Government appoints experts to consult on indebtedness

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janeymak said:
Don't knock the hindsight! :) How can someone so wrong be part of the solution?

How about this GEM. Do you consider this to be the thoughts of someone who can help?

If you’ve a real need to buy now – for example, if you are starting a family – don’t allow the fact that your job is a bit uncertain to put you off. If the worst happens, the government has ordered AIB and Bank of Ireland to lay off homeowners in arrears for at least a year, while other lenders must give them a six-month breather.
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You can pull out selected quotes from Brendan Burgess until the cows came home. I could pull out ten times as many where he was right. Neither would prove anything other than the fact that he is a human being. His long track record of working and campaigning voluntarily on behalf of consumers makes him an ideal candidate for this committee.
 
Have an objective look at the 11,100+ posts here on Askaboutmoney.

Anyway, see the remainder of my post - Neither would prove anything other than the fact that he is a human being. His long track record of working and campaigning voluntarily on behalf of consumers makes him an ideal candidate for this committee.
 
LDFerguson said:
Have an objective look at the 11,100+ posts here on Askaboutmoney.

Anyway, see the remainder of my post - Neither would prove anything other than the fact that he is a human being. His long track record of working and campaigning voluntarily on behalf of consumers makes him an ideal candidate for this committee.
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That's an incredible leap of logic you have made there. So he's a human... who isnt?

By your logic Willy O'Dea should be reinstated?
 
@LDF
You miss the point on quotes - support for 100% mortgages and particularly interest only mortgages, captured in "quotes", considered the family home as an investment vehicle - a tradable financial asset. Therefore it seems the family home should retain its status as a tradable financial asset in an insolvency process. http://www.askaboutmoney.com/showthread.php?t=130961
 
janeymak said:
That's an incredible leap of logic you have made there. So he's a human... who isnt?

By your logic Willy O'Dea should be reinstated?
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Willie O'Dea didn't step down because he made predictions that didn't turn out to be true, with hindsight. That's an absurd comparison.
 
kaplan said:
@LDF
You miss the point on quotes - support for 100% mortgages and particularly interest only mortgages, captured in "quotes", considered the family home as an investment vehicle - a tradable financial asset. Therefore it seems the family home should retain its status as a tradable financial asset in an insolvency process. http://www.askaboutmoney.com/showthread.php?t=130961
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Aren't we now veering into the territory of discussing whether or not we agree with Brendan's views, rather than his suitability for the committee?
 
The ongoing deliberations of the Law Reform Commission will be considered, specifically reform of personal insolvency, bankruptcy law and debt enforcement.
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I think this is very positive.
 
LDFerguson said:
Willie O'Dea didn't step down because he made predictions that didn't turn out to be true, with hindsight. That's an absurd comparison.
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Your right its absurd but relatively harmless. Unlike someone with a PROVEN track record of ideals and views and ADVICE that if taken could probalby be harmful.

I find it grotesque and blind that you would think that someone fit to help home owners with such a record of stupid advice. Right he's human *throws arms in air dramatically* . Its plain for most to see that this committee or panel needs people who didn't tell people to invest in banks and who didn't tell people to get mortgages with shakey job prospects.
 
janeymak said:
Its plain for most to see that this committee or panel needs people who didn't tell people to invest in banks and who didn't tell people to get mortgages with shakey job prospects.
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Nope. It's plan for most to see that this committee needs a group of people with combined expertise of banking, property, the law, economics and consumer issues.
 
I am also quite concerned about who has been chosen as panel members.

They all had a vested interest in talking up house prices/bank shares during the bubble, and their past opinions would make me think they are somewhat clueless about the basics of economics.

But of course, this is Ireland, so it's jobs for the boys. Who cares if they're the exact opposite of who you'd want on the panel!

Bronte said:
I'm glad Brendan is on the committee at least we can feel someone we 'know' is in there.
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It's not simply about expertise it's about judgment. While he may be an expert Brendan's judgment is poor. At a macro level he was enthralled by the Efficient Market Hypothesis. EHM holds that the current price of an asset reflects all the current knowledge about the asset in the marketplace. This means the severe undervaluation or overvaluation(bubbles) cannot occur. So he failed to see that a massive credit bubble was inflating a massive a massive property bubble.
On the micro level interest only mortgages may make sense to a seasoned investor who has run the numbers and built in a margin of safety but the average punter just looked at the monthly payment and thought they could borrow more.
Brendan knew that equities had been the best performing asset class over the last 200 years and that Irish equities had generally been in line or better than other markets. This knowledge led him to advise on a 100% equity allocation for "long term" investments(the term is getting longer and longer) and in particular that diversification outside Ireland was not necessary.
These are not sideline issues. They represent fundamental errors in judgment. Added to all of this is a certain arrogance and unwillingness to listen to others. Dismissing Morgan Kelly or David McWilliams because of the tone of their language or writings is not good enough! These guys were right! Listen and learn!
 
tyoung said:
So he failed to see that a massive credit bubble was inflating a massive a massive property bubble.
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A cynic might argue he did see these things but was making so much money from his large stack of bank shares that he was happy to keep quiet...
 
