The Ominous Shades of NAMA

The Raven.

Sand wrote: »

Its just musical chairs.

I wish I had said that! !!

NewDubliner

Martin Turner's cartoon in today's Irish Times has named it (viet)NAMA.

jmayo

This whole plan is a another smoke and mirrors vehicle to affectively help bankers, developers and leave the taxpayers carrying the can at the end.
IMHO it is seen to be doing something, but the hard questions haven't been answered and it doesn't exactly inspire confidence one of the main players was director of major property investment company :rolleyes:

Either way is the taxpayer not left paying the bill, since if we value the loans at realistic values, the banks will continue refusing to lend and complain they need extra cash injection ?
Would it not be better to now nationalise, have fire sale and be done with it ?

How much property involved in this is overseas and as mentioned how can we ensure that for instance the government (Maktoom spelling?) in Dubai will play ball with us ?

Interesting story I heard from someone with lots of connections.
Ex developer was asked by bank to value land in Wicklow that was on it's books.
He told them he wouldn't touch it now, but if really pushed he would put value of 5m on it, to which he ws told it was on the books at 35m worth.
If that trend is anywhere near true across the banks and institutions we are truly f00ked.

jimmycrackcorm

jmayo wrote: »

Interesting story I heard from someone with lots of connections.
Ex developer was asked by bank to value land in Wicklow that was on it's books.
He told them he wouldn't touch it now, but if really pushed he would put value of 5m on it, to which he ws told it was on the books at 35m worth.
If that trend is anywhere near true across the banks and institutions we are truly f00ked.

True, but what would that land be worth in 5 or 10 years time? Would it be better to dump it now and lose 30m or hold on for it to appreciate in value? Land is a scarce resource and as such will go up in value again. The question whether to rush to dump now or hold off to minimize losses. It might be comparable to taking out a 20 or 30 year mortgage.

The Raven.

There is an interesting article in the Sunday Tribune, which helps to join up a few incestuous dots concerning NAMA.

Justine McCarthy - "Just because Teflon is invisible when it is wrapped around the Golden Circle doesn't mean it is a figment of our imagination"

One of Roald Dahl's stories is about an emperor so cruel his tailors trick him into believing their invisible cloth will insulate him against the most extreme Arctic cold. The emperor dons the cloth for a spot of skiing, and freezes to death. Once upon a time, I read that story and thought, 'gullible fool'.

Nowadays, I read stories in the newspapers and think 'what sort of fools are we?' They are stories like Dahl's. They are about illusionary things that we convince ourselves are real. Things like politicians' promises. Things like corporate ethics and fiscal justice and the same law applying to everyone equally. Things like the apostasy of crony capitalism and political nepotism.

There is a reason why Ireland boasts a world-beating body count of Nobel laureate writers. It's because we dwell contentedly in our imaginations. Our leaders tell us that, though we cannot see the hairshirts they are wearing, theirs are the same as ours. And we think how fetching they look in them. Blind faith has never been as unshakeable as it is in post-Catholic, post-boom Ireland.

Eight days after the finance minister said unequivocally in his budget speech that TDs would no longer receive long service increments we learn that, actually, they're still getting them. In the same breath, he said the income levies would be doubled from 1 May. Now they're being back-dated to 1 January. In the white glare of enlightenment, nobody mentions the word "dishonest".

............

Now the state is setting up a half-way house to detoxify the banks' and builders' debts. Nama, this love child of incestuous market greed, is the brainchild of the economist, Peter Bacon.

Dr Bacon looks pleasant enough. He might be the most decent man you could meet. But he should not be dictating the bailout of the banks' development liabilities. Up to last summer, he sat on the board of Ballymore Properties, Ireland's biggest developer and winner of the controversial U2 Tower project in Dublin's docklands. Ballymore is reported to have borrowed up to a billion euro from the nationalised Anglo Irish Bank. The company's boss, Seán Mulryan, has been a regular development partner of Seán Dunne (whose Ballsbridge site is exempt from Nama's remit because the financier, Ulster Bank, is a non-national).

Apologists for Bacon's pivotal role in structuring Nama argue that he was Ballymore's European director and, therefore, uncontaminated by the company's liaisons in Ireland. What they do not mention is that, in Britain, for instance, Michael Fingleton's Irish Nationwide, which is seeking to extend the state guarantee scheme to pay €2.2bn it owes to overseas lenders, has partnered Ballymore in development projects. Ballymore and Irish Nationwide have a joint venture company registered in Oxford called Clearstorm to which Bacon was appointed a director in 2003.

Just because Teflon is invisible when it is wrapped around the Golden Circle doesn't mean it is a figment of our imagination.

The rest of it, though, you just couldn't make up.

The same old cronyism! I think Peter Bacon should be removed and let some outside, independent expert take over, and start again from scratch.

jmayo

jimmycrackcorm wrote: »

True, but what would that land be worth in 5 or 10 years time? Would it be better to dump it now and lose 30m or hold on for it to appreciate in value? Land is a scarce resource and as such will go up in value again. The question whether to rush to dump now or hold off to minimize losses. It might be comparable to taking out a 20 or 30 year mortgage.

Yes that might be true in normal countries, but how long will it take for land and property in this country to go back to the unsustainable values it had reached.
It will probably take decades and menawhile you are sitting on somehting that is doing nothing.
This is not land in the centre of Dublin but land out in County Wicklow.
Speaking of land in centre of Dublin, how much is Dunne's Ballsbridge site now worth ?


Whatever about holding onto land, actual buildings need to be offloaded and that is one of the major problems in this country at the moment.
Developers and banks are holding on grimly hoping that for some unknown reason the price of their property will come back to the heady days of 2006.
It ain't going to happen and the sooner the ar** falls out of it the better because then we can start to move on.

Instaed you look at the valuations some people are putting on their property and you can not but laugh :rolleyes:

Niall Keane

Previously I had posted in Bad Developer / Bad Bank (two can play at this game):

“Developer A and sons borrowed €220m (110% loan) for land “worth” in 2005 €200m.
The bank holds the deeds, but he owes them the money, money that’s now sitting in some Fianna Failure non-resident Farmer’s account who sold the re-zoned land.
Developer A the cute whore, splits up his assets and companies responsibilities by setting up 4 companies with different permutations of his children. Each company only has one unlimited shareholder. This shareholder is always poor Seamus, the young lad. All the time the shareholders are very well paid, on salaries from profits reaped on other similar but earlier schemes, making our politicians look like paupers. This cash is private, not company owned.
Now its 2009, property has collapsed, the land is valueless. Developer A and the 4 companies still owe €220m.
Superbank “the Irish tax-payer” comes to the rescue, and pays say €150m for the currently valueless land, then goes after Developer A and the gang of 4.
All the Developers companies declare themselves bust. The company’s assets are seized, this amounts to say €1m, Superbank goes after Seamus, the only one whose private property is up for grabs, and it is seized, valued and sold for €5m.
Seamus can’t be on the board of a company for 12 years, and still has a huge unpayable debt hanging over him, but he agrees to do his best and pay €200 a week. Don’t worry though Dad and family will look after him, living for a rent of €10 a month in a muck mansion owned by his sister Mary.
Meanwhile, the land won’t sell, maybe in 30 years? But the PAYE suckers have just paid the developers bank €150m, retrieving just €6m from the developer, losing 86% of our “investment”, the other cute developers catch on and we double our national debt!”

but I should add:

Do people actually think that the developers own their mansions? They got mortgages on them paying 5% interest, while using their actual millions to reap 20% interest. Mortgages were cheap money. There are no mansions to confiscate, just more bad debts to acquire....