued contributors here asking where DMW stands on fractional reserve banking and a few other MEATY topics, so to say that he’s a heavily censoring,is just a stretch for me.

        AND i would hope that if i was married to a “law type”,that she would guide me as best she could! …maybe very well “on the record” and a no brainer ??It’s his wife and he is perfectly right to protect himself…he is a high value target now isn’t he..

        and “Google and tax avoidance”…It’s a tax efficiency matter more so and quite complex ,so maybe let the Revenue people do their jobs on that score and if I were DMW, i would certainly take a phonecall from Google and if Google wanted to engage me professionally,HAPPY DAYS i say and f**k the begrudgers ( i hasten to add that i don’t think you are Joe R …perish the thought )

        All of that being said, i hope to hear DMW enlighten us asto his views on mortgage securitization and fractional reserve system of banking being banned in favout of 100% reserve banking. That’ll be interesting..

        • bonbon

          DMcW has quoted Galbraith at length a few blogs ago. That should be clear enough.

          On tax and global firms being an obvious glaring looting operation, here is the alternative to servitude :

          http://laroucheirishbrigade.wordpress.com/ireland-an-economic-revival/

          The physical economy, simply not discussed at tech-talks afaik, is the way to go instead of trying to revive the bubble economy :

          http://www.europarl.europa.eu/document/activities/cont/201209/20120919ATT51779/20120919ATT51779EN.pdf

          • whatamess

            “Do Not Attemt to revive the Cadaver” –i like it !

            “…are now on the verge of forming an alliance based on economic cooperation and development, the very scale of which will transform the world and render the empire a historical curiosity.”…..
            That’s a bold statement and wishful thinking maybe ?

            And this alliance won’t bond cohesively ..not without a ‘fuse’ ( like maybe a war ) anyway …and yes yes that “can be arranged” and if Obama wins today,within the first 6 months of 2014..all hell will break loose..that’s almost fu**ing certain ..will that be the fuse????

            “..development of an international deep-water trans-shipment port coupled with a massive expansion of our deep-ocean scientific and engineering capabilities would put us firmly on the right path.”
            — It’s on a par with us thinking of building a “millenium falcon”…i don’t mean to sound sarcastic but These HUGE projects… i just don’t see ‘em happening

            it sounds fantastic Bonbon,really,but it’s more fantastical considering the leadership needed to bring people together and pull it off…it’s a quantum leap in behaviour modification for leaders firstly to efficiently plan such projects and secondly then get everyone to ‘oar in’ with enthusiasm…Hey,it would be magnificent to get 1 or 2 % slice of that cake…people back to work in huge numbers and hey presto,we’re back in action..or a least the graph would head north for a sustained period of time..could feed from these projects for decades…I wonder if our secondary school teacher politicians could have such vision to create such ‘alliances’ in the event of such things happening— i think not…they’re just not at the races even for Mickey Mouse stuff..

          • bonbon

            Just let kids and teenagers in secondary school one minute of access to such ideas and watch out!

            We are of a different time scale than any other biospheric organism. Our future is huge and fast and there is no place there for Empire. The cadaver is the dinosaurs before the KT boundary when warm-blooded mammals took over. This kind of change is not kinetic, the mammals did not defeat the dinos who simply outlived an epoch.

            This time around Obama would try thermonuclear weapons to stop change. That must not be allowed to happen. Up to now, war was the preferred oligarch method to stop profound change. No more.

            The Shannon Deep Harbour is the way to go as these huge projects begin.

  6. molly

    Can Ireland run out money or do we just keep borrowing money with bonds and to me it seems like Ireland will do just that.
    It’s like we have one sector that are like the 3 wise monkeys,they want to opt out of all this because there voice is not heard.
    The other sector wants the government to borrow like mad and let the mad tea party start all over again.
    The banks are being told by the government to sort out the mortgage mess on one hand and on the other hand there just is simply not enough money to bail all these people out.
    Makes me think that the government who played a major part in all this madness in the first place ,wants to give the banks a fraction of what they need to sort out the mess and then the government wants to hide from the problem.
    Well you can’t run and you can’t hide and one size does not fit all.

  7. gizzy

    The Banking system is set up to deal with a few who will not pay not with many who cannot pay. So the Banks and their owners need to think differently from normal times. This is war time banking forget the normal rules.

    However for their main advisors particularly legal ones litigation is the only game in town, there is no conveyancing or tax planning and few can afford seperation so no work there. So they will advise the Banks on the slow torturous route case by case. And the same advisors have the ear of the government. If you want to see vested interests go to the law library.

  8. Tony Brogan

    Just came in from Kilkenomics and the event”Are we turning the courner in 2013.

    The introduction in the handout says in part ‘Some believe we are now beginning to turn the corner…”…..”or are the optimists just dreaming”…

    First off was a quickly reherst sketch that was a lot of fun.
    Eamon (DMW)Andrews hosted this is your life. The life of Ireland. Very funny and to the point too with Colm O’Regen and Karl Spain masquerading as ‘Ireland’.

    David left for an interview and Colm O’Regen took over as MC to the four panelists.
    PPinchas Laundau, Bill Black, Cormac Lucey, Damien Kilberd.

    The panlest concensus was that currently there is no sign of an improvement. That Ireland is ‘off the radar’ as it is acting as a good little boy.
    The bank bailout was actually to save the German banks as there wereowed a lot of money if the Irish banks went out of business. Ireland we get no thanks for being the patsy.
    They agreed that Ireland must be assertive. If you do not look after yourself no one else will was stated.

    It was emphasized that Ireland must revoke the debts incurred by the state to bail the bank. That included the debts paid to the ECB etc., Any other debt should be handled as a creditor should and be negotiated.

    Irland must stand alone and get a new currency. Not assume or peg to another but stand defiant and proud.

    Ireland had to leave the euro. Sooner ther better was one comment. Do it before it leaves ireland. Europe is in worse shape than the US.

    The moderator asked if there was any in the audience disagreed with this position.
    One hand went up with a question. Would this not drive away foreign investment. The answer was a resounding no as all would benefit from a currency devaluation that initially would happen.

    The one other glimmer of hope was that thousands of people were starting small businesses without bank loans and starting to be successful.

    So the message was, have pride, have confidence, and tell the world this is the way it is and going to be.

    I was heartened as I had not expected this.

    • Tony Brogan

      Excuse my grammar and spelling . Sometimes I am appalled at my own errors. People here are very tolerant in that regard. Thanks

  9. Tony Brogan

    At the risk of offending here I go.

    I am tired of the wailing and knashing of teeth. We know things are tough all over and it “wasn’t my fault”. Some people get bad enough in themselves and commit suicide. Too bad for their family.
    On one side of my family there is a depressive streak. Two boys, second cousins of mine did it. Their sister had a child who did it. 3 in one family. It was not poverty.
    My cousin was a brilliant girl. Had an oxford degree and married a professor. Had two lovely children.
    Around 60 years of age fell of or was knocked off her bycycle and hit her head. Serious concussion. Two year later she did it. She had not been able to function as well after the accident. Not a poverty problem.

    All who bought a house made a contract. They should honour the contract if possible. So what if the mortgage is under water.If a person makes payments for 25 years regardless then they own the house and make no more payments. A 10% down payment grows in that time to 100% paid off
    To demonstrate DP=10,000 in 25 years the equity is 100,000 assuming no change in property value.What other investment do you know that offers such a return. It is over 12% PA compound interest return on the down payment.

    We hit hard times and the property is worth one half what was paid for it 25 years earlier. 10,000 is now only 50,000. this still has a growth rate of over 8% per annum. So why complain? House mortgage amounts may be more than the house value but it is still an ok deal. Still no more payments after 25 years.

    What about the people who bought before the boom. They have been able to reduce the interest on the mortgage since then and pay it off in less than 25 years.

    People wailing about tracker mortgages. What for. My daughter and son in law bought a house and in my opinion paid too much. I am not them so I said nothing. They liked it and the tracker mortgage. The interest on the mortgage went below 2% and they kept the payments going and so pay of in excess of 1000 a month off the principle.

    I have been there paying a mortgage rate of 23% a year. Payments of 4000 a month on a 200,000 mortgage. I got caught and it was NOT my fault.
    I bought a property in a hot market. I had some cash and two other properties. I financed 200000 thinking I would sell the other two houses in the next three months. I had lots of equity.

    Well there was a legal problem and I will spare the details. Net result was I could not sell the other two houses for 5 months.
    Housing market came to a halt. Overnight it stopped. In that 5 months prices fell 35-40% My equity evaporated, I was left with the 200,000 mortgage and had to fire sale the other houses to get any money to make payments.I went from Clear title scenario to bust.
    Oh yes I had three babes (so my wife could not and was not expected to work) in arms less than 2 years old. I survived but I had to work like a dog, 16 hours a day. 8 am – midnight very often. I was so stressed I worked in the garden at 5 am.

