The AIB Discussion Thread

-mr.x-

who cares what he lost. he still thinks theres value

daveirl

This post has been deleted.

Mikel

-mr.x- wrote: »

ya i would have to agree with ranger, its like you arent open to suggestions on the topic.

Au contraire, I'm all ears when it comes to suggestions.
What I'm not open to though is someone picking up a newspaper reading for the first time about a bad bank and then posting:

ranger4 wrote:

I am convinced that some kind of entity setup possibly to house and sell at some later stage bad debt from our main two banks would be seen as a posstive step to dealing with the unfolding problem going forward

Convinced? Really?
And as for this:

-mr.x- wrote:

it sounds like you think you know it all..
trust me you DONT

Really? I don't??
Thanks. For. That.

The whole dynamic of these threads is a case study in behavioural finance.
Just because I don't agree with you doesn't mean I think I know it all.

ranger4 wrote:

Its about time some possitive steps are taken by our gov with a comprehensive plan been put forward that would dampen down some of the bears out there.

Talk about missing the point. What have bears got to do with anything.
It's like this, your investment in the banks is GONE.
Stop looking at everything in the context of boosting the share price of the banks.
I mean, everything you've posted for the last year is imploring the Gov to do something about the share prices. If it's not a 'statement' from the Gov it's a 'statement' from the banks you want, anything to 'stabilise' the share price.

Believe me, bank share prices are the least of our problems

Compak wrote:

However if we take 27billion plus bad loans into property company and get it backed by bonds from Irelands pension reserves as well as banks it would achieve full international recognisation and stability.

Compak wrote:

you do realise private (not government) pension funds job is to invest? you do know they buy bonds for return?
And you are knocking my solution to buy Irish bonds instead of perhaps German ones when a better return can be agreed is why exactly?

You're very confused.
Are the pension funds to issue bonds or buy bonds?

You do know most pension funds are under funded don't you.
You do know they will have taken a hammering over the last couple of years?
Now you want them to put their money into the property market the banks have lost their shirts on and prop that up?

Solution? Haven't a clue.
But I know this much, any attempt to prop it up with more borrowed money is doomed to failure. The boil has to be lanced.
The last year has been an exercise in delusion and spoofing from the banks and the Government.
Remember 'we don't need new capital'?
Remember 'I'd rather die.....'?
All just put off the inevitable and made it worse.
They'll just continue in the same vein, looking for another pot of money to prop it up and avoid the inevitable.

Maybe daveirl is right, nationalise the lot and bring the house of cards down find out where we really stand.
Of course there are good arguments against this approach:

Quote:
Originally Posted by daveirl View Post
The solution is just nationalise the lot and start calling in loans and get the whole lot wiped out and start again. People here seem to assume that there is a solution that results in a good share price return, there isn't necessarily any.

this is BULL

Can't argue with that logic.
Long the banks by any chance?

I'd be intrigued to read an in depth account of how a bad bank would work, but all I've seen so far is a bunch of journalists repeating each other.
Admittedly I don't read as widely as I used to, so I might have missed it.

Also, there will have to be serious changes to how bank executives are remunerated. This business of paying them huge sums during a boom while they pump up a bubble and paying them off when it bursts will have to end.
By rights any 'performance related' bonuses that were paid during the property boom should be recouped.

-mr.x-

Really? I don't??
Thanks. For. That.

The whole dynamic of these threads is a case study in behavioural finance.
Just because I don't agree with you doesn't mean I think I know it all.

I dont mind if people dont agree, i realise their is no such thing off a golden bullet, in the banks case.
but what i do think is that their is a better than just to nasionalise the lot.

actually i did not read about the bad bank in the papper, but i did read about nationalisation so mabe its not me bantering about somthing i read.:rolleyes:

ranger4

Has any country in this present financial turmoil actualy FULLY nationalised ALL their banks, Cant see how FULL nationalisation will help situation.

Hanley

-mr.x- wrote: »

actually i did not read about the bad bank in the papper, but i did read about nationalisation so mabe its not me bantering about somthing i read.:rolleyes:

So this is a theory you forumlated on your own? Without reading or hearing anything about it ANYWHERE?

