Central Bank Mortgage Conference Post author By Karl Whelan Post date October 13, 2011 A reminder that this well-timed Central Bank conference on the Irish mortgage market takes place today. Categories In Banking Crisis Tags Mortgages 20 Comments on Central Bank Mortgage Conference ← Legal Services Regulation Bill → Fiscal Policy Panel 20 replies on “Central Bank Mortgage Conference” I assume Kristopher Gerardi will be talking about MERS, robo-signing and banking fraud in his discussion on the foreclosure crisis – otherwise I can’t see how any one will be able to get in to the room, due to the overabundance of banking-sized elephants being present. Oops! am spotting some quite large gaps in the numbers on opening slides and those of the CB’s mortgage arrears statistics re Kennedy & McIndoe Calder presentation. That is a really good presentation. Slide 9 -Origination by year and location very informative. Makes you want to ask the question, ‘Who is responsible for this’. A conference to deal with the aftermath of the Greek Gov’t opting for Article 65. would be useful. http://www.ft.com/intl/cms/s/0/e1e852f2-f0e5-11e0-aec8-00144feab49a.html All of the banks clearly mispriced these assets and the banks, covered and uncovered, should be made to pay the full negative equity cost as in Iceland. The fact that covered banks may not have funds is irrelevant. The negative equity mortgagees should initiate legal actions against the banks. They should futher initiate legal action against the ECB for eroding the ability of the banks to fund their claims by insisting that bank assets were used exclusively, contrary to all known commercial law and law of equity, to pay one class of creditors ie bondholders. These claims should be pursued in the European Court of justice. One commentator [@yield ] has been making the point about asset mispricing for some time. He is right. The banks are liable for this mess. The banks should pay. That means bank bondholders or those that proctected them. This issue should be brought before the highest courts and bring these European institutions under the Law. Blackrock Solutions conclusions • House prices are a significant driver of defaults in ‘non-recourse’ and recourse markets alike – negative equity matters in all markets which BlackRock has studied • The housing crisis in many countries is not over and requires policy response coordinated with implementation at a loan level basis • Little loan modification experience in Europe to draw from; much of it seems to be driven by accounting or capital preservation • Certain types of loan modifications seem to work better than others – the US experience suggests that principal forgiveness is more effective than other types of loan modifications @ Joseph Ryan Its very scary when you actually agree with something Pat Kenny has said on front line isn’t it? I started to doubt my logic. 🙂 Re what Ronan Lyons was talking about on frontline. Putting things in place to prevent the next crisis. The only time this will be on the agenda is now. If a recovery starts to happen this will get taken off the table so if we are serious about it it has to happen now. My 2 cents. Non recourse loans to be mandatory and separate retail and commercial lenders keeping one nationalised retail bank for good. Legislation stating when private banks fail they will not be rescued by the state. One big thing I have taken out of this crisis is that in banking high returns are not possible without higher risk. Any bank making high levels of returns (anything over 5% per anum) should be treated as a potential rogue. Why are our government not following the example of the UK and at least attempting to do this now. In the UK they have a much bigger vested interest in allowing the shadow banking system to continue but they are at least attempting to do something. The taxes the shadow banking contribute for the exchequer are massive plus 1 million jobs. Look at the graphs Eamon… this crisis has barely started…. The unemployment in the southeast is nearly off the scale and I suspect much larger then the official figures – but why is it higher then the west ? Also their arrears are lower !! – strange With Dublin & Cork the only semi-functional areas in terms of repayment. I suspect when you lose your job out in the sticks you must ditch your car , then you get isolated , then unemployable after a period of time – then you eject. But the midlands might as well be Cambodia now – is the central bank preparing plans to napalm the villages before they can mount another secret land based incursion ? http://www.youtube.com/watch?v=fEPL7R8mXmE It goes back to my central argument – the settlement pattern is not fit for purpose , the midlands and much of the west is lost to the forces of entropy. @ Garry All the more reason to prevent any dead cat bounces and do the right thing. Actually forget all that stuff about needing to put in proper controls to put manners on the bankers. All we needed was the cunning, wit and cutting satire now provided free of charge by the good people at broadsheet.ie http://www.broadsheet.ie/2011/10/13/warning-irish-times-property-journalists-are-drooling-again/ Sorted! @ Eamonn I think Marxs theory of labour value is enjoying a revival although this time the Financiers are on top of the heap having destroyed both labour & capitalists with the production of a unnaturally long credit cycles using the derivatives deathstar mechanism. http://www.youtube.com/watch?v=-e8rt8RGjCM This is the revenge of really old money me thinks. Safe goverment bonds ( US Treasuries) or if the Eurosystem wins (Gold) will buy a heck of a lot of land in the future if they continue with these monetory policies. Just buy both sides of the argument & sit back and watch the destruction (from a safe secure place of course) Slightly off-topic: so apparently Credit Suisse has calculated that BoI might be found to require another €375m or so under a future European Stress Test 3? I don’t know if that number can be extrapolated to AIB and Anglo or not. PS. – do not take a Dorks investment advice seriously. @KW The link to yesterdays presentations seems to have been taken down. Where can one view same? @ Yields or Busts Conference materials here http://www.centralbank.ie/stability/Pages/Conference.aspx @All Interesting to see that the Blackrock presentation suggests that plain and simple principal write downs are in fact the best way of getting to the other side of this mess. I just wonder how quick the CBI and Govt will be willing to accept their advice in Oct when they couldn’t get enough of Blackrock tonic last March (at a €30m cost no less) – yesterdays advice I assume comes for free but no doubt it won’t be acted upon. I assume, seeing as the plucky little fisherman in the frozen land up north have figured out how to stream their conferences: http://www.irisheconomy.ie/index.php/2011/10/04/iceland%C2%B4s-recovery%E2%80%94lessons-and-challenges/ that this is available online somewhere? Or is this another “What the difference between Iceland and Ireland?” thing… No sign of the webcast(!) but the presentations are online. Surprise, surprise… Kristopher Gerardi makes no mention of MERS, robo-signing and banking fraud… But he must have some elephant sized testicles to say the cause of the crisis was “Bubble Fever”. I assume people were unsurprised at the sight of unicorns and hobbits wandering the halls of the central bank after this. I shall also assume he wore a hat with a card reading “In this style 10/6” and served tea whilst giving this presentation. It’s the only thing that explains it. Comments are closed.