    In the meantime my realestate business tanked and 5000 a month was the shortfall. I needed 10,000 a month before I bought groceries.I made deals on debt and talked to all the creditors. My books were impeccably done by an accountant. gave credibility .

    I got debt write downs from creditors and others I foisted on them.I lost the business to a firesale. Over 250,000 net worth lost over 5 years there.
    One I owed 42,000. They accepted 18,000 in cash. I told them it was all I had. they could take it in total payment or sue me. I did an orderly settlement of debt with 18 other creditors at 65% on the balance outstanding. I liquidated, slashed and burned and aged 10 years in two.

    So I am not responsible for others on a coercive basis. That is my taxes go to pay those given relief.
    I will help where I can but all people must make their own deal.

    Take RR6 advice and do something for yourself and get advice and help from those who can assist.Face the devil as the devil does not like daylight.

    Sometimes life is not a bed of roses.

    The boom was caused by too much debt based credit issued by the central bank which was multiplied 10-20 times by the commercial banks.

    then credit was yanked and the whole process reversed. This was 1981. Sounds familiar does it not.

    So I repeat
    Close the central bank
    Ban fractional reserve banking
    dump the EURO
    Creat a new Irish currency.
    Demand Ireland’s 6 tonnes of gold be repatriated from London
    Implement a silver coin currency along side the fiat paper to give people a choice and to strengthen and stablilize the currency.Go to http://www.tonybrogan.com for a description why and a methodology (where it says Canada sustitute Ireland)

    • imithe

      What were you thinking buying that house Tony. You should have spent your deposit on Gold, or better still silver!

      *only winding you up*

      • Tony Brogan

        I was more ignorant in those days and so busy earning a living I had no time to make any money.
        I was aware in the 1970′s when the gold standard was released that gold would leapt upward but I, like many today , had no money to do anything and the idea passed from my mind. The pressure of living , one might say.

        Talking about the ‘house’. There is a residue of positive thoughts and memories.

        It was on 5 acres in the country. I developed the irrigation system, bought an old tractor and basic impliments, 14 ewes and a ram, and 100 pullets.
        I sold free range eggs and grass fed lamb of the finest quality,
        I reseeded pasture, and developed a quarter acre garden.
        I met the neighbours and joined in to help harvesting and any other chores. The neighbour brought his sheep dogs and then we proceeded to pare and treat the sheeps feet for any infestions.Same with the sheering.
        I was up at every lambing no matter the hour and acted as midwife. I assisted births and saved breached lambs. I lasted 3 years before I had to sell out and start again financially. I was 44.
        All the while I worked a 10-12 hour day elsewhere.
        I loved every minute and the neighbourliness of the people around.

        I was also up at 5 am hoeing the garden as I tried to figure a way out of the mess I was in. Always anxious, uptight, tense. The exercise and the country life saved me.

        I will have a few acres again before I get too old to do the work. It must happen soon or I will miss out on “life”. I still have a dream to attain.

  10. Adam Byrne

    As usual I don’t get a notification when the new article comes through so I have to SUBSCRIBE

    In the style of the malign youth – FFS. Rubbish, how difficult is it to configure this sort of this?

    Talking of configuration, are we on for Saturday night David? Looking forward to seeing you, Tony, Colin and Philip.

    • Tony Brogan

      Any one else out there.
      Staying at the Castle Lodge bnb, Castle rd.
      Contact if I am in. I do not carry a phone.
      tony@tonybrogan.com
      PH 014429035 (leave a message, computer, Skype tbrogan2002)

      I’ll be at tonight
      6-7.15 Is the euro crisis over
      7.30-8.45 Which countries are now thriving
      9.15-10.30 What are the defining issues for 2013
      10.45 onward at Langtons bar.

      • Hi Tony

        Can you give us a ‘ brief summary’ of each of the above events please?

        • Tony Brogan

          Well I will try john but thing get to a blur and I come away with impressions and not necessarily with quotes.

          is the euro crisis over.
          Short answer yes and no.
          It was ventured it was doomed to fail as structurally it can’t succeed without political union and common fiscal policy. That is abandnment of the nation state and obtain a untitary union.
          Las tyear the similar panel had expected the demise of the euro within 12 months.
          Now it was agreed that it will still exist in one for or another 3 years from now.
          whether the euo is good for Ireland is another matter. Strong opinion ventured that Ireland roast the banksters , repudiate debt and have its own currency to enable a return to finaancial sovereignty.
          That is it was recommended to inprove Irelands uncompetitive position through devaluation,

        • Tony Brogan

          Which countries are now thriving

          This is more vague for me as there was a lot of general discussion.

          A lot of discussion on china and India. Mention of Brzil. Quotes on emerging markets.Tome it was indistinct.
          Dimity Orlav gave a good perspective on Russia. Esentially after the fall of the wall and economic disruption the Mafia took over. putin and the Gov seeing a succesful business model decided to encompas the mafia within gov .
          It makes for a stable regime with competion, controls the loss of life and some are spectacularly rich but the people have benefited and basicly like what they have????

          Still it seems that Ireland has the wealth of the infrastructure, educated citizens, youthful population, innovation and expertise. It needs to be harnessed and the banks done in etc.

          • Thanks Tony

            By the way my guess is that your star sign has a lot of virgo around you.

          • Tony Brogan

            To John Allen
            Saggitarious, gemini moon, Libra rising.
            4am, british standard time 25th Nov 123 overdale , ashtead, surrey, england.
            There now you can do a chart and tell me all about my self!!!!

            Best
            Tony

  11. SMOKEY

    I cant wait to read Davids new book, his publishing co are smart, always released before Xmas so I get something under the tree too.
    Every so often I go back and read about him on his polished up, used bike and his dad following him. Its a Norman Rockwell moment in story form, always warms my savage heart.
    I like the debt for equity idea, its a win win for all, even those who stand to inherit, i.e. children etc.
    BUT, it applies logic to where there is none.
    Its TOO good of a plan, TOO smart of an idea, TOO likely to end well, so for that reason the banks will say, Im out.

  12. Banking is only about TIME not money .

  13. gizzy

    I think some people are missing a the big picture that is represented in the article and previous articles. The economy needs to deal with the mortgage time bomb. Forget prsonal biases and look at the problem holistically.
    The economy cannot move on with Banks who are laden down with bad debts that erodes their capital on a daily basis. ( they have to fund non performing loans and the cost of that funding is met from their own capital reserves.)They have to use up now huge amopunt of capital in funding collection,litigation and reposession processes. This use of capital and staff will stop them functioning effectively as real Banks and returning to sustained profitability.

    Banks can only clear loans in four ways Repayment. Now not possible in many cases. Refinance with another Bank now not available. Realise security. In most cases now insfiicient to clear even half the liablility and in a small market thia action impacts all assets the Banks hold as security driving their value down and impacting loan to value ratios and capial costs. The last one and it is used in banking all the time paticularly in the corporate world write down are write off. The aim is to realistically match your liability to the current or projectd value and repayment capacity of the borrowing entity or asset. It has being standard practice for years but has not being raised as a moral hazard unlike mortgages.

    The Government needs to sort it as they own a lot of the offending loans. Can they keep capitalising non functioning Banks while having to deal with the social and real cost of rehousing a large chunk of the population. I do not think so.

    Speaking as an ex career Banker. There is so much wrong that to spend time debating the whos or whys of what happened are irrevelant. I will as a trained lender apportion blame equally between lender and borrower. I was trained to lend responsibly. Some here will favour the creditor and some the debtor. It does not matter. From a functioning Banking and Economic perspective as David says it has o be sorted.

    • Joe R

      There are more than simple monetary issues at stake with resolving this property crisis particularly if you dont want a return down the line like urban planning, the county council system, a medieval land law system, that safe as bricks mentality, and what to do with zombie hotels and ghost estates and other property excesses.

      Mortgages are money which involves a value system and can be changed. I have heard little talk about the actual physical elements and preventative elements.

  14. Beaver

    The first thing that should be done is make all new mortgages non-recourse to make the banks think hard before lending.
    What DMcW is sugesting on existing mortgages however is just another gamble on property values rising (the householders gamble becomes the banks/states gamble) which is exactly what got us in the hole we are already in. The last thing this state needs is the cost of taking on part shareholdings in 200,000 houses and hoping for rising values. The money to pay for this scheme is costing us at least 5% a year and I severely doubt irish hosuse prices will rise by 5% a year for the next 15 years. I suggest that where people have more mortgage than they can afford to pay, that they return the house to the bank and pay market rent to live in it. The bank then sells it as occupied and when the overall loss becomes clear the loss is shared 50:50 by the former owner and the bank. Both should have skin in the game. The borrower gets a partial debt write down, the bank gets a more solvent client and both get a painful lesson in not succuming to trends or keeping up with the Joneses.

