AIB Interest rate Increase part of the Enda Kenny “Celtic Comeback”??

The increase by AIB in their mortgage interest rates last week is another element of the scam that is continuing in this country by the elite professional and political classes. These classes are described so well in the recently published book by Shane Ross and Nick Webb The Untouchables.

Another element of the scam is that we must continue to pretend that things are getting better in Ireland. The economy is recovering, people are slowly recovering, property prices are stabilising, unemployment is stabilising, etc..  This is being peddled because it is important for “the Untouchables” to create this illusion about Ireland being the Good Boy in the class of austerity so their position of overpaid offices and professional fees continues.

How on this earth can it be justified that the bank owned by the state is allowed to put up interest rates on people who are already struggling except for the creation of an illusion that AIB will recover. We all know that the increase in the interest rates will make AIB worse and not better. It will simply cause more people to fall into arrears. It may also cause some people to reflect on why at all they should be paying anything on a loan which is possibly in excess of 50% greater then the value of the property it is on! Why Bother? Why Bother?

It seems the chief driver of the scam is none other than our leader and poster boy of “the Celtic Comeback” Enda Kenny. He is on the front of Time Magazine peddling the comeback scam and today insists that AIB are right in increasing rates to ensure its recovery! What about the recovery of the people? What about the Celtic Comeback of the people? Or do the people not matter as long as AIB and the other Untouchables are looked after? Is that what Mr. Kenny considers a comeback? AIB, BIO, Anglo, PTSB, EBS and Nationwide can all have debt forgiveness but the ordinary person cannot that is a comeback? I do not think so Mr. Kenny!

In the interview by Mick Wallace TD on the Marion Finucane Show on RTE radio 1 he said that one of the things that strikes him most about the Dail is how out of touch most people are there! Well it seems he is right on that one and the more Mr. Kenny goes on about the comeback the more Mick Wallace is right! Somehow we need to drag these guys back into the real world. Let them sample the “comeback” and see how it feels!

There can be no comeback unless excess household debt is addressed, the real level mortgage arrears are admitted to and the national current account deficit is addressed.

Paul Carroll FCCA

Mortgage Arrears 30% not 10% as reported by the Banks!

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 FCCA