Will the credit crunch make individuals more responsible?

[RMCF]

I have listened to a few radio pieces/read a few newspaper articles over recent weeks about the whole world problem and think that what a lot of commentators have been saying is so true.

Now I will admit that I have a little debt on a single credit card, but it is very manageable. But many people in the world today got themselves into big debt (outside of their mortgage which could be classed as sensible debt) because they were offered the credit.

So few actually thought to themselves, 'can I afford to take this money'? They just piled debt onto debt, and only an idiot would think that it would not have to be repaid. Have we so many idiots about?

I appreciate that the world has become so materialistic these days that people just wanted the latest decking, plasma, car, conservatory, jeans, perfume, PC, games console etc.

It is sad to hear of people with 5 or 6 credit cards max'd out at €10k on each.

One thought that was mentioned on the Last Word the other day really hit home for me. Cal Thomas happened to mention an advert that a big bank/financial institution in the US took out with tips on how to get through this crisis, and No1 was 'dont spend more than you earn'.

How simple is that?

 

[bamboozle]

the way i see it is that the banks primary goal was to generate wealth for its shareholders and they aimed to do this within the regulation that it must adhere to, the Central Bank is meant to be acting as regulator of the Irish banking system, as far as i can see there was not strong enough regulation in certain areas of banking primarily advancing credit, giving out 40 year mortgages and 100% loans was a recepie for disaster.


Also i guess the question on everyone's lips is how exposed are each of the banks to bad debts from the construction industry ...ie property developers who cannot cough up the money.

so bottom line, banks were busy making money, Central Bank should have had a tighter reign on the situation.

 

[Sunny]

the way i see it is that the banks primary goal was to generate wealth for its shareholders and they aimed to do this within the regulation that it must adhere to, the Central Bank is meant to be acting as regulator of the Irish banking system, as far as i can see there was not strong enough regulation in certain areas of banking primarily advancing credit, giving out 40 year mortgages and 100% loans was a recepie for disaster.

I think this is an important point that people are forgetting. Maybe the Green TD who called bankers 'scum' might want to look deeper into the problem. Banks did not operate in a vacum. As you say, their main goal is to generate shareholders returns while operating according to the rules of laws of the financial system in which they operate and I don't think anyone can accuse them of anything illegal so far. Every product they offered from 40 year 100% mortgages to loans on speculative land purchases were all done within the regulatory framework that they operated in. The dog on the street knew what they doing and yet suddenly you have politicians shouting abuse at them and acting all surprised for reckless lending during a property bubble that they themselves helped fuel through tax breaks etc.

The head of our Central Bank is one of the highest if not the highest paid head of any European Central Bank. I am willing to bet our financial regulator is also one of the highest paid in Europe. Where have these been over the past couple of days explaining what they have been doing for the past couple of years. Why is it that it is only now that they seem to have woken up to the fact that Irish Banks were up to their necks in property?

This is not supposed to read like a defence of banks. I just think there is plenty of blame to go around and not all of it can be directed at 'scum' bankers

 

[bamboozle]

and just for the record i'm not employed by a bank!

 

[Blossy]

I think the OP original question is the individual on the street? as in will people actually start coping on to them selves. Personally, the Celtic Tiger never called to my house, but i have an awful lot more than my mother did at my age!

I hope it def makes people more sensible,and it really highlights how stupid people were. For example there will be alot of children out there this year that got 500-1000k worth of presents EACH at christmas, that will have to do with out as much this year.

And if u ask me its a good thing! i havent lost my job, thank god, never had too much to spend, so everything stays the same expept now, i can see the M+S shoppers now next to me in the queues in Lidl/ Adli! And for that, i am grateful, im not the only one who says, i cant go 'x' cos i cant afford it this month!!


may not be a pleasant or sympathic opinion, but mine none the same, maybe people will start appreciating other things in thier life than the status they get from driving a giagantic SUV to drop kids to school!!!

now that let off a little steam hee hee!

 

[TarfHead]

.. For example there will be alot of children out there this year that got 500-1000k worth of presents EACH at christmas, that will have to do with out as much this year.

Please let that 'k' be a typo !

In general I agree. We have had a very enjoyable but expensive year, so far, with treating ourselves, based on some windfalls earlier in the year. After bring the accounts up to date, we're in the red and have agreed a budget, both presents within the family and to others, for Christmas. Nothing can be bought unless the money is already on hand.

 

[RMCF]

I think the OP original question is the individual on the street? as in will people actually start coping on to them selves. Personally, the Celtic Tiger never called to my house, but i have an awful lot more than my mother did at my age!

I hope it def makes people more sensible,and it really highlights how stupid people were. For example there will be alot of children out there this year that got 500-1000k worth of presents EACH at christmas, that will have to do with out as much this year.

And if u ask me its a good thing! i havent lost my job, thank god, never had too much to spend, so everything stays the same expept now, i can see the M+S shoppers now next to me in the queues in Lidl/ Adli! And for that, i am grateful, im not the only one who says, i cant go 'x' cos i cant afford it this month!!


may not be a pleasant or sympathic opinion, but mine none the same, maybe people will start appreciating other things in thier life than the status they get from driving a giagantic SUV to drop kids to school!!!

now that let off a little steam hee hee!

Yes I was originally talking about the ordinary punter in the street, the people who took all the cheap credit they could get their hands on and didn't give a damn about how they were going to pay it back.

I think this country got so materialistic and greedy it was untrue. People just had to have a brand new car and all the electronic goods to match cos their friends had them.

It will now all come home to roost.

I generally was fairly tight on credit. OK I did do the 2 or 3 weekend trips abroad each year, but this was always done out of whatever was in my current account. I never borrowed vast sums to do it or put it on a credit card. I own one credit card and there's about 600 on it. I deliberately keep some money on it as I believe its not a bad thing to have some debt like this - at least I will have a record of always paying back money each month without any problems. Keeps your credit rating high!! Also never have had an overdraft on my current account. Savings are nothing major, only a couple of grand.

I would hate to be in debt to my eyeballs now like many others.

I definitely think we will see a lot of people reigning in their finances now, and I can see a really bad Xmas for the retail trade. Especially after the budget - its going to be a tough one.

 

[Simeon]

Most people will cut their cloth etc. But a small few will rearrange the deckchairs. By and large people act in a responsible manner when things are explained. Except in elections.

 

[annR]

I think people have lost the run of themselves when it comes to buying gifts for weddings, babies, confirmations etc. and they won't be able to afford it anymore. Having gotten engaged, married and had a baby in the last couple of years, I've seen how much people will spend on gifts. They're very very generous and I don't want to be ungracious, I love getting gifts. However, there's been times where I've thought it's crazy and completely unnecessary for someone to come along and fire E200 or whatever at us just cos we made an announcement. Some small token would have been fine. I've felt bad about it as well as often it might be someone who I know cannot afford it. And people have bought *enormous* gifts for the baby. . . . way out of proportion and much more than I would ever give them if the situation was reversed. I don't wish hardship on people but I will be glad to see the back of the craziness with gifts. And that's from someone whose house is full of gifts.