    • Harper66

      “The first thing that should be done is make all new mortgages non-recourse to make the banks think hard before lending”

      Fully agree.A realistic and achievable aim that would be of benefit to future borrowers.

      Why is this not being spoken of more?

      • GF

        Agree 100%

        Why is no one talking about non-recourse mortgages?

        If a law was passed ensuring that all future mortgages on principle private residences were non-recourse I am pretty confident we would never have this problem (to the same extent) again.

        Why is FG/Lab not doing this? Why is no one pushing for it harder or in the media? Does Joe Public even understand the concept?

        The only reason I can think of is that this would drive down house prices (as the banks would be considerably more cautious in their multiplications of salaries) and since FG/Lab, and Nama, and the Banks are still in a little dream world (where they hope if they wait long enough prices will go back up and everything will thus be ok) they do not want to implement a robust change that might hinder their dream.

        It’s such a simple solution to protect us in the future? Why? Why? Why?

        I am lost by this f**cking country — I think I am done with it, all passion and drive gone.

  15. StephenKenny

    So let’s take this one step on, and consider the position once the mortgages have been written down, written off, or the liability removed from the mortgagee in one way or another.

    OK, so initially, people wil mortgages will be much happier, and people who rented because they didn’t want to take part in the crazy casino wil feel like a right bunch of charlies.
    But then what?

    Economists make statements like ‘the economy will start to grow’. According the head of US Federal Reserve Bank, and the Head of the Bank of England, this will happen because people’s investments, including property, will increase in value and make them feel wealthier, so they’ll be keener to go out and borrow and spend. House prices will start to rise, and, just as Wall St and London have done with the financial ‘issues’ of a few years ago, we’ll start to airbrush them out of history.

    OK, but then what. What are we going to do with the extra money, and increased property investment equity, that we now have?

    Will the mindset of the banks have changed? Will the banks be prepared to lend to the types of businesses that they’ve never been prepared to lend to, to date? What business sectors will grow?

    What will the policies, and attitudes, of the politicians be? My guess is that they will claim to have solved the problems, and people will vote for them in droves. But what will they do? Will they do anything different to the things they’ve been doing for the past 20 years?

    These economic problems are symptoms, they are not the disease. 4 and 5 years ago, some people were making comments like ‘you don’t cure cancer by giving vitamin injections to make them feel better today’. I’ve a feeling that it may even have been something David said.

    We need to balance these sorts of policies with ensuring that we put in place a system that enables the real economy to grow properly. Ireland, Greece, and Spain have been prozac economies for 10-15 years, the US & UK for up to 40 years. We need to get off the ‘easy fix’ drugs, and start the hard work of getting fit, sorting out our diets, and re integrating in to society.

    • Eireannach

      +1

      The US, UK, Ireland, etc. have been ‘FIRE’ economies – finance, insurance and real estate – each of which is an ‘extractive’ approach of creaming off rents, tithes, rates, premiums, interest rates, etc. from the productive economy.

      But if too many people work in extractive sectors, rather than productive sectors, the parasite kills the host.

      You become your job. If you work in the FIRE economy, you become a parasite. You become very good and very clever at parastitically creaming off the productive economy.

      • Joe R

        Spain had a housing bubble and bust in in the early-to-mid nineties, they had their own currency then, they formed a NAMA-esque bad bank, devalued and moved on in time to have another property bust with 10 years again.

        I’m noy saying its good thing but it is the normal cycle and nature of certain economies or cultures.

        The big thing in the past was that there were re-set buttons in the form of devaluation hence 200 pestas to the punt. With this missing these economies could go the way of Argentina.

  16. Tony Brogan

    “In the US in the 1930s they introduced a scheme whereby the bank and the individual did a deal. The person’s mortgage was reduced and the bank was compensated by being offered half of the potential equity in the house, so that when the house is eventually sold in 10 or 15 years, the bank get first call on half the value of the house.”

    The bank already has 50% of the value of the house. When it forcloses it gets to sell and recoup cash immediately and does not have the wait of 15-20 year of uncertainty.
    The homeowner when foreclosed on is out and free of responsibility except if bankrupt. That is where the law needs to change. A bankrupt should be free of credit restrictions after a short while as in Canada. If it is a recuring event the periods of credit restriction are extended. Just like a repeat criminal offender.
    First offence is a slap on the wrist, the next is a good slippering of the backside and anything after that is a banished to your room and don’t come out until I tell you that you can!

  17. wills

    You want to know more about what the insiders running the mafia banking system in Ireland really think – if u do check this Oreachtas committee on banking segement:

    http://www.youtube.com/watch?v=k3YkCWJIMXE&feature=youtu.be

    • gizzy

      Wills worse than evasive the guy had no handle on the biggest issue facing the bank and looked like a lost sheep. Stephen Donnelly knows more about banking than the CEO of a Pillar Bank. Awful performance by a CEO of a small Bank.

  18. Banking is about TIME

    There is the ……time before ……time now ….and …next time .

    We can …laugh….cry …..and despair .

    Time will not stop .

    Where will you be ?

  19. Direland

    As mortgages are the biggest debt people generally have and thier house is the biggest asset , they have a disproportionate effect on how people spend the rest of thier money ( if they have any left over after mortgage payments). My point is that it is not JUST a problem about negative equity and mortgage arrears – it’s as much about how to get the economy moving again in the right direction and reduce unemployment and emigration.They are all interlinked.
    I do not expect any of the Banks to make any positive moves towards resolving the negative equity/mortage arrears problem if they can avoid it – they’ve already gotten massive amounts of money from the Taxpayers and they are dealing with individuals on a “case by case” basis ie they can bully the Customer as the Customers are not organised as a Group.
    With the Government continuing to take billions out of the real economy each budget , variable mortgage borrowers having to pay more to the Banks and people too afraid to spend money – it’s hardly surprising the economy is shrinking each week.But that’s what the Troika wanted – for the Banks to “de-leverage” ie reduce their loan book by not lending any more and pressurising Customers to pay back money currently owed as fast as possible.This madness is well known to the Government , Mandarins and Troika and our Banks – they just don’t care – they are on big bucks with great perks – why should they ??? You and I are the “little people” who pay taxes …….

  20. Joe R

    Enjoy!!!

    Brave aren’t you there hiding behind a computer screen?

    C’mon lets be having you!

  21. Joe R

    Any old comment will do!!!

  22. David,

    Once again I have issues with this article from the point of view of how the economy actually operates.

    You insist that ‘If he isn’t spending, then someone else isn’t earning and if that someone else isn’t earning, he in turn isn’t spending…’ The fact that people save during a recession seems to be the only explanation offered by economics for why there seems to be less money during a recession.

    However I’ve communicated to you through various channels before that the main reason why there’s less money during a recession is because once a loan is repaid to a bank the money no longer exists. This is an important point because and it’s explained at the link below.

    http://sensiblemoney.ie/data/documents/How-Banks-Create-and-Destroy-Money.pdf

    The other issue I have with the article is the apparent surprise of the extent of mortgage arrears. I’d imagine you’re aware that money comes from bank loans?

    As such what’s in circulation is the principal, or partial principal of each loan, plus the little bit of cash in the economy. From this, the economy must repay the principal plus interest, which is impossible. This is why mortgages arrears is such a problem.

    Have you considered that if banks were only allowed to lend existing money we could never get to the stage whereby we owe more than exists and this might be a better way to run the economy?

  23. bonbon

    Some straight talk from the U.K. :

    HALDANE INFORMS OCCUPY MOVEMENT ON BANK SEPARATION

    Nov. 3 (EIRNS)–The leading Bank of England (BOE) director and advocate of a Glass-Steagall reform came out in praise of the Occupy Movement, while informing it on the need for bank separation between investment and commercial banks. Speaking at a debate held by the Occupy Movement on Oct. 29 at Quaker House in Central London, BOE director Andrew Haldane said protesters were correct to focus on inequality as the chief reason for the 2008 economic crash.
    While not using the term “Glass-Steagall,” he did say the following after speaking about ring-fencing and other such schemes: “There are those who doubt whether a ring-fence is sufficient to achieve that cultural separation in banking — can two separate sub cultures really operate underneath a single roof? Time will tell. If it is not possible, then full separation would be the logical next step. Alternatively, banks themselves might of course voluntarily choose to divest and separate, as some are already doing.”
    According to the {Guardian}, Haldane said Occupy acted as a lever on policymakers and that movement was right to focus on inequality as the chief reason for the 2008 crash, following studies that showed the accumulation of huge wealth funded by debt was directly responsible for the domino-like collapse of the banking sector in 2008. Haldane also said regulations limiting credit use would help prevent the accumulation of huge property and financial wealth at the expense of other sectors of the economy by draining funds from other industries, adding to the negative impact that unregulated banks had on the economy.
    Haldane said Occupy’s voice had been “loud and persuasive” and that “policymakers have listened and are acting in ways which will close those fault-lines” with a “reformation of finance that Occupy has helped stir.”
    “The asset-rich, in particular the owner occupying rich, became a lot richer. Meanwhile, the asset-less and indebted fell further behind. In other words, the pre-crisis asset price bubble acted like a regressive tax,” he said.

