How The Irish Saved Civilization, — Again !!! Options Rating

[Jon Awbrey]

    The figure seated on a large boulder at the foot of a round tower was that of a broadshouldered deepchested stronglimbed frankeyed redhaired freely freckled shaggybearded widemouthed largenosed longheaded deepvoiced barekneed brawnyhanded hairylegged ruddyfaced sinewyarmed hero.  From shoulder to shoulder he measured several ells and his rocklike mountainous knees were covered, as was likewise the rest of his body wherever visible, with a strong growth of tawny prickly hair in hue and toughness similar to the mountain gorse (Ulex Europeus).  The widewinged nostrils, from which bristles of the same tawny hue projected, were of such capaciousness that within their cavernous obscurity the fieldlark might easily have lodged her nest.  The eyes in which a tear and a smile strove ever for the mastery were of the dimensions of a goodsized cauliflower.  A powerful current of warm breath issued at regular intervals from the profound cavity of his mouth while in rhythmic resonance the loud strong hale reverberations of his formidable heart thundered rumblingly causing the ground, the summit of the lofty tower and the still loftier walls of the cave to vibrate and tremble.

—James Joyce, Ulysses

[Herschelkrustofsky]

The irony, dear friend, lies in the fact that the UK claims already to be Christian, and in fact possesses a quasi-theocracy where the monarch is also the head of an established church.

[Milton Roe]

The irony, dear friend, lies in the fact that the UK claims already to be Christian, and in fact possesses a quasi-theocracy where the monarch is also the head of an established church.

Clearly the Christian thing to do, is let the Irish go fish, as happened in the potato famine. It beats the Cromwell treatment, at least.

Though I think it's safe to say that while the Irish are in trouble, they're doing better, relative to the UK and Europe now, than they ever have in history. They just spent themselves broke with retirement and entitlement programs, like the rest of Europe. And business is bad all over. Ouch, but that can be fixed. It's not like their kids are so short of vitamin C that they just sometimes fall over and die. Which used to happen happen to the Irish not that long ago.

[Herschelkrustofsky]

Though I think it's safe to say that while the Irish are in trouble, they're doing better, relative to the UK and Europe now, than they ever have in history. They just spent themselves broke with retirement and entitlement programs, like the rest of Europe.

Bear in mind that Ireland doesn't want or need a bailout. It's the banks that are bankrupt, and most of them aren't even Irish banks. The Irish are being asked to take a truly staggering cut in their standard of living in order to co-sign a bailout of foreign financiers.

[Alison]

Bear in mind that Ireland doesn't want or need a bailout. It's the banks that are bankrupt, and most of them aren't even Irish banks. The Irish are being asked to take a truly staggering cut in their standard of living in order to co-sign a bailout of foreign financiers.

This guy knows the truth.

[TungstenCarbide]

This guy knows the truth.

grumpy old guy is right but missing part of the story. Much of economics is driven by psychology. After the great depression people thought credit was evil. You wanted a car ... save your money and pay cash. Nowadays most people choose to live their whole lives with large credit loads.

Easy credit is like a drug, some people can't get enough of it and end up bleeding themselves dry. Governments have been making credit easier and easier for decades.

This post has been edited by TungstenCarbide: Fri 10th December 2010, 2:11am

[Alison]

This guy knows the truth.

grumpy old guy is right but missing part of the story. Much of economics is driven by psychology. After the great depression people thought credit was evil. You wanted a car ... save your money and pay cash. Nowadays most people choose to live their whole lives with large credit loads.

Easy credit is like a drug, some people can't get enough of it and end up bleeding themselves dry. Governments have been making credit easier and easier for decades.

That's also true. Interesting article here which shows the situation in 2004. Back then, they were stating that nearly 43% of American families spend more than they earn each year. So yeah - not good, but where does the blame lie; government or wide-eyed, gullible people?

"Call 1-800-YOU-FAIL to get the credit you deserve!"

Deserve?? How many times have they played those adverts on TV? And they're always aimed at people with already bad credit ratings

[Milton Roe]

This guy knows the truth.

grumpy old guy is right but missing part of the story. Much of economics is driven by psychology. After the great depression people thought credit was evil. You wanted a car ... save your money and pay cash. Nowadays most people choose to live their whole lives with large credit loads.

