Monday, 25 April 2011
The no luck of the Irish
The thing with the Orish (not the North) situation is how utterly fucked up it all is in ways that provide an exaggerated insight into how shit was here to an extent that makes this report into what happened quality reading. So like Ireland also had a property bubble to be sure (to be sure) and greedy fuckwit former building societies that got out their league lending like morons to golden circles of businessmen/property developers, but then it also had bankers and politicians who did things just that bit more blatantly than here when it came to cheap credit, all expenses paid, no questions asked shenanigans.
However, the biggest, fundamental, will potentially have an impact that will last for at least 5 years difference is the legal system. I recently had Ireland described to me as a “debtors paradise” by someone who’d dealt with problem loans there a coupla years back. This was because of their legal system and the way it, compared to British law, favours debtors i.e. borrowers, over lenders. And so it should you might say especially when it comes to residential mortgages people have taken out to buy themselves a home. Except the guy I was talking to had been dealing with millions of pounds that’d been lent to businesses and as he put it the delays, then the need to take things before a judge who had a thing or two to say about nasty British banks let me tell you and was teeing off next Sunday with the guy who ran the business that’d borrowed the dosh in the first place, made it an utter fucking nightmare.
Now this, as the Japanese lost decade makes abundantly clear, is a bad thing. If shit can’t get sorted out, well then shit won’t get sorted out and will instead drag on and on and on. Need a loan for a new business? Sorry, the banks are all tied up at the moment with their existing bad debts. The other thing is the terms reached on Orish agreements tend, going by the chat I heard, to be as friendly to the debtor as possible, which given so much of what's already coming before the courts involves property developers who took a punt on a bubble strikes me as a tad iffy. The context here of course is that given the Orish taxpayers have nationalised some banks, recapitalised others and put themselves on the hook for the entire system's deposit base, then what’s good for the banks is very much good for the Orish people; it's no longer the case that it's nasty bankers trying to do down some County Kerry boy made good, rather its more likely to be a pish-ripping Dublin based multi-millionaire whose transferred all his assets to his surgically enhanced peroxide wife. So perhaps the Orish legal approach to bad debt needs looking at pronto? In the meantime this provides some nice examples of the kind of shite already being seen.
Personally, I doubt any significant changhes will be made. The other thing we’ve seen in Ireland an exaggerated form is the willingness of politicians to sacrifice taxpayers for the good of the banks and their chief executives to an extent that I think (only think mind), even yer average British punter would take umbrage at. My personal favourite example of this was the way the initial haircuts on NAMA were set and only subsequently reduced after some newspapers got wind of how this government agency was planning to pay way over the odds for bank debt to help them out whereas here the Bank of England took a far more aggressive approach at the outset (compare say this with this). So nah, what I think is Orish politicians a bit sore that they never got some of the good time gravy will keep coming out with oh so tough bullshit rhetoric to wallpaper over the same ol' system wherein politicians, top bankers and big customers keep making or at least keep millions and billions and the Orish taxpayer keeps taking all the risks. And yeah, yeah, that’s the same as here except when you read about say Bertie Ahern and his boom time, Boomtown, grubby, fiver grasping antics you realise no it thankfully isn't quite.