    • StephenKenny

      If the UK produced, and enforced, a reasonable set of financial services regulations, most of the large foreign banks financial services companies would leave. They’re only there because the regulation is so lax, or non-existant, on large financial organisations.

      The next realisation, in most countries, is going to be that these asset prices are a tax by the old, on the young. Everything is going to be about inheritance.

      • bonbon

        Reasonable means GS. And those “services” have nowhere to go. I suspect Abu Dhabi was being lined up for that, but…
        The British Empire will cease to exist, dissolve, if and when the UK decides it cannot carry it any longer. In fact the entire planet cannot carry this global tax any longer.
        Remember all the major crises recently started in London – it does not matter if “foreign” firms were involved- there is no “foreign” in a global empire. Wall Street and London are certainly not “foreigners” to each other.

        • StephenKenny

          Well, GS and a number of other things, yes. With no benefit to be found in London, or New York, the companies would go home.

          Thankyou for the reminder with regards London’s place in disasters, it’s something I bang on about too.

          But you are not correct on your final point – when a crisis happens to a non-UK bank in the UK, it is the taxpayers of the country of origin that picks up tab. For the UK, it’s all upside.

          • bonbon

            Things are not quite “upside” in London :

            Nov. 1, 2012 (EIRNS)–The Bundestag Finance Committee will hold a hearing on “the Libor cases and further wrong developments in the financial sector” on Nov. 28. Among others, Anshu Jain, CEO of Deutsche Bank, has been called to testify. Jain ran Deutsche’s London derivatives-based and highly-leveraged investment banking operations.
            For the last seven years Deutsche Bank in London has been the world leader in currency trading and its related derivatives, the market that Bernanke and Geithner at the New York Fed saved from oblivion, starting already in late 2007, when they began massive currency swaps with the Bank of England and European Central Bank.
            Former Scotland Yard detective and then bank supervisory investigator Roswan Bosworth-Davies reports that new actions by a High Court Judge could “finally drive the sharpened stake through Barclays’ cold dark heart.”

            Half of the Bundestag Committee was provided with this report :

            Libor and the Pathology of a Dead System: Do Not Attempt to Revive the Cadaver!
            http://www.europarl.europa.eu/document/activities/cont/201209/20120919ATT51779/20120919ATT51779EN.pdf

  24. BrummieBoy

    This looks ‘interesting’:

    “Put Yourself on the Silver Standard.
    Get the World’s only True Silver Debit Card.”

    http://www.europacbank.com/index.php?page=silvercard

    Not available to US citizens worldwide. Probably not available to anyone for long once the implications of abandoning Fiat money to buy petrol and groceries sinks in with Thee Illooominati, etc.

    I don’t know, p2p lending, silver-backed debit cards: how can The Banks rebuild when this kind of carry-on is allowed?

    Lol!

    • Tony Brogan

      Electronic debit card banking with silver or gold as money.
      easy to do and accountable to a fraction of a gram.

    • cooldude

      Whats so funny about using commodity money in the modern way through a debit card. Seems a very logical way to conduct your affairs and stop your money from being constantly debased at the same time. If only such freedom of choice in the type of money was available this world would be a much better place and the power of the bankers would be greatly diminished. You stick with your rapidly debased paper and let other people decide what type of money they can freely choose. The only problem with that it gives people personal freedom and doesn’t fit in with your Stalinist five year plans that you and La Rouche would IMPOSE on all of us if you guys ever get your way. The thing you really dislike is the idea of people deciding freely among themselves what type of money they can use to protect the fruits of their labour. All statist systems, be they fascist or communist, insist on the individuals only using what the State deems to be money. It seems you Bonbon are such a statist and would like nothing better than to ban the freedom to use whatever people want as a medium of exchange. Thanks be to God I don’t live under your totalitarian bullshit and I hope I never will.

      • bonbon

        Seems you are replying to the wrong poster?

        Nothing is stopping you now from exercising total liberty for your property – go ahead and use what ever money you like in the true individual tradition.

        Of course there is no obligation on other true individual libertarians to honor your free choice of token. We would not want an international authority to enforce the rules of free choice as von Hayek demanded, now would we?

        • cooldude

          Point taken. Each to their own.

        • Tony Brogan

          I am not so sure that is what Hayek demanded. He was afraid that the right of freedom of choice in money and currency would be taken away and was looking for a way that this would not happen.

          IIt is difficult to mandate a freedom of choice. We have a similar problem in Canada with the Bill of rights. If it is not included in the bill does one still have it?

          Even protection written in to a constitution can be circumvented or ignored. It is a difficult problem to resolve.

          • bonbon

            We take it as self evident – the declaration of Independence. It is a question of principle, and principles cannot be touched, smelled, weighed, bought or sold, but they do actually run the universe. There are principles of economics, increasing productive powers of labor for instance, relative potential population density even more powerful. Dismiss these ar your peril – that’s what happened over thelast 35+ years.
            That is why positive law fails as intended – no scientific principle is involved, just the text it is written in. It is as if Beethoven’s 9th IS actually the notes on paper, as if the music should ooze in a spontaneous unknowable way because it is so complex. Sound familiar?

            As for von Hayek, he actually did call for an international agency to enforce the rules of free trade in that interview in 1983. Keynes was even more direct with exactly the same call – peas in a pod for Empire, two sides of the same coin. We the People reject that.

  25. Pat Flannery

    David:

    Debt-For-Equity Swaps between banks and individuals in the U.S.?

    You write: “In the US in the 1930s they introduced a scheme whereby the bank and the individual did a deal. The person’s mortgage was reduced and the bank was compensated by being offered half of the potential equity in the house, so that when the house is eventually sold in 10 or 15 years, the bank get first call on half the value of the house.”

    I never heard of such a U.S. “scheme” in the 1930s or any other time for that matter. Where did you pull that one from? Do you have any references to back it up? The only bank related debt-for-equity deals I ever heard of in the U.S. involved businesses, never private individuals.

    You better back this claim up or I will seriously begin to doubt your entire credibility and move on.

    • bonbon

      I was wondering about that too. See the IT report posted below on the Insolvency Bill which looks like a speculator bailout yet again…

    • bonbon

      And your post about mortgage securitization recently is correct. That and all derivatives themes seem to be avoided here. In other words the real problem is avoided – typically Irish.

      Is that bill about bailing out securities?

  26. Philip

    “Let’s roll up our sleeves and start talking straight” – hmmmm – who is that “US in Let’s” let’s lynch them, let’s revolt…wonder where the rabble rousers will be – making for the exit or watchinf the show….unfortunately, the paddies are like a bunch of wallflowers at a ceili dance…WE ARE ALL WAITING FOR SOMEONE TO SAVE US. We do not deserve to be a nation.

    A great contributer here (RR6 was it) in our midst has all so often mentioned the solution…he might even offer advice on same – maybe a part of this we site should be set up for it…get onto the bank and do a deal before the doo doo well and truly hits the fan for u and family. Accept the fact that there is no 11th hour cavalry, nothing….just you and the bank. If you choose to bury your head in the sand – well… Never mind people coming along saying they have a solution and we should od this and that…they won’t.

    Grow a set of gonads. It’s your life

    • Tony Brogan

      Welcome back from Kilkonomics Philip

      There was one major theme ,unannounced but permiating the thinking. There were a couple of exceptions.

      The theme throughout the conference was Keynes doctrine. no austority as it hurts too much. Expand the money supply and increase public spending.

      no realization that the central banks willingness to keep supplying credit, fueled all the booms in increasingly shorter intervals and greater velocity.
      No recognition that the bust to follow cannot be avoided but only delayed a little longer.

      Exceptions were Max Keiser and Vicas Nath.

      Still, the word is out that the whole show will be available electronically in a while. you will be able to wath all 30Plus events so there is a week of viewing ahead.

