Ivan Yates: "We bailed out the banks..."

The core point of Brendan's post if that the banks were not bailed out, the bondholders and depositors were.
Does anyone disagree with that?

Ivan Yeats and his personal affairs are a distraction from that point.
 
Just my tuppence worth.


I do think it is shallow to lay blame at Lehmans, Ivan Yates, or any other particular individual entity or person. Lehmans was nothing more than the first domino to fall in what I would consider the largest legally facilitated ponzi scheme ever.

The Yates family loan is a typical example. The loan was based on a valuation of a property which in itself was overvalued – typical ponzi effect.

The bank would/should have known this, but they still facilitated the loan anyway.

Perhaps the regulator should have stepped in? But for what reason? For all intents and purposes lending on the back of over-valued properties was perfectly legal and above board.

This was the system, and as far as I can understand, it still is.

As can been seen from the Drumm/Anglo trial, when it came to the auditing the paperwork everything was above board and legal. There was no crime scene. It took other evidential material, such as the Anglo Tapes, to assist the prosecutors to pursue a criminal case.

As for the expression “we bailed out the banks”, I would agree with Brendan, it is meaningless and somewhat inaccurate. A truer expression would be that we (the taxpayers via the State) bailed out the banking system – or even more accurate again, we (taxpayers) are now paying the price (or held liable to pay) of a laissez faire banking system that was facilitated by law-makers and regulators to proceed as they saw fit.

The international banking and financial system is corrupt to the core. The litany of bank failures, banking frauds and criminality and bank rescues in the 18 years of the 21st century already outstrips the total amount for the entire 20th century, both in terms of frequency and in monetary scale.

The sticking plaster that is QE is apparently due to be stripped off over the coming year or two. My guess is that another one will need to replace it.
 
Delboy said:
And what happened when the banks tried to enforce their collateral? Thats the point I'm making
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Didn't they get it? I was reading a few months ago that they got something off (family farm I think??) off the Bankruptcy Trustees in the UK . Think there are still court cases going on.
 
Sunny said:
Didn't they get it? I was reading a few months ago that they got something off (family farm I think??) off the Bankruptcy Trustees in the UK . Think there are still court cases going on.
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https://extra.ie/2018/01/30/news/irish-news/ivan-yates-aib-high-court
Hard for a bank to function as a bank in this country!

* not that I have any sympathy whatsoever for Banks and their carry-on during the madness
 
Purple said:
The core point of Brendan's post if that the banks were not bailed out, the bondholders and depositors were.
Does anyone disagree with that?

Ivan Yeats and his personal affairs are a distraction from that point.
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Q Who were the bondholders ?

A Mostly other Financial Institutions.

We bailed out the banks, make no bones about it. I agree with The Big Short that it would be more accurate to say the banking system, but I am keeping it simple for you to understand Purple.
 

But the thing is, the vast vast majority of Bank liabilities were not bonds, they were deposit accounts & current accounts. The bondholders only got bailed out because the needed to bail out the regular joes and irish businesses with cash in the banks.
 
“Keeping it simple” is the excuse used by the likes of Ivan Yates, Sinn Fein, People who never made any Profit etc for saying that Banks (and Bankers) were “bailed out”. In reality if the main Banks were let go to the wall, it is depositors who would have been the big losers. The protest against paying a tiny water charge would have been dwarfed had all citizens had their bank accounts frozen (or left to wait on the Government guarantee to kick in). Remember the week on the Joe Duffy show where he effectively encouraged a run on the Banks.
Yates still displays his anger at the Banks for daring to seek him to repay his borrowing. Whilst many Banks did over- lend, nobody forced Yates (and others) to borrow the money to finance his business expansion. Why do I have to pay for Yates’ profligacy?
 

Conan you have to pay because you as an individual simply do not matter. The Government was heavily lobbied by the Banks for the State Guarantee at this time. The Government could easily have grown a pair and let Anglo go to the wall, after all, they were far from been a systemically important bank (3 or 4 branches at max). If I owned a factory making something and became hopelessly indebted, the bank would call in the receiver, sell any assets and move on. When the banks became hopelessly indebted they went to the Government (which was democratically elected by the people) and got a guarantee. Do not blame Ivan Yates for attempting to better himself, blame the banks for recklessly lending to him or indeed the Government for guaranteeing the banks behaviour in this regard.
 
Ides

You don't seem to understand what happened.

The government guaranteed the depositors and the bondholders.

The reason they had to do this is because the banks had recklessly lent and borrowers had recklessly borrowed.

But the banks were not bailed out, it was the depositors and bondholders. Or as Shortie says, the banking system was bailed out.

I don't blame Ivan Yates for going bankrupt - I would have done the same myself. But I do blame him for his excessive borrowings.

