So the seismic shift that was brought home last June was a seismic figure of our leaders’ imagination. It is a shame that they do not use their significant powers of imagination to put a realistic plan together to get this country out of the depression we are in right now.
My biggest concern now is not how we are going to get back the money we paid into our Banks and then out the back door to private investor and banks in Germany, France, UK, US and further afield. The real worry now is where we are going to get the money to give the banks the second bailout or hopefully “bail in” this time. When I talk about a “bail in” I mean when funds are put into the banks they actually stay in the banks and are used to give people the debt forgiveness they need.
I have taken a short unscientific look at our ever growing client list and a sticking thing to come from the review is that over 65% of them have come to us BRFORE they have gone into arrears. They know they are heading into trouble because of falling salaries, falling rental income and falling savings. Another big reason for people coming looking for help is the ending of interest only periods and usually that means that repayments are going up by as much as 3 times when income is falling.
So from a banking perspective the numbers they give us about accounts being in difficultyare considerably more then they admit. It is our view that there are two reasons for this, firstly as described above they do not know of the pending trouble of people and the second they massage the published figures anyway!
So it seems the figures given by the central bank recently about 10% of mortgages being in difficulty are grossly underestimated (Central Bank report March 2012) and/or reported. So whatever about recovering the €64b paid into the banks to date to “save” them I believe the next €20b or so for the impending “bail in” is the real problem.
The first €1b of that €20b could be gathered on Monday 1st October by refusing to pay the AIB bond which is up for payment. That would be a good start!
Paul C Carroll Accountant