-mr.x-

of course i have heard all possible methods to stablise the banks.

(there in the news everyday)

im just offering the bad bank as a possibility instead of just screaming nationalisation.
out of all the possibility i think the bad bank would work best for ireland.
im not saying the markets will imediately adapt to it, or that it would be seen as a golden bullet by anyone, what im trying to say is that over time when property prices start to rise and the economy starts moving again ,that the result in shareprice, and the tax payer would be better than nationalisation

Compak

Mikel wrote: »

You're very confused.
Are the pension funds to issue bonds or buy bonds?

think you may be confused. One they buy Irish bonds.
two. certtain Irish pension funds have billions in them at their disposal
3. Many buy German bonds.

Im asking for a switch, whcih you cant grasp.

Now if you laugh and say no matter how attractive they are a pension fund would be mental to buy irish bonds fair enough. that is the point.

However you seem to be putting naiaive notion that pensions cant buy bonds which I presume is false and is just the way you are coming across

Compak

Question.

If Ireland nationalises banks, how are tax payers not on the hook for every cent of possible bad debt.

I would think this approach would instigate mad deposit withdrawal and furthe rcollapse?
I know I would withdraw and deposit all my money through my English accounts.

Im not saying ha ha ye cant nationalise Im asking a genuine question.

Compak

daveirl wrote: »

This post has been deleted.

If bought through CFDs do they appear on register (for AIB)
Also stock was rising like 30% a day back then

Mikel

Compak wrote: »

think you may be confused. One they buy Irish bonds.
two. certtain Irish pension funds have billions in them at their disposal
3. Many buy German bonds.
Im asking for a switch, whcih you cant grasp.
Now if you laugh and say no matter how attractive they are a pension fund would be mental to buy irish bonds fair enough. that is the point.

However you seem to be putting naiaive notion that pensions cant buy bonds which I presume is false and is just the way you are coming across

LOL yeah I can't grasp it.
Let's remind ourselves what you said:

Compak wrote:

However if we take 27billion plus bad loans into property company and get it backed by bonds from Irelands pension reserves as well as banks it would achieve full international recognisation and stability.

If you want pension funds to buy bonds in a property company, the bonds are backed by property.
They are bought by the pension funds.

It is still the same thing that I mentioned above.
You are robbing Peter to pay Paul.
Whose money is in the pension funds?
What state of solvency are these funds in?
Now you want to take funds and buy property with them?

So now that my pension fund has been raped for two years you want to use it to prop up a crashing property market?
What if the market doesn't recover?

My pension is to be used to buy unserviceable debt from the banks?
Can you see where this is going?

If you think pumping pension money into property companies will

achieve full international recognisation and stability

you are dreaming

Compak

Mikel wrote: »

LOL yeah I can't grasp it.
Let's remind ourselves what you said:

If you want pension funds to buy bonds in a property company, the bonds are backed by property.
They are bought by the pension funds.

It is still the same thing that I mentioned above.
You are robbing Peter to pay Paul.
Whose money is in the pension funds?
What state of solvency are these funds in?
Now you want to take funds and buy property with them?

So now that my pension fund has been raped for two years you want to use it to prop up a crashing property market?
What if the market doesn't recover?

My pension is to be used to buy unserviceable debt from the banks?
Can you see where this is going?

If you think pumping pension money into property companies will
you are dreaming

you are right if no recovery we are f$5£ed and pension funds lose it all. However their bond would not be backe dby property it would be backed by government guarantee.

This is my point that you are not grasping.

However if Ireland defaults then you are right pension funds are screwed and as I said its a legitimate reason to tell us the f£$% off.

At least I offered a suggestion, very easy to knock someones point down and not offer alternative

Compak

this is opinion of 3 top economic analysts. So anyone that thinks nationalisation is some answer is wrong. Either way consensus is we are screwed
http://www.youtube.com/watch?v=7F5o8Vf5kQY

Mikel

Compak wrote: »

you are right if no recovery we are f$5£ed and pension funds lose it all. However their bond would not be backe dby property it would be backed by government guarantee

I think you need to have a lie down and think about this.
If it's not backed by the property what's the point of putting the property together in one company?