      The overiding message from the conference was.
      I f you want anything to change then action must be taken by the people. Demonstrations outside TD office the Dail. Letters must be written, petitions sent in and bodies on the street seen.
      it is the only way to shake up the politicians and moaning and whinging about it will do nothing. It is up to you to be counted.
      i think Phillip agrees as Do most who attended the festival.

      • Philip

        Fully agree. Time has come for people to start respecting their own life, nation and indeed money itself. We have over borrowed from the future meaning expectations so common of the middle class today need re-examining. Vikas Nath was on the ball.

        The education for me in Kilkenny was why we have castles and the role they play as protection as in Normans and as traps when Cromwell had you under siege. Money needs to be seen in the same light. Make cozy assumptions of it at your peril. I was also impressed by those who choose deliberately not to follow the herd and make their lives because they faced up to reality. People who make money by making a business, people who see this crisis as a means of getting
        resources cheap to help people in need. In these contrasting cases money in seen as a powerful tool and not something to trivialise as you become lost in consuming your goodies.

        No one can be indepentant for you.

        Good meeting ya

  27. bonbon

    THE PROPENSITY of the Irish political system to be captured by narrow vested interests rather than operating for the common good has been illustrated once more by the terms of the Personal Insolvency Bill which will allow people to write off debts of up to €3 million.

    The ostensible purpose of the Bill is to protect families in financial distress and ensure that they do not lose their homes. It seems, however, that our politicians are using this as a pretext to protect the interests of those who speculated in the buy-to-let property market.

    What other explanation can there be for the €3 million threshold when the average mortgage is in the region of €350,000? The thousands of ordinary families in distress don’t have debts of €3 million but they do need quick and decisive action to allow them to write down much smaller sums.

    While some politicians undoubtedly have big debts, the cynical explanation that they are acting in their own interests is probably wrong. The more likely explanation is that, as happens so often in Irish politics, vocal small but powerful groups and individuals have pressurised the political system into doing something that does not necessarily accord with the common good.

    The cavalier attitude of politicians and others to writing off bank debt is undoubtedly a reaction to the irresponsible way those entrusted with running the Irish banks behaved in the years running up to 2008 but it misses the point that the taxpayer now owns the banks.

    The €3 million threshold looks odd from every point of view. For a start it means that the taxpayer, who now owns almost the entire banking system, will have to foot the bill for losses run up by those who speculated in the property market. http://www.irishtimes.com/newspaper/opinion/2012/1027/1224325792973.html

  28. Tony Brogan

    Here is a good story about the central banking system and why it should be closed. do not imagine this does not apply to you because it does, nomatter what you do or where you are.

    Read the following carefully
    http://www.thedailybell.com/28208/Anthony-Wile-Detlev-Schlichter-on-the-Nature-of-Money-and-the-Evolution-of-an-Inflationary-Depression

  29. breltub

    Let me see if I understand this mortgage debate:
    “I like brick”
    “I like door”
    “I like driveway”
    “I like lamp”
    Everyone else should like these for me too!
    “I like pints”

    Accurate?

    • Dorothy Jones

      Like…as they say…

    • Dorothy Jones

      Yes you are

    • bonbon

      That’s taking the KISS – Keep It Simple Stupid – principle too far.

      Try living out in Connemara with a tent, no roof, no door, no brick, and a torch, and run that by us again. Evidence of foreclosures and evictions are evident all over the famine landscape.

      The other side of the coin, literally, is securitization of mortgage bundles, a bankers “instrument” of the derivative epoch.

      Everyone is supposed to like these securities portfolios, discuss them over a pint, and bail them out. It seems the so-called insolvency bill is there for exactly this.
      Who’s standing the next round I wonder?

      • breltub

        If you are in Connemara with a tent, and none of the above and you have a mortgage on it then you are beyond help!
        If you want to discuss mortgage securitizations knock yourself out. Wrapping them all up into CDO’s created a fine mess when they went toxic. I have a problem paying those via my taxes. I am sure everyone else does too.
        But I also have a problem subsidizing people getting mortgages through mortgage interest relief, all it does is make houses more expensive, and those CDO’s more toxic when the free money and tax relief runs out.

        I also hear the argument that the state was solvent and in great shape before it went bust bailing out the banks, but I read somewhere else that 28% of the price of a new home went in taxes to the state. To say the state did not benefit from living beyond it’s means during the boom is incorrect if revenue is boosted by borrowing by proxy through people buying houses on huge over blown mortgages. It is the overall debt that counts, especially if the state ins engineering debt by proxy!

        It is all a very complicated mess when you go and look into it, but the only way out of complicated crap is to reduce the level of complexity!

        My problem is this:
        This mortgage debate seems to take up almost all of the conversation with people going into all kinds of talk about this famine like crap of putting people on street and we have to pay for everyone as a result to make sure we are never as bad as that! It is just a nice narrative to keep the whole bailouts and rubbish talk going, and bring in 1916 while at it.

        The solution to this will be a fairly simple dose of reality once the money runs out, or paper money loses all value!
        There is a lot more to life, and society, than a flipping mortgage. But it pushes the emotive buttons of all those who are mired in negative equity and want to blame the system instead of their own folly.

        • bonbon

          No mortgage on the tent! Still the ruins I visit there are a stark reminder. One must have a house, and not live like rats as the NY victims of frankenstorm say.

          For a financial bubble to prey on this basic need shows they will stop at nothing. And predation it was. Sure I met people lured into this, not listening to reason. That’s how bubbles work.

          Doses of reality for the victims are not really what’s acutely needed immediately, rather a thorough Class-Steagall sheep dip for the banks. After they are shorn sure they’l look like those sheep on Ben Ban!

          Good that DMcW does not yell “told you so” at the families, but that an orderly insolvency is needed. To stop the next bubble, the sheep dip is urgent.

          • breltub

            I agree that David doesn’t jump on the “I told you so” bandwagon, and a sheep dip for all of the F.I.R.E sector is needed to drive out the rent seeking predation you talk about.
            So let’s get it done!

            Everytime I hear about this whole crisis now all I think is yadda f**King yadda F**king yadda!
            It is 4 years already. Get the f**k over it, fix it, prosecute the criminals and get life going again!

            It is this wallowing self pity that drives me mad, everything is always someone elses fault. There is always someone else to blame.
            So far all that has happened in certain circles is sit around and blame everyone else and do nothing, while everyone else emigrates or slowly gets more depressed.
            It’s like boiling a frog!

            Regardless of what happened back then, unless it was criminal, lets fix it and get going and quite the pointless self pity

  30. [...] spend a fair bit of money during the boom (and since for that matter)? … Read the original: Squeezed middle class families need banks to shoulder bad debt … ← The Delights and Dangers of Credit Card Jumping by Joseph [...]

  31. bonbon

    As @joeR posted above, homes should be for secure families with secure jobs.

    Instead the banks sold securitized mortgages. Banker family values indeed.

  32. Tull McAdoo

    Someone told me a long time ago something that I never forgot and it was this ” When you consider the alternative, growing old is not so bad”.lol

    I think you could equate that with mortgage debt in a way, or better still ask yourself the question ” what will happen if there is no deal done on debt”?

    My opinion for what its worth, and bear in mind that I am basing this on a lifetime spent reading finance and economics is this…Some deal will need to be done and it is just a matter of figuring out how much…I could argue that point from here to bloody Darwin but i will leave the last word with the other David..

    Goodnight Ireland, sleep well and take it away an Daithi eile….

    http://www.youtube.com/watch?v=Gpn8MANhdLU

  33. Tony Brogan

    Quotes of the day.

    Today the rigging continues and is more blatant than ever. A nuclear bomb could go off in downtown Manhattan and the markets would barely budge. It’s because they are run off computer programs in the basement of the US Treasury and the Federal Reserve with the help of The Plunge Protection Team.

    - Bix Weir

    The Europeans like to talk about their debt-to-GDP being 100% of GDP, but their pension fund liabilities are (a staggering) 350% of GDP. The French state pension fund, for example, is going to run out in 8 years. How do you think they are going to pay for it? Thus, you have to be very bullish on the price of gold.

    -Pierre Lassonde

    We need to burn the COMEX to the ground and start over. This used to be the envy of the world in how to arrange a safe, transparent, reliable system for trade of worldwide commodities. It has gradually devolved into a den of thieves, where the functions of trade settlement and price discovery have taken a back seat to fraud, manipulation, and political posturing.

    -”Mexico Mike” Kachanovsky

    I feel like a victim of Hurricane Katrina. I never thought it could happen here in New York, but it’s happened.

    -Chris Damon, NYC resident

    Compromise is not what we do here anymore.