Just wondered, at what point in my chosen profession will I be considered an expert? Will I know or feel it myself or will my peers tell me?
 
seantheman said:
Just wondered, at what point in my chosen profession will I be considered an expert? Will I know or feel it myself or will my peers tell me?
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when you take a gamble about the future outlook and guess right and get some press coverage.
 
jack2009 said:
when you take a gamble about the future outlook and guess right and get some press coverage.
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That seems fair enough, but then why is Brendan Burgess on this panel of experts? He's the same 'expert' who in 2007 recommended that rather than put money on deposit with the banks, people buy their shares??? I assume he wasn't a large shareholder himself, was he? Despite being bad advice that could be construed as a conflict of interest.
I would invest in AIB or Bank of Ireland rather than putting money on deposit with them.

-Irish Indo, 18th August 2007.
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There's a funny quote in that same Indo article from some 'financial adviser' called Liam Ferguson. I'm glad he's not on any panel of 'experts'!
The last thing you should do when a correction comes along is sell out. The losses at the moment are paper losses; they only become real losses if you decide to sell.
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The excellent Kathleen Barrington casts a cold eye on the scheme:

[broken link removed]

Here’s a question for Hugh Cooney, chairman of the government’s Mortgage Assistance Group. Should the taxpayer be called upon to help fund the mortgages of troubled borrowers such as Twink?

The actor has said that she is ‘‘actively working on a solution’’ after Bank of Scotland (Ireland) earlier this month lodged an application to repossess her family home.

‘‘Unfortunately, I find myself in this current situation - no different to half of the country that have lost their jobs or, like me, are single parents - trying to pay my mortgage, bills and raise two children on my own,” Twink said in a statement.

Except that she is not quite in the same position as half the country. She lives in a 300-yearold Georgian mansion in the south Dublin suburb of Knocklyon, for which she and her former husband, David Agnew, are estimated to have paid almost €1million, while spending a further €390,000 on renovations.

If the government were to agree a scheme under which someone in Twink’s position were to be offered reduced interest rates, longer mortgage terms, the rolling-up of outstanding interest, or even debt-forgiveness, there would be a corresponding impact on the balance sheets of the banks.

[...]

Then there’s the question of where you draw the line to allow people to stay in their homes. Should someone like Twink be forgiven some of her mortgage debt and allowed to stay in her mansion, or should she be forced to hand back the keys to Bank of Scotland (Ireland), a bank which gained a reputation for some pretty reckless lending during the boom years?

Is it fair to force a distressed borrower to sell at a time when there is effectively no market, forcing the borrower to lock in losses? Is it fair to ask an ordinary taxpayer on the average industrial wage to pay for (say)Twink’s mansion with his/her taxes?

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The New York Times has reported that the [US] scheme has raised false hopes among people who simply cannot afford their mortgages, effectively delaying the day of reckoning for the banks and prolonging the economic uncertainty.
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@Canice

The Barrington piece reflects the moral hazard inherent in any mortgage relief scheme which clearly has to be controlled for.

The US model you highlight has resulted from a different set of historic economic, social, legal circumstances. Which include an efficient personal bankruptcy system and cultural acceptance of home loan foreclosure, home repossessions and jingle mail. Studies of the US mortgage market have highlighted that three things are required before loan defaults become a serious issue: High rates of negative equity, rising unemployment and declining incomes. US experience is debt default problems reverse once people find new jobs. The taxpayer doesn’t foot the bill for personal insolvency – it’s borne by borrowers and lenders. Supporting crisis housing markets in some states and keeping people in their homes is proving more expensive then the efficient personal insolvency system.

Here with rising taxation, declining incomes, joblessness, rising real interest rates, consumer debt default rates are so serious as to undermine economic recovery. Unlike the US, where the majority of consumer banks are functioning, our banks cannot afford to write off billions in consumer debt and people cannot afford to pay what they owe. Hence the consumer debt task group.

We have accepted the inevitability NAMA which will result in debt forgiveness - borrowers will pay what they can and the balance will be have to be written off. It is inevitable that we will also have to accept consumer debt forgiveness where ordinary people will pay what they can and the balance is written off. As banking is a busted flush the only one that can keep banking functioning is the state - which means the taxpayer. Those that think this amounts to a charter for free riders and a free lunch will of course highlight the tax payers cost and ignore the economic and social consequences of forcing people to live on the poverty line without hope of ever becoming productive members of society.

Highlighting one persons plight to surface the emotive issues around moral hazard helps in informing constructive debate - that for me is the intent of the article.

 
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