Easy credit is like a drug, some people can't get enough of it and end up bleeding themselves dry. Governments have been making credit easier and easier for decades.

That's also true. Interesting article here which shows the situation in 2004. Back then, they were stating that nearly 43% of American families spend more than they earn each year. So yeah - not good, but where does the blame lie; government or wide-eyed, gullible people?

"Call 1-800-YOU-FAIL to get the credit you deserve!"

Deserve?? How many times have they played those adverts on TV? And they're always aimed at people with already bad credit ratings

Sigh. The Irish situation is a duplicate of the US one, already much-discussed here. During the 2000-2007 housing bubble, both the US and Ireland (I mean the good people of both countries) borrowed a lot of money against their inflating housing prices. The new financial instruments (which HK calls generic "derivatives") made it easier than ever to convert real estate "paper-equity" into cash. One of those derivatives was insurance on securitized mortgage backed loans. You could even buy stock in companies that sold insurance on securitized mortgage backed loans. Like AIG. Level piled upon level of speculation there, and it all collapsed in 2008 when the markets simply could not take any more, and all the loaned out money on housing that wasn't worth it, came due to be repaid. In both the US and Ireland, since the capital markets around the world are all connected too well now for any to be isolated.

2004 was right in the middle of this. How could 43% of American families (or Irish families if you like, because it was all the same there) spend more than they earned each year? No problem in 2004 at the height of this rising housing bubble. It wasn't going all on credit cards, but coming out of houses being used like ATM machines, as second and third mortgages became available. There even existed plastic cards that gave you money from a loan against your house (a home equity line of credit-- try to get one of THOSE now). Nobody cared about this, before the housing equity values (on paper) were going up faster than the home loan borrowers were spending the money; it was sort of like spending money you were making on your stock account in your portfolio. Except that everyody knows such rises in stock value are imaginary numbers until you lock in the earnings by actually selling the stock. In housing speculation people weren't actually selling their houses even though they were speculating with them in just the same way as with stock-- they were just watching their paper value rise, and borrowing against THAT, and spending it.

When it all came crashing down in 2008, people owed more on their houses than they were worth. In Ireland, too. HK thinks the banks got all that money, but he's wrong. The people who borrowed against the housing market, which means the home-owners, got most of that money. Letting banking systems collapse now that they own the titles to all the real estate left behind (the "ash" of this bubble), is not going to fix this problem. The blame for all this is everywhere. A lot of it is with homeowners who had a great time with the money they "made" speculating against their own home prices as they rocketted up.

If you can let your banking system collapse, which means that your industry is not far behind, then your economy goes down and everybody is out of work. Not just 10% but 25% or more. They tried that 1929-1932 in the U.S., and it didn't work so well. Tight-money made the depression worse. Bernanke, a student of the depression, is therefore now trying the opposite, which is to put all the housing credit default on the government credit card. So far it has kept the US economy from imploding.

Now it's Ireland's turn. They (like the U.S.) have a total government debt of about 100% of their yearly GDP. But this next year, if they bail out all the housing market lenders (and yes, most of them are banks, who will foreclose on the houses) that will go up to 133% of GDP. They will have spent 33% of a year's GDP in a SINGLE YEAR, bailing themselves out. The US did almost that last year, but it put them only up to 94% GDP. Ireland's debt position is worse.

But they don't really have any choice. If they allow the housing sector, mortgage lenders and banks to take the default on all that credit, there won't be any more banking in Ireland. Which means no more Irish economy, no more Irish industry, and no more Irish miracle. So they're going to have to do what the U.S. did, or else have a Great Depression of 1929. Were it not for the suffering that would cause, I'd wish that they actually would do that, just to teach HK and LaRouche a lession that they seem to have failed to learn from 1929-32.

[TungstenCarbide]

This guy knows the truth.

grumpy old guy is right but missing part of the story. Much of economics is driven by psychology. After the great depression people thought credit was evil. You wanted a car ... save your money and pay cash. Nowadays most people choose to live their whole lives with large credit loads.

Easy credit is like a drug, some people can't get enough of it and end up bleeding themselves dry. Governments have been making credit easier and easier for decades.

