I do not salute cement mixer guy
This grew out of a rant on someone's wall on facebook.
The main thing Anglo did wrong is give too many loans, overextending themselves. However, what made them fall over is that too many of these loans are not being paid back. They renegotiated payback schedules, eg just pay back the interest. Some property developers couldn't even manage that. So their loan grows instead of shrinking. Meanwhile, Anglo, and the other banks in the same situation, have to pay interest and principal on the loans they took from other banks in order to extend the loans in the first place.
Hindsight being 20:20 and all that, it is obvious now that these unpaid property developer loans were a high risk gamble, but everyone was too optimistic back then. Developers, banks, government, media, buyers. And, of course, the regulator who didn't regulate. The bank should have been more careful giving loans, but the property developers also should have been more careful investing huge amounts of money in a bubble*. Anglo are to blame for having so many high risk loans, but for each loan not being paid back, there is someone or a company who took the gamble on borrowing that much money. And that someone or company (or both, if a director personally guaranteed the company loan) still owes that money. Each of those bad loans has sunk Anglo, and now, therefore, us, into further debt. Each one that is paid back lifts us a little bit out.
Many, many people are angry at Anglo. We're angry that we're being made to pay for their and their lendees' gamble that didn't pay off.
Why is cement mixer guy angry? Is he just a simple tax payer who doesn't want to pay for other people's bad loans?
It seems to me he's one of the bad loan people. One of toxic loan people. He owes Anglo millions. €3.5 million.
Joe McNamara borrowed that money and can't pay it back**. Yes, Anglo were reckless in giving loans, but the developers were also taking a gamble and should still take responsibility for what they borrowed. There's blame on both sides, as well as elsewhere. I'm sure they're being harsh on him now, and he can't*** pay it back, but is it any worse than what someone who borrowed too much to buy their house and has lost it is suffering? He complained that Anglo wanted to sell his properties and he would still owe the shortfall**** That's what happens. That's what happens someone who has one house they can't pay the mortgage on. The bank takes what it can and you still owe the rest. If he's not capable of understanding that, or paying for someone to explain it for him at the time he signed the contract, he has no business being a property developer, or any other kind of high money investment gamble person.
And it's not just banks he hasn't been paying back. Back in 2006, he took over a 32 apartment development that still owed development fees to the city council. He was unable to pay that year's instalments of the fees*****.
Despite already being overextended, he still tried to get permission to build more. A 406 house project was refused planning permission in 2007# Ok, I don't know when he and his partner applied and if it was before he was unable to pay 2006 bank interest and council development fees. Refused late Feb 2007 would mean they applied in late 2006. Imagine if it had been granted. He'd owe even more now. But wait - already being incapable of paying what he owes before that doesn't stop them. They applied again in 2008## And that wasn't the only development he applied for in late 2006###. He might even still be at it ####
I'm not saying he's a bad person. He built houses in Cape Town, and has contributed to other charitable causes; is involved in the local community. And he's small potatoes as developers and developer loans go. He's not Liam Carroll, who owes near 1000 times as much. And I'm not denying that the government, banks, media, people who bought overpriced houses, non-regulating regulators and out-and-out fraudsters contributed as much to the bubble and burst as developers. I had a whole other rant I never posted about the government that would have said a lot about the Bacon report if I'd managed to read all I wanted to read about it before writing. But the property developers do have to accept their own fair share of the blame, and judging by his cherry picker sign, well, he's been cherry picking (sorry): http://www.politics.ie/current-affairs/129501-picture-anglo-irish-bank-morning.html
His friend says "What about arresting those who caused the financial mismanagement that has brought the country to the brink of ruin?"&* As far as I can see, it's his own financial mismanagement that has brought himself to ruin and contributed in a small way to ours. He hasn't done anything as outrageous as an Anglo director taking huge loans and transferring them around so they're hidden, but if that and other scandals hadn't happened, he would still owe the money he owes. He's no victim of Anglo's bad practices. He's part of the problem.
*This is where I blame government and media. Of course it was a bubble. New paradigm? WTF?
** Christ. I'm sure I saw something the other day about him not being able to pay back just interest in 2006. Can't find it now. Did I get confused with council development fees?
*** I've been told he's unemployed for the last year or so (not surprising - much less call for property developers now) and isn't getting social welfare. Why isn't he? Not that that would be much use in paying back €3.5 million anyway.
**** http://www.independent.ie/national-news/courts/storming-the-gates-2359024.html
***** http://thestory.ie/2010/08/01/all-is-not-well-in-galway-city-council/
# http://www.independent.ie/unsorted/property/reduced-supply-of-new-homes-looks-set-to-fall-further-47551.html Also an example of media responsibility. There were already plenty of vacant dwellings well before 2007. WhyTF is reduced supply of new homes being seen as a bad thing in early 2007?
## http://www.munster-express.ie/local-news/further-409-homes-being-proposed-for-gracedieu/
### http://www.independent.ie/unsorted/property/planning-round-up-73107.html
#### http://www.galwaycity.ie/text/AllServices/Planning/Publications/PreDraftDevelopmentPlanSubmissions/TheFile,5804,en.pdf Search for McNamara or McGinty.