    -Harry Reid, Senate Majority Leader

    We’re in the age of the LIBOR scandal, Financial Accounting Standards Board mark-to-market rule changes, high-frequency trading programs front-running retail investors, MF Global’s dramatic demise, and Bernie Madoff’s outrageous Ponzi scheme … it continues to be taboo to even entertain the idea that the precious metals markets could actually be managed.

    -Jeffrey Lewis

    Despite thousands of years of experience to the contrary, central bankers and countless policymakers and economists believe that money manipulation can stimulate and wisely guide an economy.

    -Steve Forbes

  34. Tony Brogan

    Here is a report that says the Canadian housingmarket is in a bubble close to explosion. Is this report accurate. Will it prove that all those contributors at Kilkenomics were wrong about the strong banking system and the canadian economy.

    http://www.bullionbullscanada.com/canadian-commentary/25801-canadian-housing-bubble-nears-implosion

  35. Tony Brogan

    Why don’t we get Ireland on track to monetize silver coin as well as Mexico et al.

    http://www.321gold.com/editorials/price/price110512.html

  36. bonbon

    Speaking at Kilkenomics, investment banker and founder member of the Rothschild International Privatisation team Kiron Sarkar urged the Government to take a more hardline approach to a bank debt deal.

    “Your Irish government right now is not hard. You’re in a position to be able to extricate a good deal. Is your government able to do that? I don’t think they’re there yet,” he said. http://www.independent.ie/business/irish/ireland-told-to-get-tough-on-debt-3282176.html

    • Colin

      Ah bonbon, you never identified yourself in Kilkenny. No mention of LaRouche at all I’m afraid.

      Everyone at the Sunday Brunch discussion felt that Indakinny should hire Kiron Sarkar (who is Irish through marriage) to represent us in discussions to get a good deal. It is still possible. Kiron is willing to do it, for a relatively small fee I’m sure, but this is what he does, he represents clients and negotiated on their behalf.

      • Tony Brogan

        I do not thnk he was there Colin. He relies on newspaper reports.

      • bonbon

        Worries me just a little bit that Sarkar of Rothschild International Privatisation, of the same cloth as Inter-Alpha Group (the banks we actually are bailing out) sounds tough. There is more to this as usual.

        The mere mention of Lyndon LaRouche, Triple Curve, Glass-Steagall and Hamiltonian Banking of a National Credit System would have cleared the podium of some speakers I am sure, clearing the way for the future.

    • Philip

      For a while there, I was worried Sandy got ya. Good to see you back :)

  37. bonbon

    The euro currency will be extinct within a decade, economists have claimed at Kilkenomics.

    American lawyer and former bank regulator Bill Black last night agreed the euro currency would not exist in 10 years’ time. “The euro is the biggest threat to peace and prosperity in Europe in modern times,” Mr Black warned before a packed house at the Ormonde Hotel, Kilkenny.

    http://www.independent.ie/national-news/kilkenomics-festival-hears-euro-will-be-extinct-in-10-years-3281220.html

  38. Adam Byrne

    Cleeres on the BBC!

    Best pub in Kilkenny!

    http://www.bbc.co.uk/news/business-20207064

  39. Philip

    There is a fundamental issue this blog, kilkenomics etc all suffer from – not sure if there is a single word for it – The diagnosis is correct, the cure is obvious enough, but the nature of the patient (Irish people) makes it impossible to administer

    Prof Black in on the ball about the Irish blaming themselves. I find myself doing it. It’s bonkers. No amount of rational or sensible thinking obviates the fact that bankers had a role to play (there!! I am at it again!). We find every other sophisticated excuse that avoids us going up and saying to the likes of the Bank heads and expressing indignation and outrage in a way that is without compromise. Remember Pat Kenny on Radio 1 (Nov 2) trying to control Max Keiser?

    We are a very equivocal people. We do not tell the truth or lie with purpose. We merely bullshit. It is a bad and dangerous habit – it’s a way to get rightly mauled among real honest people. It is morally moribund. It’s like littering except it destroys the mind and morality instead of the countryside (which soon follows suit). Our politicians, media and our so called legal elite are for the most part like dirty little deviants. Max Keisers view of regarding the people who caused this damage in a similar light was tellingly corrected by Pat Kenny. Irish people (note the lack of capital letter) are in dire need of a Psycho/Self Respect enema.

    • Well put Phillip

      Especially the bit about almost falling for it yourself. I know what you meean. During the boom I began to doubt myself but I held out and my philosophy on life proved to be the rock I now stand on. If I didn’t have that philosophy I’d have perished by now

      Max Keiser is good. He is too much for the irish but then again most ideas that are not uber conservative usually are

      • bonbon

        And MK has discussed Glass-Steagall, while RT has often interviewed Executive Intelligence Review spokesman Jeffrey Steinberg.

        There is a popular tendency at MK, perhaps, to be the CSI of finance, the pathology dept. (rather popular with TV viewers), and there is no limit of criminality about.

        Popularity can mean pandering to “tastes” which could be cannibalistic, and entertain away from the urgent action to be taken immediately.

    • bonbon

      Michael D clearly pointed to the anti-intellectual modern fashion that has gripped Ireland. It was not always like that and will not always be so. Michael D deliberately campaigned on that issue against all “practical”, “pragmatic” BS.

      It is a modern phenomenon all across the transatlantic, including most of western Europe.

      It is decadence, simple as that. And what is that the Tiger may ask?
      The metaphor of the Triple Curve brings this to the surface very fast. Firstly because it is a metaphor (which a Tiger cannot sell), secondly it shows a self-destructive negligence of the physical economy over decades, and thirdly it shows the urgent action on 3 fronts immediately essential now.
      That’s called an idea, which many have “forgotten”.

    • whatamess

      yea Max Keiser on Pat Kenny … i enjoyed that thanks

      http://www.rte.ie/radio/radioplayer/rteradiowebpage.html#!rii=9%3A10069371%3A133%3A02%2D11%2D2012%3A

      “It is a bad and dangerous habit — it’s a way to get rightly mauled among real honest people” is just absolutely spot on Philip !! ( I find myself resorting to bullshitting alot in my own life and it causes HUGE problems! )

      • bonbon

        MK has so much experience with the sheer criminality of the banksters, he just cannot BS. Entertainers pandering to generally accepted administration opinion are just breakfast!

        Still the transatlantic strategic quality of the collapse was not touched upon at all. Even DMcW said the ECB should behave like the FED! I just could not believe I heard that! Draghi and Bernanke are twins already!

        The entire structure of the Euro is flawed. And ther FED must be brought back to Treasury.

        • whatamess

          “The entire structure of the Euro is flawed. And ther FED must be brought back to Treasury.”

          +1

          I’m thinking the Euro currency( in next 3 years )is doomed ,without some HUGE writedown .

  40. It is always middle Ireland you pander to. You never talk about the soup kitchens. Maybe another day. Not.

    “They were bombarded by incessant propopaganda”

    We all were but some of us didn’t take out mortgages and bank loans. Some of us (including some of your regular posters) knew that the incessant propaganda was complete brainwashing. To any thinking person it was insane and unworkable.

    You knew it was unworkable and I was glad you were around at the time to cry wolf. That is why I started to read your work. I trust dissenters more than yes men but then I discovered that you are on the make and not a dissenter in any sense

    Last night’s program ‘Too Poor To Retire’ was a revelation. Today I walked around Sligo Town and saw all the taxi drivers sitting in a non existing queue in their little metal prisons
    on wheels and thought there but for the grace of god. I was collecting my dole from the post office and wondered who is better off. Me or them. I know the answer

    No mortgage and no debt. Thank god my Scottish mother taught me about thrift from a young age and that she taught me about the way the world is run for the benefit of the few. That was a better education than any school or college could provide. My parents never trusted the education system you see

    As for the heroine in your book I could not comment as I have not read it and I won’t. Look at the women’s section on the indo website and look at the crap women are supposed to like.
    It is insulting to women.

    Anyway tonight. Beer or Steak? Maybe both.
    Celtic are playing. Sure it’s a grand old life.

    To anyone in debt. Try to live and be happy. Tomorrow is another day and life goes on and friendship is more important than wealth

    To anyone who is hiding money offshore. Shame on you.

    • Nono

      +1 about the women section in the Indo! It is indeed extremely sexist and insulting to think that all women care about are stupid celebrity gossips but there you are, it’s been that way for a while now and nobody seems to complain… How sad.

      • It is insulting and I would go as far to label it as stereotyping and blatant backward sexism. It’s up to women to fight this and put things right. It’s not my battle but if I worked at that rag I’d be asking a few questions and promtly shown the door no doubt.

    • molly

      The world is run for the benefit of the few ,what a super mother.
      I was looking at the news tonight and found it hard to take on board what the government was saying about how they could not touch the bankers (retired) pensions,they could only ask please will you not take such a big fat vulgar pension,because you help destroy this. Country and helped to turn thus country into a banana republic.
      What would have happened in the bank went under,in a sence it did go under,there should be not pension for them .