You said the Gov guarantee wasn't worth the paper it was written on because we don't have the money to cover it, but you want to set up an entity with all of the bad debt and cover that?
Can you spot the flaw in this plan?

There is no such thing as a Government guarantee, it is really a taxpayer guarantee.
The pension funds hold taxpayer money.
Is there any point in guaranteeing taxpayer money with taxpayer money?

Compak

Off course i spot flaw. Its a huge risk.

The government has a predicted <1.5% chance of defaulting, the banks by sp and CDS a lot higher.
Im just suggesting using gov as guarantee so less chance of default -though still higher than one wants.

Not matter what happens taxholder is up the creek as you will see if you watch that video I posted.

Many taxpayers have pensions in banksnot only will they lose all this they will then be made pay for most debts thanks to guarantee.

Taxpayer will not come out pretty at all unless a proper plan comes out that will get economy going

-mr.x-

Hanley wrote: »

So this is a theory you forumlated on your own? Without reading or hearing anything about it ANYWHERE?

what are you talking about?
i never said i didnt hear about bad banks ANYWHERE, as you would put it.
what im trying to say is that mickel guy is speculating that i read about bad bank solutions in the newspapper, and am splashing other peoples opinions on boards.
what i am forumlating is an imformed opinion of where to go next with the irish banking system.

alot of people on this thread tend to jump on the bandwagoen of nationalisation because their to negative and unopen and short sighted to see an alternative.

people are saying their open to suggestions but all their here to do is pick holes in your idea and offer no alternative apart from nationalisation.

NARROW MINDED. simple as

xebec

OK guys, I've been watching this for a while and it's all getting a little heated in here

Let's all play nice, be open to each others ideas/opinions and stick to the (unwritten) golden rule of being a boards user: Attack the post and not the poster.

Bearcat

yeap I agree, it was turning into a handbags session

. Anyway back to AIB, share price sneaking up, my pals in the finance game say it would be horrible for the country for all banks to be nationalized. We are unlike Iceland where their Krona was savaged where we are under the umbrella of the euro so are least "protected" re our currency.

Like us all, I just want to see the cogs moving again in this country, whatever it takes but the bouys at the coal face dont think nationalizing is the panacea to our current woes.

-mr.x-

[SIZE=+1]UPDATE 2-Ireland considers 'toxic debt' company[/SIZE]DUBLIN, March 19 (Reuters) - Ireland's government is considering a number of proposals from a state-appointed advisor on how to deal with the banking industry's bad debts, including setting up a 'toxic debt' company to manage the assets.
'The Minister for Finance has seen the report prepared by Dr Peter Bacon,' the finance ministry said in a statement. 'The proposals will inform the government's ongoing considerations.'
The Irish Independent newspaper said Bacon, an economist, had urged Finance Minister Brian Lenihan to set up a 'toxic debt' company to take over billions of euros in soured property loans from the banks.
'The idea of a 'bad bank' or a risk management company being set up to take over the debts is in there,' a spokesman said. 'There are a number of proposals.'
Bacon was brought in as an adviser in February to explore government options for dealing with the industry's bad debts, which have jumped on the back of a bursting local property bubble hampering the country's economic fortunes.
Irish bank shares were up in early afternoon trade but dealers said the rise stemmed from large overnight gains in U.S. banking shares after the Federal Reserve said it would pump $1 trillion into the U.S. economy.
'What you are seeing is retail buying on a recovery play,' said one Dublin-based trader. 'It's a big gamble by the U.S.'
Bank of Ireland was up over 18 percent at 42 cents and Allied Irish Banks stock was nearly 12 percent stronger at 58 cents. Irish Life & Permanent, whose shares have trailed the larger banks, was up nearly 23 percent.
Institutional investors are steering clear of Irish banking stocks amid continuing uncertainty about their soured debts and how the government plans to deal with them.
Dublin is injecting 3.5 billion euros into each of Allied Irish Banks and Bank of Ireland to shore up their capital position but investors have shrugged off the funding as insufficient.
Allied Irish Banks, Ireland's largest bank by market value, has said that under a stress case scenario its impaired loans would peak at 17.9 billion euros in 2011.
Scott Rankin, analyst with Davy Stockbrokers, said he preferred the creation of a 'bad bank' to park banks' soured assets rather than a UK-style insurance scheme, in which the government would insure banks against losses on the assets in return for a fee.
'An insurance scheme requires a lower level of capital but it leaves the tail of the losses for a future date,' said Rankin, adding that the government could use some or all of the country's 16 billion euro national pension fund to set up a 'bad bank'.
'We need a bit of shock and awe with any policy measure that is introduced. A 'bad bank' used in conjunction with a substantial chunk of the National Pension Fund would have the best shot of convincing markets that we have the ability to deal with this problem.'
Dublin is funding its 7 billion euro capital injection into Allied Irish Banks and Bank of Ireland using funds from the pension fund.