The main thing Anglo did wrong is give too many loans, overextending themselves. However, what made them fall over is that too many of these loans are not being paid back. They renegotiated payback schedules, eg just pay back the interest. Some property developers couldn't even manage that. So their loan grows instead of shrinking. Meanwhile, Anglo, and the other banks in the same situation, have to pay interest and principal on the loans they took from other banks in order to extend the loans in the first place.
Hindsight being 20:20 and all that, it is obvious now that these unpaid property developer loans were a high risk gamble, but everyone was too optimistic back then. Developers, banks, government, media, buyers. And, of course, the regulator who didn't regulate. The bank should have been more careful giving loans, but the property developers also should have been more careful investing huge amounts of money in a bubble*. Anglo are to blame for having so many high risk loans, but for each loan not being paid back, there is someone or a company who took the gamble on borrowing that much money. And that someone or company (or both, if a director personally guaranteed the company loan) still owes that money. Each of those bad loans has sunk Anglo, and now, therefore, us, into further debt. Each one that is paid back lifts us a little bit out.
Many, many people are angry at Anglo. We're angry that we're being made to pay for their and their lendees' gamble that didn't pay off.
Why is cement mixer guy angry? Is he just a simple tax payer who doesn't want to pay for other people's bad loans?
It seems to me he's one of the bad loan people. One of toxic loan people. He owes Anglo millions. €3.5 million.
Joe McNamara borrowed that money and can't pay it back**. Yes, Anglo were reckless in giving loans, but the developers were also taking a gamble and should still take responsibility for what they borrowed. There's blame on both sides, as well as elsewhere. I'm sure they're being harsh on him now, and he can't*** pay it back, but is it any worse than what someone who borrowed too much to buy their house and has lost it is suffering? He complained that Anglo wanted to sell his properties and he would still owe the shortfall**** That's what happens. That's what happens someone who has one house they can't pay the mortgage on. The bank takes what it can and you still owe the rest. If he's not capable of understanding that, or paying for someone to explain it for him at the time he signed the contract, he has no business being a property developer, or any other kind of high money investment gamble person.
And it's not just banks he hasn't been paying back. Back in 2006, he took over a 32 apartment development that still owed development fees to the city council. He was unable to pay that year's instalments of the fees*****.
Despite already being overextended, he still tried to get permission to build more. A 406 house project was refused planning permission in 2007# Ok, I don't know when he and his partner applied and if it was before he was unable to pay 2006 bank interest and council development fees. Refused late Feb 2007 would mean they applied in late 2006. Imagine if it had been granted. He'd owe even more now. But wait - already being incapable of paying what he owes before that doesn't stop them. They applied again in 2008## And that wasn't the only development he applied for in late 2006###. He might even still be at it ####
I'm not saying he's a bad person. He built houses in Cape Town, and has contributed to other charitable causes; is involved in the local community. And he's small potatoes as developers and developer loans go. He's not Liam Carroll, who owes near 1000 times as much. And I'm not denying that the government, banks, media, people who bought overpriced houses, non-regulating regulators and out-and-out fraudsters contributed as much to the bubble and burst as developers. I had a whole other rant I never posted about the government that would have said a lot about the Bacon report if I'd managed to read all I wanted to read about it before writing. But the property developers do have to accept their own fair share of the blame, and judging by his cherry picker sign, well, he's been cherry picking (sorry): http://www.politics.ie/current-affairs/129501-picture-anglo-irish-bank-morning.html
His friend says "What about arresting those who caused the financial mismanagement that has brought the country to the brink of ruin?"&* As far as I can see, it's his own financial mismanagement that has brought himself to ruin and contributed in a small way to ours. He hasn't done anything as outrageous as an Anglo director taking huge loans and transferring them around so they're hidden, but if that and other scandals hadn't happened, he would still owe the money he owes. He's no victim of Anglo's bad practices. He's part of the problem.
*This is where I blame government and media. Of course it was a bubble. New paradigm? WTF?
** Christ. I'm sure I saw something the other day about him not being able to pay back just interest in 2006. Can't find it now. Did I get confused with council development fees?
*** I've been told he's unemployed for the last year or so (not surprising - much less call for property developers now) and isn't getting social welfare. Why isn't he? Not that that would be much use in paying back €3.5 million anyway.
**** http://www.independent.ie/national-news/courts/storming-the-gates-2359024.html
***** http://thestory.ie/2010/08/01/all-is-not-well-in-galway-city-council/
# http://www.independent.ie/unsorted/property/reduced-supply-of-new-homes-looks-set-to-fall-further-47551.html Also an example of media responsibility. There were already plenty of vacant dwellings well before 2007. WhyTF is reduced supply of new homes being seen as a bad thing in early 2007?
## http://www.munster-express.ie/local-news/further-409-homes-being-proposed-for-gracedieu/
### http://www.independent.ie/unsorted/property/planning-round-up-73107.html
#### http://www.galwaycity.ie/text/AllServices/Planning/Publications/PreDraftDevelopmentPlanSubmissions/TheFile,5804,en.pdf Search for McNamara or McGinty.