      • If our elected representatives and the forces of law and order can’t budge them then clearly they will have to be removed by force and the only force strong enough is the will of the people

        Four years after the banking collapse 15 senior managers of the former Anglo Irish Bank are still employed under the new facade on very handsome salaries and retirement packages of 500k. Get rid of them and do it now and get outsiders in to do the job

        It is immoral and criminal. Full stop

  41. ‘They believed that the price of houses would continue rising. Why wouldn’t they?’

    Because you are licking the populist arse as usual to shift books. What an statement. Is it not obvious and in direct contradiction of your teachings since 2003?

    Do people really pay you for courses?
    F^&3 me. They must be really dumb

    Surely they’d be better visiting public libraries and doing education and improvement the old way instead of this silly
    American model of expensive education and student debt (lunacy because anyone who feel the need to pay is not aware that education is a basic human right) while we still have public libraries that have not been sold to one our for profit
    ‘partners’

    Look. Wee David lives in a dream world and seems to be doing nicely and good luck to him but there are far more rewarding things in life than spouting nonsense and making a buck. It looks grand from the outside but inside there is doubt, more doubt and mortal fear. Don’t be conned folks and make your own minds up

    Fear that you could be wrong and doubt your own intellect and ability to keep up the pretence. The middle class disease. The disease makes them think that you are nothing without a mortgage. These people are mentally ill and that is the real reason they are in strife. No good blaming the banks for a poor educational background and values that are 100 years out of date. Grow the hell up

    Middle class upbringing and doping with unrealistic values is the real cause of our maliase. The middle classes are lazy and not cut out to create a seismic or revolutionry shift because their conservatism and selfishness knows no limits. They’d buy houses to live off the rent of their neighbours. Feudalism in a burg near you. Coming soon !!!

    Only when they see their own kind visiting soup kitchens do they begin to switch on the brains god gave them and take
    their minds off money and their pathetic woes. Seriously the middle classes are the real problem. Not the poor. They are the problem because they are the ones who did not know their limitations

    These guys trade on their suppoosed intellect (politicians don’t because they don’t have intellect and instead depend on a sense of superiority) and they can’t stand being proved wrong or worse, being accused of hypocricy especially in the workplace. Time will tell and time will prove that the irish have no concept of management, personally or collectively

    This blog is a record of irish ecomomic life and will be visited in the future after we have all gone. A leaving cert
    student in 30 years time will trawl these boards looking for clues and what they are looking for will not be found in
    the articles. Basically because the articles nowhere near explain real life in Ireland in 2012. Readers will quickly come to the conclusion that this is a hive where the conservatives of ireland used to hang out and discuss their seflfish woes and forget the real victims in this charade like pensioners and kids who can’t find hospital treatment. They will conclude that this was a nation of selfish bastards who went down faster than the titanic because it was made of cardboard and not from sterner stuff. Who will provide the stern stuff for future generations? Not Mc Williams, politicians or jpurnalists that’s for sure. We need to do it ourselves

    Just don’t take all this Dublin ‘intellectual’ shit seriously because these guys will have you in an asylum if you listen to their hot air. Wing and a prayer stuff and it shows. Anyone who thinks otherwise is connable and corruptable any one who swallows the irish main main stream one bit media is an idiot. But here we we are main stream media land fighting the c^&ts on their own pitch and they do not like it one bit. Their silcence is deafening

    They were taken the piss out of left, right and centre by local shysters in Dunnes Stores suits working for billionaires and did not trust their own instincts and what their brains should have been telling them. Most people abdicated on personal responsibility and thrift but most of all they abdicated on political responsibility. This is why we are always ruled over by a mob of wankers. And make no mistake they are just that. A mob like the tribal bosses of the past 100 years, They are anti intellectual and they will
    never be separated from the stench of grubby brown envelopes packed with filthy cash, nepotism and sheer corruption

    From the insane Dev to Haughey and Ahearne people left it up to someone else to (do something about it) but stupid tribalism always won over common sense. Such intellectual laziness is the result of decades of doping the masses
    through the main stream media and the church. Now that the bishops have been put right the people are looking to the
    likes of Mr McWilliams to provide intellectual and moral leadership but let’s get one thing right. These people don’t
    give a damn about intellect or morality or you or me. Their record proves it and so does the fact that their books are being sold in bargain bookshops for a couple of pounds a throw. I would not take them for free because I know they are probably full of nonsense.

    Maybe too vain to put two and two together and pull the handbrake on their own egotistical imaginings and
    those of their partners?

    A steady job. A mortgage. A pension. Social standing in the community etc. All that is crap is from 1950s tv commercials and they are still pulling the same strokes. They treat people like children just like irish journalists are still doing do sixty years later, for our own good you see because most of us are not capable of handling the truth

    Conditioning is everything

    Come Mr McWilliams. We all know know the truth about human vanity, mass marketing and the stupidity it germinates.
    Just that you are in a rather tight corner now old boy and hell slap it in to you for all your fancy education and far travelled experiences you sound like a 16 year old. You are no more intelligent than anyone else and I know you know it. You have become a pane of glass and your invisibility from the media must hurt. Deeply. Nothing better for a true working man than to see the likes of you are your type getting it right up the arse with all your selfish insticts and vanities coming loose at the

    This is all double speak and Mr McWilliams is becoming more irrelevent by the day. A minor media celebrity (who has a large facebook following) up to their neck their own bullshit. Milties little followers are in a hard place now and I suspect that most of them realise by now that
    they spent most of their adult life getting it seriously wrong. To reach ones 40s only to become an intellectual fraud must be the hardest and most soul destroying experience imaginable.

    Mr McWilliams is up to his neck in treacle now and he comes across as a bit of an idiot when you attempt to to decipher the substance from the sugar. I challenge you all to think about this

    ‘The most educated irish tribe ever’ are also the most clueless irish tribe ever

    Where are the HiCos now?

    It galls me that people like you get handsomely paid for blowing hot air while so many suffer in silence.

    I’m Looking Through You. Lennon & McCartney 1965

    • Pauldiv

      You detailed analysis and supporting mindset is interesting to read and thought provoking . I salute you for that .

      However your moment to rise to the podium to admonish people has been chosen by you in hindsight only and for your reasons that have been selected at a time to suit yourself for reasons that only you can answer behind the veneer of your anonymity on this site .

      Any writer can correlate any story they so wished from all facts on this great site only after time has passed .And that is all you did . It explains why you are so interested in what is written by DavidMcW.

      The host of this site always acts with foresight and determination and brings to all his readers that uniqueness that only real leaders posses and statesmen are among those .

      It would be interesting to know how you can do that and how .

      • As usual you make as much sense a chinese calendar wrapped up in a kaleidescope John. Anonynity is not my brief and I prepared to meet anyone from site site face to face.

    • Tony Brogan

      ”education is a basic human right”
      Since when. Define education. How much is too much or not enough.

      ”The middle classes are lazy and not cut out to create a seismic or revolutionry shift because their conservatism and selfishness knows no limits.”

      The class consciousness of individuals leads to divisions of society and lack of progress.I presume that your working class is the pillar of society

      ”They’d buy houses to live off the rent of their neighbours. Feudalism in a burg near you. Coming soon !!!”
      If somebody had not saved and invested in your abode there would be no place for you to live.

      ”take their minds off money and their pathetic woes”
      Yet you take the money earned by another and redistributed to you because it is your right to have a free education and a free house and money to buy food etc.

      Your critcisms and your manner of criticism of others are not coming from an impeccable source.Seems you are happy to take all the freebees at others expense. I sence no thanks or gratitude.

      • bonbon

        “Pursuit of Happiness” along with life and liberty are self evident natural law. That is why slavery was evil – no pursuit of happiness could possibly happen for “people as property” (the Confederate version from John Locke). And without education there is no chance of liberty or the pursuit of anything at all.

        The General Welfare of the Nation is above all the priority for any government of the people, for the people and by the people – that needs education.

        • Tony Brogan

          Education is not a right.
          Freedom to be able to obtain an education is what is important. The freedom of a free citizen to choose what education one wishes to have. Self education not state education enforced as a “right”.

          • bonbon

            Freedom requires education. Choice requires education.

            A cow is free to chew grass by birth and is at liberty to do so, quite happy to continue without improvement. Human beings are entirely different to any biologically determined animal.

            To be a citizen means an educated sense of society. And society gives citizens, in contrast to cows, a knowledge of previous generations and a future, also in contrast to cows.