That's also true. Interesting article here which shows the situation in 2004. Back then, they were stating that nearly 43% of American families spend more than they earn each year. So yeah - not good, but where does the blame lie; government or wide-eyed, gullible people?

"Call 1-800-YOU-FAIL begin_of_the_skype_highlighting              1-800-YOU-FAIL      end_of_the_skype_highlighting to get the credit you deserve!"

Deserve?? How many times have they played those adverts on TV? And they're always aimed at people with already bad credit ratings

Sigh. The Irish situation is a duplicate of the US one, already much-discussed here. During the 2000-2007 housing bubble, both the US and Ireland (I mean the good people of both countries) borrowed a lot of money against their inflating housing prices. The new financial instruments (which HK calls generic "derivatives") made it easier than ever to convert real estate "paper-equity" into cash. One of those derivatives was insurance on securitized mortgage backed loans. You could even buy stock in companies that sold insurance on securitized mortgage backed loans. Like AIG. Level piled upon level of speculation there, and it all collapsed in 2008 when the markets simply could not take any more, and all the loaned out money on housing that wasn't worth it, came due to be repaid. In both the US and Ireland, since the capital markets around the world are all connected too well now for any to be isolated.

2004 was right in the middle of this. How could 43% of American families (or Irish families if you like, because it was all the same there) spend more than they earned each year? No problem in 2004 at the height of this rising housing bubble. It wasn't going all on credit cards, but coming out of houses being used like ATM machines, as second and third mortgages became available. There even existed plastic cards that gave you money from a loan against your house (a home equity line of credit-- try to get one of THOSE now). Nobody cared about this, before the housing equity values (on paper) were going up faster than the home loan borrowers were spending the money; it was sort of like spending money you were making on your stock account in your portfolio. Except that everyody knows such rises in stock value are imaginary numbers until you lock in the earnings by actually selling the stock. In housing speculation people weren't actually selling their houses even though they were speculating with them in just the same way as with stock-- they were just watching their paper value rise, and borrowing against THAT, and spending it.

When it all came crashing down in 2008, people owed more on their houses than they were worth. In Ireland, too. HK thinks the banks got all that money, but he's wrong. The people who borrowed against the housing market, which means the home-owners, got most of that money. Letting banking systems collapse now that they own the titles to all the real estate left behind (the "ash" of this bubble), is not going to fix this problem. The blame for all this is everywhere. A lot of it is with homeowners who had a great time with the money they "made" speculating against their own home prices as they rocketted up.

If you can let your banking system collapse, which means that your industry is not far behind, then your economy goes down and everybody is out of work. Not just 10% but 25% or more. They tried that 1929-1932 in the U.S., and it didn't work so well. Tight-money made the depression worse. Bernanke, a student of the depression, is therefore now trying the opposite, which is to put all the housing credit default on the government credit card. So far it has kept the US economy from imploding.

Now it's Ireland's turn. They (like the U.S.) have a total government debt of about 100% of their yearly GDP. But this next year, if they bail out all the housing market lenders (and yes, most of them are banks, who will foreclose on the houses) that will go up to 133% of GDP. They will have spent 33% of a year's GDP in a SINGLE YEAR, bailing themselves out. The US did almost that last year, but it put them only up to 94% GDP. Ireland's debt position is worse.

But they don't really have any choice. If they allow the housing sector, mortgage lenders and banks to take the default on all that credit, there won't be any more banking in Ireland. Which means no more Irish economy, no more Irish industry, and no more Irish miracle. So they're going to have to do what the U.S. did, or else have a Great Depression of 1929. Were it not for the suffering that would cause, I'd wish that they actually would do that, just to teach HK and LaRouche a lession that they seem to have failed to learn from 1929-32.

I doubt that's the half of it.

Looking from a different angle, if you were a group of powerful bankers who had enormous political power at your fingertips, what kind of laws would you get your lackeys to pass to enrich yourself? Those laws would have to be based on human psychology.

You'd want to make it possible for people to load themselves up on credit, to the hilt. Then you'd want their home to hang in the balance - keeping one's home is a big motivator (these lines of credit weren't legal when I was a kid.) Then you'd want them to shoulder the maximum amount of credit for as long as possible to bleed them over a lifetime.

This post has been edited by TungstenCarbide: Sat 11th December 2010, 2:09am