Could NAMA give us all a break from economic woes
THESE days anyone going into the red at the bank without an arranged overdraft in place is likely to get a nasty letter and a huge fine.
Recently I set up a small overdraft limit just in case I couldn't help myself to that nice new spring coat or pair of shoes which I don't need but just have to have. No way did I want to hand out a fine of 30 or 40 to the bank in case I'd overdraw by a few pounds. The bank charged me 20 for the privilege. Now I may not go into the red, at least I will aim not to. Yet this annual 20 charge will remain until I mend my ways i.e. stop spending on fripperies or cancel the overdraft facility.
I hate wasting money like this but then I resent paying 'green' taxes which we know are not being spent on green issues but to prop up public spending. I also hate having to squander money on telephone calls which begin with 08 and that seems to be just about every organisation in the country, all set on making an extra buck at our expense. By the time you've listened to all the guff about them being allied to something like the Financial Services Association, how your call could be monitored (it's my experience they never are), and three times round some inane piece of music while you wait to be put through to an advisor you've probably added a minimum of 1 to the price of the call.
Over a year that will add up to a right little profit for the companies most of us have to phone.
How different it all works for those we presume to be rich but who in fact live off other people's money i.e what they can borrow from banks and financial institutions, the sort of people, businessmen mostly, who wouldn't dream of risking their own savings. Banks seem to love risk takers so long as they're asking for billions.
These are the sort of people who now have a way of hiving off their debts. This week six of them were named, 'jumbo borrowers' they're called who each, allegedly, owe Anglo Irish Bank one billion euro 900m) or more. That's a stonking 5.4bn in sterling.
All are developers from the south of Ireland and their debts are in the first tranche of debts to be transferred to Ireland's National Asset Management Agency (Nama), an organisation that only those in high finance would understand, so I will not attempt to explain it here other than to say it was set up to take the 'bad debts' from banks so that they can re-build their capital and start lending to ordinary people again. More tranches of bad debt from other big spenders will follow into Nama. Some of this bad debt may also come from big spenders in the north.
Quite what happens to those billions of debts which will go into this state-owned `bad debts' bank is anyone's guess. Who will pay them off, do the people who borrowed the money in the first place get away Scot-free with their debts simply 'written off', is anyone made bankrupt and refused borrowing in future? You might well ask.
I was wondering if ordinary working people with big mortgages they can no longer afford could apply to Nama to have their debts taken on.
After all what's a 100,000 mortgage to Nama when it is having to take on billions of debts from people whose greed got the better of them.
It also throws up another little query for me. Now that the state effectively 'owns' some the debts associated with places like the Shelbourne hotel, the K Club (gorgeous place, I once stayed there), Dundrum Town Centre and the Spencer Dock project does that mean we could actually go to these places and demand a free meal or a free mooring for a boat since the state gets its money from taxpayers effectively making the working people the owners of these establishments? Is that not a good theory? I might even try it one day.
According to reports the country's top 10 developers owe close on 17billion euros to Anglo Irish. One financier is said to owe 280million euro in personal borrowing. He must have thought he was a Bill Gates.
So here am I worrying about going a few pound into the red and fretting at having to pay 20 a year for an agreed overdraft while all these development whippersnappers are flying into the sunset in their helicopters leaving their debts in the care of the taxpayers no doubt to rise again in the future because borrowing mega amounts of money was so easy for them and probably will be again.
Different story for the rest of us unfortunately.
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Thursday 24 May 2012
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