            Anyone or anything that attempts to block access to this multi-generational process of society is actually attempting to prepare the herd for culling. That is the principle of Empire in a nutshell. The idea of an individual, thrown into society, with irrational freedom, no future, no past, is pure Nietzsche, or actually Roman Dionyssian. “Throwness” is another name for fascism.

            We the People reject that.

          • Philip

            Oh dear…I agree with Bonbon on this 100000% Education should be free to all and the educators should be paid better than bankers and subject to very tough meritocracy.

            That said, the science of pedagogy is still in its infancy and the process of knowing and understanding and experiencing should never be interchanged or trivialised.

          • bonbon

            And teachers cannot be replaced with iPad’s !!

          • bonbon

            Einstein :

            “It is open to every man to choose the direction of his striving; and also every man may draw comfort from Lessing’s fine saying, that the search for truth is more precious than its possession.”

            So keep searching !

          • Tony Brogan

            Along with the right to be free to educate oneself does not come the right to receive an education. If you want an education in any area go ahead and arrange it.
            State education which you appear to equate as a right to education will give you what they want you to have and not what you should have or wish to have as a free choice.
            Education has now become coercsive. Attend when I tell you and learn what I give you.
            Then there is that word free again.
            Many people who attained the highest achievement in arts or science are self educated and sort out the cources they wished to attend.. I would suggest that the great majority of those who wish education in the arts obtain it through the exercise of free will and the willingness of the market place to provide at whatever charges which range from free upwards.Scholorships and bursaries are available to the gifted and provided voluntarily.
            Education is not a human right it is a condition that can and should be obtained through individual effort.

      • 11 family killed in the Clydebank Blitz pal and fought in 2 wars. Too right I am happy to take a freebie. They won’t do to me what they did to my family

        It’s been well earned. I’d take a job in the morning by the way.

    • Philip

      The halo effect of being in the media is a reality made by both the hosts and their followers. But deriving negative conclusions as you have done by blaming the host fails to understand Marshall McLuhan’s “Media becomes the message”. Media we have today along with need to drive critical mass attention has an unfortunate end product of being popular, light and mostly exposed to the minds of the middle class – i.e. those who can afford the use said media.

      I agree with the frustration of intellectual hollowness seen in many of these kinds of articles, but you have to hand it to this host for this site…he has our attention and yours and overall its not that bad at all.

      Now that we are here, now what? That’s the question. How do you motivate people? How do we deliver that enema of much needed self respect I referred to earlier. Ranting won’t work. Knocking won’t work particularly if unfounded. Emulation is not practical. We need to be true to ourselves.

      The middle classes, indeed everyone need to assert a moral compass. DMW blog is making this apparent as we discuss the article. We are all struggling here on how to express it and deploy it in our everyday lives. If it were easy, our host would be doing something else.

      • We have to start being honest Phillip. There are no other conclusions to be drawn except negative ones. I am not alone in my state of mind and McWilliams knows this perfectly well yet he sneers:

        “Scores of abandoned kids hurtle around like freckly extras from Slumdog Millionaires, as hungover parents try to keep a semblance of control, doing penance for their night on the tiles”

        Who is this language directed at I ask. It is almost psychotic in it’s detatchment penchant for voyeurism. There is no empathy for this country or feelings of warmth towards his fellow man anywhere in his writing. Miltie’s little hitler

        So who is he writing for?
        Maybe some of you might now begin to wonder if you have been had all along

        Waken up guys. It’s not the republican way

    • StephenKenny

      I can’t think of anyone who has had a greater effect in getting so many people to start to understand some of the things that have caused those who suffer in silence, to do so.

      When dealing with a reality that is so far removed from what people believe to be the case, it is very difficult to tell the truth and not to be dismissed as a ranting leftie.

  42. bonbon

    Goldman Sachs, Barclays: Sandy Was a Good Thing

    Nov. 6, 2012 (LPAC)–With a typical logic that defies reason and morality, Goldman Sachs and Barclays have issued reports that {Forbes} has endorsed under the headline, “Despite $50B In Damages, Hurrican Sandy Will Be Good For The Economy, Goldman Says”.
    “At the end of the day,” writes Forbes, “Sandy may end up being beneficial for the U.S. economy, pushing indicators like construction spending, industrial production, and retail sales above their pre-disaster trend-lines over the next few quarters, according to Goldman Sachs….
    “In terms of GDP, both Goldman and Barclays expect the effect to be muted. By means of comparison, Hurricane Katrina did manage to push output down by 0.5 percentage points in the second half of 2005 (according to Barclays, Katrina caused a 0.27% hit on the total $40 trillion stock of assets produced in the economy at the time). Goldman’s chief economist, Jan Hatzius, expects the effect on GDP to be essentially negligible, while over at Barclays they forecast a 0.2 to 0.3 percentage point drop in fourth-quarter GDP, pretty much to be offset by the rebound in coming months. At the same time, they kept their GDP estimate steady at 2.5%.”
    Comments posted about the article overwhelmingly panned Goldman’s and Barclay’s analysis, with one saying that by the financiers’ way of thinking, a nuclear holocaust would be an even bigger economic boon.

  43. Brendan Burgess

    David

    I wonder if you have overlooked Pat Flannery’s question above?

    “You write: “In the US in the 1930s they introduced a scheme whereby the bank and the individual did a deal. The person’s mortgage was reduced and the bank was compensated by being offered half of the potential equity in the house, so that when the house is eventually sold in 10 or 15 years, the bank get first call on half the value of the house.”

    I never heard of such a U.S. “scheme” in the 1930s or any other time for that matter. Where did you pull that one from? Do you have any references to back it up? ”

    I have searched for more information on this scheme but I have not been able to find it.

    I don’t see how you can have a debt for equity scheme unless there is equity in the property. So it’s not a solution for properties in negative equity.

    Brendan

    • bonbon

      Franklin Roosevelt, FDR, did so many things and so quickly he was signing executive orders for 11 days non-stop. Look up the Reconstruction Finance Corp, set up to counter Wall Street credit-stonewalling, along Hamiltonian banking lines. There was a FHA, Federal Housing Administration. I am sure there is much more :

      http://eh.net/encyclopedia/article/butkiewicz.finance.corp.reconstruction

      Never forget though that FDR had serious enemies that tried a military putsch, yes a junta in the US – The Business Plot, so there is huge confusion sown over his policies that actually worked and will work now on a massive scale starting with Glass-Steagall.

      I do not know if DMcW refers to this…

  44. Tony Brogan

    http://www.thedailybell.com/28247/Ron-Paul-The-Economics-of-Disaster

    Thoughts on Sandy and the moral hazard of government insurance programs where the private sector will not venture.

  45. Tony Brogan

    Join the Ballyhea protest. It is something you can do to get involved.

    http://thechatteringmagpie14.blogspot.ie/

  46. Tony Brogan

    usawatchgreghunterdog.com

    The President can legally order the execution of any U.S. citizen without due process. The President did just that last year when he ordered drone strikes in Yemen that killed three suspected American born terrorists. Relatives are suing the U.S. government for wrongful-death. According to a New York Times story, “The killings violated fundamental rights afforded to all U.S. citizens, including the right not to be deprived of life without due process of law,’ the complaint says.” (Click here for the NYT story.) There was not a single question asked of either Presidential candidate by the MSM about Presidential “license to kill.”

    Finally, the National Defense Authorization Act (NDAA) was signed into law by President Obama on New Year’s Eve 2011. It allows for the indefinite detention of suspected terrorists which includes U.S. citizens. This law overrides due process contained in the Constitution. The President’s signing statement says, “I want to clarify that my Administration will not authorize the indefinite military detention without trial of American citizens.” But that didn’t stop President Obama, a Constitutional scholar, from signing it into law anyway. The American Civil Liberties Union (ACLU) called this act “. . . a stain on our nation’s history — one that will ultimately be viewed with embarrassment and shame.” (Click here for more on the story.) You can’t get more liberal than the ACLU; and, yet, the left and right were silent and asked no questions of either Presidential candidate about this Constitutional atrocity.

    • bonbon

      “Left” and “Right” just elected Wall Street.

      Wall Street is the president now for very likely a short time.

      Ireland elected a Bank.

      Banks are simply unfit to serve, and are anyway Too Big To Serve.

      Imagine that, electing totally bankrupt banks. Goes beyond even von Hayek’s wildest nightmares!

  47. Tony Brogan

    http://www.davidicke.com/headlines/75091-big-story-irish-childrens-rights-referendum-will-make-children-property-of-the-state-us-legal-expert-

    Vote the children’s rights bill down.
    It is an attempt to gaincontrol over your children. Children will be seized by the state from their parents and it will be months if at all before you can regain them as you have to go through the hoops to prove your innocence.

You must log in to post a comment.
× Hide comments