Capitalism

[Space cat]

Do you remember those institutions formed by groups of people who pooled their money so that they could lend it to each other to buy houses. What were they called again? Oh yes, building societies.

What a good idea they were. They took your savings in then lent them out as mortgages - without taking any profit for themselves. What's more, it was never easy to get a mortgage. They made damn sure they didn't lend more than they could get back by repossessing the house and the joke was that the manager must have had a really bad day if he gave somebody a mortgage.

The amount they would lend varied from one to another, as we found out when we went looking for our first mortgage. The Northern Rock would lend us 2.5 times our total income - which would have been enough except that my student grant didn't count as income. All the others we tried had a policy of either 2.5 or 3 times the higher income plus the lower so that was no good either. (Even as late as the seventies, there was an assumption that the purchase of a house would soon be followed by the arrival of the first baby. )

Then, around about the time of Thatcher (aka the end of the world as we know it) something happened. It crept in slowly. Building societies started lending money for home improvements, then for cars, then for anything. They were almost dragging people in off the street and begging them to have a mortgage.

And then, finally, greed won out and they became banks, able to give money away hand over fist to anybody who asked for it. I have it on good authority that some were handing out loans to people without even bothering to check that they had any income at all. As I said earlier, they took your money and just gave it away.

 

[Infidel]

So So true space cat, but when you owe nothing how can the esteemed millionair prime minister Mr David Cameron and his gimp, I forget his name keep saying "were all in this together".
I do not wish to be.

 

[spacecat]

@ Space Cat

No matter what is offered you have a choice to take it or not.

If you loan loads of dosh don't complain when u have to pay it back.

People take no responsibility for their own actions

 

[Norcon]

No matter what is offered you have a choice to take it or not

So if you were offered a 40% percent pay rise tomorrow you wouldn't take it?

Like wise if you lost your job completely or your pay was slashed in half you wouldn't complain?

 

[imamartian]

No matter what is offered you have a choice to take it or not

So if you were offered a 40% percent pay rise tomorrow you wouldn't take it?

Like wise if you lost your job completely or your pay was slashed in half you wouldn't complain?

people are out to make..... they want the best for themselves don't they?

 

[spacecat]

No matter what is offered you have a choice to take it or not

So if you were offered a 40% percent pay rise tomorrow you wouldn't take it?

Like wise if you lost your job completely or your pay was slashed in half you wouldn't complain?

Is this a deliberately stupid question or is it your idea of logic?

 

[Norcon]

Two very simple questions and yes you would accept the pay rise and yes you would complain if you lost your job or had a pay cut.

Have a relative in the roi. He's been a builder for the last 25 years and before the cc he was earning over 1000 euro's a five day week as project manager for several years.
Two companies he was with have went burst in the last three years. His pay was cut by 40% then eventually paid off.
Built a new house and is now saddled with a mortgage and no work.

Some might say he was making a better life for his family, others might say it was pure greed. There's thousands like him.

 

[spacecat]

Firstly a blind man could see that the whole ROI tiger economy was built on sand I know irish people who thought at the time it was doomed to failure so basing your whole future on such a flimsy premise was misguided

How much did he borrow over his income, was it just 2.5x?

Did he take out payment insurance, has he looked elsewhere for work



Any investment is a gamble, I bet he was thinking of making big bucks when he was coining it in based on a joke economy

 

[Norcon]

Firstly a blind man could see that the whole ROI tiger economy was built on sand

Bertie Ahern didn't see it coming nor his cabinet it would seem. Clever people don't you think or maybe not?
Cowan was like his uk counterpart Brown, completely blind to the forth coming credit crunch.
When advised to slow down the tiger Ahern told the "doomsmongers" to go and "commit suicide".
A comment for which he late apologised.

Still he has walked off with a 350,000 euro pension in his first year after retirement and 165,000 annually after that.
Not bad for a farm boy.
Never mind though people like my relative will still be slogging in some gutter hole for a pittance to pay for it, whilst simontaneously trying to feed his family and keep a roof over their heads.

 

[alumni]

I was working for an Irish company when the economy went into a nose dive."It's only a recession if you talk about it!!!"
They knew it would all go tits up when the grants from the EU stopped but everyone just said their economy was so buoyant it would easily ride out any downturn elsewhere.

 

[spacecat]

As soon as banks started chucking money away to anyone who asked it was fairly obvious that it would all go Tts up at some point

 

[spacecat]

People never seem to learn the basic facts that all systems will eventually rebalance


If it seems too good to be true........it generally is!

 

[Mickymoody]

Is there any relationship, on a smaller scale, that rumour broke out that Northern Rock was going under, so everyone immediately withdrew their money, so it did go under, to the grander scale? If people stood fast, kept their money in NR, then a lot of bother could have been avoided?

This classic scenario of 'panic buying', or panic withdrawing in this case? Always hyped up in the media, just to add fuel to the fire?

I've got an account with NR, and hear nothing from them. I didn't take any money out.

I suppose that is a micro version of world events, told in playschool version. Sorry! I'm no economist.

 

[Space cat]

Any bank will go under if too many people try to take their money out at once. It's an inherent weakness in the whole concept of a bank. I'm no economist either but it occurs to me that, if you have sufficient clout, you could put a bank out of business just by spreading rumours.

 

[spacecat]

Banks like any other business have to balance the books and perform well against the competition
A bank that makes bad decisions will do badly step forward northern rock, Kaupthing etc