well would ya look at that.+1:P

ninty9er

ranger4 wrote: »

Has any country in this present financial turmoil actualy FULLY nationalised ALL their banks, Cant see how FULL nationalisation will help situation.

The UK has come close. Bradford and Bingley - now part of Santander...Northern Rock....RBS and Lloyds....HBOS...HSBC.

We're not even close to fvcked compared to the UK tax payer and our banks OWE US THE MONEY BACK unlike the UK where the it's OSC as opposed to Pref SC.

Listen to Alan Ahearne....there's a good reason why he was picke above McSellMyBookiams and Eddie I've a few books to sell Hobbs...did anyone see him ask the Late Late audience if they had faith in the opposition....NO. He's a partisan hack and McWilliams is a person who built his career on lies as he actually states in his books.

ranger4

ninty9er wrote: »

The UK has come close. Bradford and Bingley - now part of Santander...Northern Rock....RBS and Lloyds....HBOS...HSBC.

We're not even close to fvcked compared to the UK tax payer and our banks OWE US THE MONEY BACK unlike the UK where the it's OSC as opposed to Pref SC.

Listen to Alan Ahearne....there's a good reason why he was picke above McSellMyBookiams and Eddie I've a few books to sell Hobbs...did anyone see him ask the Late Late audience if they had faith in the opposition....NO. He's a partisan hack and McWilliams is a person who built his career on lies as he actually states in his books.

I honestly believe aib-boi will escape nationalisation, when the toxic entity is set up and running confidence and foreign investors will return to thease banks, sp has been distroyed and oversold by fear of nationalisation, when potentail investors hear details of toxic plan they will return.

daveirl

This post has been deleted.

JackieT

daveirl wrote: »

This post has been deleted.

Amen to that! It's pissing me off actually that these banks who have obviously ventured on the wrong side of the risk to reward ratio are now being bailed out by the irish taxpayer, whereas a normal company would have gone bust by now. Yet they have made the decision to retain their defunct management team.

I'm just saying that it gives the appearence of ireland having a banking sector which is more or less an old boys club. A foreign investor would certainly think twice before pumping money into an irish bank in the future.

Bearcat

a lot of shares traded today

Mikel

-mr.x- wrote: »

what are you talking about?
i never said i didnt hear about bad banks ANYWHERE, as you would put it

You said you didn't read about bad banks in the paper, hence the question about formulating the plan yourself.
But you must have meant you read about it somewhere else, so that just validates the point I was making doesn't it?

-mr.x- wrote:

what im trying to say is that mickel guy is speculating that i read about bad bank solutions in the newspapper, and am splashing other peoples opinions on boards.
what i am forumlating is an imformed opinion of where to go next with the irish banking system.

You're not even formulating a coherent sentence, you're doing something else, I'll get to that in a minute.

-mr.x- wrote:

alot of people on this thread tend to jump on the bandwagoen of nationalisation because their to negative and unopen and short sighted to see an alternative.

No they're not.
What you're doing is interpreting any scepticism towards what you say as an endorsement of what you're afraid of.
If someone does have that opinion, isn't it possible they have valid reasons?
It's not necessarily because they're 'to negative and unopen and short sighted to see an alternative'

=-mr.x- wrote:

people are saying their open to suggestions but all their here to do is pick holes in your idea and offer no alternative apart from nationalisation.
NARROW MINDED. simple as

Again with the accusations of being closed minded.
What's wrong with picking holes in an argument?
Isn't that how you find out how good it is?
That's not being narrow minded, it's subjecting ideas to scrutiny.
If you were genuinely interested in the merits of the idea you'd welcome this but you don't.
Why not?

