Irish Depositors beware - Pat Kenny Show

Gervan said:
dub nerd, I dispute this. I was well aware of the previous guarantee covering 90% of €20,000 and had so arranged my funds as to have lost the minimum. If the banks had closed, I would not have lost "every cent", only 10%.
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If a bank went down you have a fair chance that you get back 90% of your deposit. If all the banks closed, it's it anyone's guess how much if anything you'd get back! There simply would not be enough funds to go around.
 

You were always gambling, you just never bothered to take the time to understand the risk you were taking! Every single financial product from a simple deposit account to a derivative carries risk with it, so it is up to you to make sure you understand those risk before you pump your cash into it.

I've seen several people on this forum happily moving cash out of Ireland in to German banks 'cause it's save there! Yet they fail to understand that the banks they are placing their funds in carry a far higher level of risk than an of the Irish banks.

I've read of people suggesting that Switzerland is safe and yet if they took the time to investigate it they would discover that if balloon went up they would get very little back because we cap the payouts at 9b per bank (9b is chump change for most Swiss banks) and furthermore we have a long history of letting banks go to the wall!

There is no such thing as a risk free option.
 
Taxes, charges, levies, USC, PRSI, DIRT etc etc. Show me one taxpayer who wants to pay more. The only consolation with Ciaran Lynch's remarks is that they are made by a Labour TD. It's not as if they are in power (only in Government). I would be more worried if a FG Minister said it.
It is ironic (if not laughable) to hear SF criticising the Cyprus levy, unless they are concerned about their Russian friends losing some money or have SF lodged their Northern Bank deposits in Cyprus?
 


Jim 2007 - This is completely off topic, have you listened to the piece..? my original post relates to our State dipping their hands into our deposit accounts.

For my part what has changed today and after Cyprus is that in sharp focus I am now clear the State will only step in if there is a Bank failure.

I for one never contemplated that a member of Government would come right out and say what he said today, listen to the piece, that is exactly what he advocated despite Pat Kennys charge at him.
 

Every type of asset has been subject to levies, taxes etc. over the past 100 years, I don't see why you should be surprised! Forget about the talking heads and seek out the hard facts and think for yourself.
 
My Annuity is not guaranteed if the assurance company should fail.
The Government has already authorised itself to dip into our bank accounts via the revenue if we do not pay the proprty tax
 
I always thought a guarantee comes into play only when the guaranteed party fails so i am wondering what all the fuss is about regarding this particular aspect of the discussion.
 
I went to listen to the pod cast of this last evening and never got as far as the Ciaran Lynch bit. Far more shocking is what went before in relation to debt and FLAC and New Beginnings.
 
This could be already answered somewhere else but cant seem to find anything similar...
In Cyprus...
What would happen if you had €60k in one account and say €50k in another?
Would they target you for 9.9% as you would be over the €100k? or the lower amount on both accounts?
 
An enlightening piece of radio. Maybe the proposed PRSI on savings is not going to satisfy our political masters.
 
Money held in State Savings and prize bonds are I am informed a first obligation of the Irish Government ( source - see below ).

Given that DIRT has increased and PRSI is on the way on interest earned now seems a good time to get out of the traditional bank deposits and jump into State Savings vehicles, here is the incentive as I see it...If these are a first obligation then they are repayable in full and rank alongside Irish Government bonds, Irish Govt treasury bills and all financial products that form part of the national debt of Ireland, If a bank levy is introduced on deposits then only the bank depositors get that haircut.

Investments made before end of year should avoid PRSI ( speculating here )

Any views on this as a strategy apart from the obvious I wouldn't lend money to Ireland response given credit rating etc ...

Latest news is that Cyprus depositors with over €200k could be looking at a 25% haircut ( source RTE News )

** Source - I have a letter from the prize bond company dated January 2011 stating this when I asked how safe my investment in prize bonds was.
 

They could be paid back in full if the government had the resources to do so, but by definition when a country goes bankrupt it does not have the resources to do so... There are countless things government can do in a crisis to state borrowings, do some googling about what happen in the past.

The only thing you can do with financial risk is diversify to reduce the risk. Spread your money out over different products and leave it at that.
 
