Banks and Bosuns

Wednesday, 11th July 2012

On the surface it might seem that two of the biggest stories of the week might have very little to do with each other. But if you look a little closer there are some some interesting ways in which connections can be made. Yet again here in Ireland the Banks have made an unwelcome foray into the headlines. It would appear that they consistently can do no right. Elsewhere in Europe there was huge talk about the discovery of the Higgs Bosun, otherwise known as the God Particle, which will given time expand our understanding of the universe immeasurably. But what it appears to be is that something, Banks, that should be understandable by the many seems to be increasingly become confused by the actions of the few. On the other hand there is the Higgs Bosun which is understood by the few but which is being explained so that the many can understand it. The Higgs Bosun is one of those once in a few generations events that are of real significance. While it is hard to fully appreciate what has been achieved that doesn't mean to say that most people aren't capable of understanding just how important an event it is. Before the announcement late last week in Switzerland it seemed that an awful lot of money was being spent by scientists to achieve something that didn't seem to have much import in people's lives. How different that all seems now. On the other hand here in Ireland we are still mired in one banking disaster after another. While there was good news that the ECB was cutting interest rates to historically low levels it still wasn't sure whether those lower rates would be passed onto customers here in Ireland.

However this really wasn't the main banking story, that was the fact that Ulster Bank was still having problems giving people access to the money due to a computing problem that it was having. When the computing problem first came to light it seemed that it was only going to be a minor error and normal service would be resumed straight away. But as we should be all too well aware here there is no such thing as a minor error when it comes to computers or banks. The problem just dragged on and on leaving many people in deep financial problems. The Central Bank has been criticised for not intervening sooner and that may be so but it is hard to see how it could have helped matters along. In amongst all of this it also came to light that with the new cut in the interest rates by the ECB that those who have fixed mortgages are paying significantly over the odds when compared to those on variable mortgages. The simple fact is that those who took out fixed mortgages before the housing crisis with the idea that they were insuring themselves against any huge interest rate rises are now being severely penalised for being so prudent. No one, or at least very few, could have predicted the housing crash and now many, many people are paying the price for that. It would seem to many that those who were the main protagonists in causing the crisis, the banks, are the only ones that are being bailed out while the ordinary person is left to carry the can. What is interesting is that while in a country such as Iceland the Prime Minister was convicted and jailed for his irresponsibility for their banking collapse no one here has yet to be called to account. It seems to be business as usual. And like the summer weather in Ireland the outlook is not good. New indicators for economic growth are set to be released soon and already they are being talked down. So it doesn't look as if there is any good news on the horizon. Despite this however there was the news that for the first time since the property crash house prices in Dublin and outside have risen for three and two months respectively. The rises were absolutely miniscule and they may be a temporary thing but for those that are stuck in negative equity they are somewhat of a good news story. Good news when such stories are so thin on the ground. It doesn't look like there is going to be a summer of good stories here in Ireland. No matter where you look whit come to the economics of daily life things are tough. Especially so here in Waterford where there are unemployment black spots that are hitting the unbelievable numbers of 40%. Of course there is always the saying that it gets worse before it gets better but when you've been hearing this year in year out you tend to take it with a pinch of salt. Particularly when at the same time you see that those who have caused the mess getting away scot free. So, what for the summer of 2012? Well, we'll always have the Bosuns.