It's simple.
You are long the banks.
That was a bad decision, but you don't want to admit that.
You'd rather look for something, anything which might validate your original decision.
So you read the papers, the net whatever, looking for something which will make your investment look like it wasn't a bad one.
You're hoping.

Professional traders call that being 'married to your position'
So this means it's no longer a rational subject for you, it's an emotional one.
This is why you kick and scream at what you see as someone advocating nationalisation, even when they're not.
Because that would mean you'll never get your investment back.

You're not the only one.
Go back on this board for the last year and you'll see plenty of threads along the lines of 'I've just heard/read about X..... I don't know what it means but I'm convinced this is the solution to the problem and why doesn't the Government hurry up and do it?'
The notion that you can apply a sticking plaster to a dysfunctional banking system, that there is some kind of neat solution that will fix things is nonsense.
The people who understand something about the banking system know this.
This unfortunately does not include most journalists, most of whom, like yourself hear of an idea and next day start acting as if it's the obvious solution.

'Bad Bank' is a case in point. The term is only in the popular lexicon a matter of months but the number of people who are convinced that this is what we should do is extraordinary.
The actual practicalities of it escape them, and like I've said before I've yet to read an analysis beyond the Government buying 'toxic debt' and housing it.
As someone who was worked professionally in the debt markets for some time I can promise you three things.

The complexities of such an exercise would make your head spin.
The Government don't understand how it would work.
The Dept of Finance don't understand how it would work.

Hell, the National Treasury Management Agency are our experts in debt management and I can tell you from personal experience they have no clue how the bond markets work.

So what does this add up to?
Someone reads about a 'Bad Bank' plan, thinks this might be the thing to rescue their investment, posts a question about it.
Only they're not interested in a rational analysis of what it might mean, they want a circle jerk with everyone reassuring them that yes, this is the answer to the low share price.
This will bring the 'foreign investors' back and the share price will recover.

Anyone who raises questions about what it means in terms of practicalities, or the quality of management or any other concerns is accused of being negative or 'screaming for nationalisation'.

Again, this is an entirely predictable emotional response to what is basically an appeal for validation.
This is not how serious investors behave.
They welcome questions, criticism, analysis, because they are aware they might have missed something and it could save them money.

If you don't accept my analysis, well fine.
But a case in point:

ranger4 wrote:

I honestly believe aib-boi will escape nationalisation, when the toxic entity is set up and running confidence and foreign investors will return to thease banks, sp has been distroyed and oversold by fear of nationalisation, when potentail investors hear details of toxic plan they will return.

When you learn to speak the language it's obvious.
Believe.... translation = HOPE based on my position.
Also, the notion that 'foreign investors' are watching their Reuters terminals for news of the Irish setting up a 'toxic entity' to start ploughing into Irish banks is well, naive.

daveirl wrote:

This post has been deleted.

A rational question, which will be met by the same accusations.

Blackjack

Mikel wrote: »

Hell, the National Treasury Management Agency are our experts in debt management and I can tell you from personal experience they have no clue how the bond markets work.

That's a very, very, harsh indictment, one I'd like to see proof of, if it were possible.

Hanley

So... does the Irish government ACTUALLY want to fix the banks.... or do they want it to look like they've fixed the fundamental problems so foreign investors come back?

blindsider

A question to all the experts here, if I may please. (I've read as much of the thread as is reasonable, and can't find the answer.)

Can someone tell me, definitively, what would happen to shareholders if AIB/BoI were nationalised?

We (Mrs. & I) have ca. 15K shares in one bank and 4500 in another.

It now seems less likely that nationalisation will happen (bad bank idea gaining credibility?), but I'm trying to work out if we'd be better to sell at a huge loss and get a few grand now. If they're nationalised, would we get anything?

Thanks.

Daragh101

mickel i actually agree with Mr.x, he has made good points.

Why would nationalisation work better than a bad bank.(for the tax payer)

Daragh101

If they're nationalised, would we get anything?

AWNSER = a pat on the back is about all youl get