Now when Granny kept her money under the mattress they said She was crazy! Turns out Crazy Granny may have been right
 
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Madangan said:
Now when Granny kept her money under the mattress they said She was crazy! Turns out Crazy Granny may have been right
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Well lets see:
- There is still devaluation or withdrawal of the currency (good way to take a bit of the savings as well)
- No income
- Inflation
- Theft
 
Jim2007 said:
Well lets see:
- There is still devaluation or withdrawal of the currency (good way to take a bit of the savings as well)
- No income
- Inflation
- Theft
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Agh come on Jim, I lived in Switzerland for a number of years and I can still see a joke or sarcasim when I see it!

At least Granny knew the risks and could take some protections against it-but theft by the stoke of a pen-no one can take steps against that. Call it normal risk or tax-but when a Bank or Government messes up so badly on matters they are supposed to be expert at, that innocent depositors have to bail them out-thats theft. Cyprus, Ireland, it dont matter.

Even in Switzerland, doing that would draw peoples ire! I once seen a man loose it because a tram was late by a few mins-what would he do if his money was taken by the state to bail out UBS or Credit Suisse? At least in Switzerland, the people would probably get to vote on it-seeing as they vote on allowing minartes and other lesser imortant things.
 
Safety of Deposits

I have to agree that listening to that interview with Ciaran Lynch on the Pat Kenny show was frightening. Its even more scary when you are a financial retard like myself.
Can anyone tell me is there any action a depositor can do to protect his or life savings?. I have my life savings 300K with Rabo Bank as I regard security more important than interest, but if the Irish government decided to take a similar action to the Cypriot government, security is not an issue. Also would state savings or gold be subject to such a raid? Any advice would be greatly appreciated.

Regards Worried
 
Pastorius said:
Can anyone tell me is there any action a depositor can do to protect his or life savings?.
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In short, no. Think about -- if you're an Irish government in the same boat as the one in Cyprus, your aim is to raise the money needed to fund the bailout. What are you going to do? Turn around and say "well, we had a great plan but those crafty depositors figured out a way to hide their funds from us"?

No, you are going to second guess any steps depositors might take and implement measures to defeat them. Put your money abroad? There's already laws requiring you to declare it. Government could just tell you that there is x% tax due on it. For anything you can think of (including State savings and gold), the government can find you out and tax you. They can even take your money without taxing you -- by introducing a new currency and devaluing it. If the government wants your money, they will get it, unless you want to take a lot of other risks, and become a criminal.

To be honest, I would just relax about it. Life is too short to be worrying about eventualities that are still fairly remote possibilities. If the worst comes to pass, there will be nothing you can do anyway, so all your worrying will be in vain. I would even say you might be too cautious -- I understand your going with Rabo (and I have partly done so myself) but up until a few months ago you were foregoing a lot of interest for what was only institutional risk ... for certain risks such as a euro exit or deposit tax, Rabo wouldn't be any safer than any other bank.
 
Very good post, dub nerd. My thoughts would be similar. I understand the worry that the OP and others feel as I have had major worries myself but strangely this time, I'm not too worried. If the "burning" of Cypriot deposit holders is limited to those with more than the guaranteed amount then I'm not worried at all.

Worry and fear can result in irrationality. During one of the first Eurogeddon crises I was really bad and thought I was going to lose a lot of money. I was pretty close to withdrawing over 65k out of one of my accounts and buying a new BMW 530d with it, even test drove the car and was thinking of options and colours. The idea was that if the money was going to disappear into thin air I might as well treat myself to something nice with it before that happened. Thankfully I did not spalsh out as in the cold light of day the stupidity of this idea was apparent.

Some people have cost themselves a lot of money by spraying it around into "anything but the euro" and "anything but Irish banks/Ireland" without thinking things through or knowing what they're doing. Even some professionals have gotten things badly wrong and amateurs think they can do better? The likes of Jill Kerby and the media generally thrive on this hysteria and they are a factor in creating it. While people like Jill can sometimes call things correctly, at other times they're wrong. If I had followed some of Jill's predictions on gold, the euro/dollar exchange rate, gold, Swiss francs etc. I could well be down tens of thousands at this stage.
 
Latest news: 20% tax on deposits above 100K Eur at Bank of Cyprus, 4% tax on same level of deposits at the other Banks in Cyprus. If that's the final agreement then some consistency in the deposit protection scheme is preserved...
 
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