And he should not be saying "We bailed out the banks". He should be saying " The taxpayers bailed out the depositors and bondholders because guys like me were unable to repay our loans"

Brendan
 
Brendan,

If no one borrowed, banks would go bust. Credit is the lifeblood that fuels finance, without it, the system grinds to a halt. I understand what happened at this time better than most. All entrepreneurs are risk takers, without same, everything would stay static. Credit comes in cycles just like recessions, if Ivan Yates had borrowed at the start of the cycle and paid off his loans and before the crash, we would not be having this conversation.

I will use the analogy of Jack Kennedy in the USA. A shoeshine boy told Mr Kennedy which stocks to invest in. Within a week of this, he had liquidated his entire holdings. A week later, the Great Depression came and Jack Kennedy rebought stock at rock bottom prices and became one of the richest and most powerful men in America at the time. He got his son elected as President of America.

Timing is everything.

I reiterate, no one should blame people like Ivan Yates for attempting to improve their lot by borrowing monies to expand their business, the banks had risk weight analysis departments, credit risk departments, forecasting economists etc. (all of whom were on large salaries). They should have known better!

The Government of the time, who gave them the comfort of the State Guarantee should have known better. Your kids, kids and in turn their kids, will be paying for this comfort blanket.
 
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Going bankrupt is ok then? We all know the law allows it but it's morally wrong and leaves an awful lot of good people up the swanny and their families too. Yates owed people money and if it was owed some of the people that think bankruptcy's ok, they might have a different view of things.
 
Of course it is ok to go bankrupt. Most entrepreneurs fall flat on their faces before they reach success.
Not that success is guaranteed by the way, so every time I pass a beggar on the street I do wonder - someone too lazy to do a proper days work? Or someone who did their best but ended up on the wrong side of a financial circumstance? Or someone who hardly ever had a chance to begin with?

The laissez faire banking system that prevails is anointed as the epitome of free market capitalism. And in many respects the cheerleaders of this system can point to great successes across the globe - the lifting of billions out of absolute poverty, the innovation of technologies, the advancements of science and medicine.

But the truth is, all of these progressions are severely thwarted from their actual potential when the money men and women get a sniff of profit.

I don't blame them. Who wouldn't?
Keep pumping the millions, billions and now trillions...eventually the dice will roll in your favour, I like a bet myself.
However in the case of the global banking cartel, the suckers working the hours will pay. And even better, they will fight amongst themselves.

But surely that is where society, through goverance of people, by the people, for the people intervenes?
Surely as a society we can all generally agree that a starving child or homeless family is wrong?
That a sick elderly person needs healthcare and dignity in their final years and days?
The healthcare workers deserve a decent living and the opportunity of a prosperous future?
That ordinary people standing at assembly lines, or as is more likely these days sitting at workstations, deserve an opportunity to start a family, afford a home...a car, a holiday?
If not, what is the point of all this economic growth?
Otherwise, is a democratic society based on true socialist values of fraternity, liberty and equality just a fantasy?

Vive la Républic!
 
noproblem said:
Some like to think we have a democratic society, probably suits them to do so.
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Could be a case of crossed wires here?

In the normal course of affairs, to quote Beckett - Ever tried, Ever failed, no matter, try again, fail better.
I take that to mean to endeavor, pursuit, innovate...if it all falls apart, get up, try again etc...

In the 2000's after 9/11, there was so much money pumped into the financial system that Becketts phrase could have been altered to...Ever Tried, Cant fail, If you do, Try again....See! Gravy Train!...Its a New Paradigm!!

Focusing on individual opportunism and being critical of the outcome is futile, probably to the same extent that buying a Lotto ticket is considered just a bit of 'fun'.
 
Yea, that sounds very like Jack Kennedy's version of what happened. I think most people know it's BS.

Nobody should be criticised for taking decisions based on a sound and well researched reasoning which contain an element of risk. People taking massive risks, literally betting the Farm, when there's no need to should be criticised. I see no difference between what he did and the people who kept borrowing to buy property against the capital in the last property they borrowed. I know a Tiler who, during the boom, had 6 rental properties and borrowings of over €2 million. Should he not be blamed for attempting to improve his lot?

(Please remember to keep your answer simple for me as it seems you know much more about this than the rest of us and I was too stupid to see that by reading your previous posts. In fact I thought the opposite; silly me!)


IdesofMarch said:
The Government of the time, who gave them the comfort of the State Guarantee should have known better. Your kids, kids and in turn their kids, will be paying for this comfort blanket.
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Absolutely; what we did and are still doing is forcing our children to pay for our mistakes. It's disgraceful.
 

I've heard similar story about buying stocks of whisk(e)y before Prohibition.
 
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