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NAMA - 90 Billion to our national debt. Accountants, Lawyers & Bankers get rich

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  • Closed Accounts Posts: 400 ✭✭Wheely


    and to add insult, bankers,lawyers,developers and politicians do not have to suffer on hospital waiting lists.Ever see one on a trolley?

    I couldn't tell, they msutn't have been wearing their badges.......:rolleyes:


  • Closed Accounts Posts: 6,718 ✭✭✭SkepticOne


    andrew wrote: »
    Christ that's cynical. I think that banks will learn enough from this; it's not as if they havn't suffered at all. Their share price is down, their social capital non-existent, their ability to make a profit reduced. While they haven't collapsed, they're basically in the ****ter. Sure they've been bailed out, but it was only at the last minute. If you get shot and nearly die, you still have an incentive not to want to get shot again. Just because getting shot won't kill you doesn't mean that you'd OK with getting shot again. I don't see why they'd be keen to repeat this experience.
    You are talking about banks as if they are things with feelings.


  • Moderators, Science, Health & Environment Moderators, Society & Culture Moderators Posts: 3,372 Mod ✭✭✭✭andrew


    SkepticOne wrote: »
    You are talking about banks as if they are things with feelings.

    They're run by people you know, not robots.


  • Registered Users Posts: 2,809 ✭✭✭edanto


    hahahaha.

    They're run by a strange breed of person. But we are talking about the banks as entities, as legal people. They can buy things, sue, be sued, I'm sure you've come across the notion of a company being considered a legal person before?

    It does lead to a very interesting question - what kind of person is this company, or that company? There was a documentary out a few years ago called The Corporation that looked at that question and concluded that, in general, corporations are sociopathic. And legally, have to be. If you have never even heard of this line of thinking, then here's a link to the whole movie - http://video.google.com/videoplay?docid=3203253804055041031

    If, on the other hand, you accept that some corporations act in a sociopathic manner, can you please present your reasons that Irish banks don't and somehow have an ability to (a) learn from their mistakes and (b) express remorse through actions.


  • Moderators, Science, Health & Environment Moderators, Society & Culture Moderators Posts: 3,372 Mod ✭✭✭✭andrew


    edanto wrote: »
    hahahaha.

    They're run by a strange breed of person. But we are talking about the banks as entities, as legal people. They can buy things, sue, be sued, I'm sure you've come across the notion of a company being considered a legal person before?

    It does lead to a very interesting question - what kind of person is this company, or that company? There was a documentary out a few years ago called The Corporation that looked at that question and concluded that, in general, corporations are sociopathic. And legally, have to be. If you have never even heard of this line of thinking, then here's a link to the whole movie - http://video.google.com/videoplay?docid=3203253804055041031

    If, on the other hand, you accept that some corporations act in a sociopathic manner, can you please present your reasons that Irish banks don't and somehow have an ability to (a) learn from their mistakes and (b) express remorse through actions.

    I can't watch that video, because UPC are cnuts who've decided it's totally ok to give someone a 5GB per month bandwidth limit :(

    Being sociopathic doen't preclude someone/thing from learning from past mistakes. This bubble has been the first major bubble to affect Irish banks. It has wiped out their equity capital and hampered their ability to make profits. It has been bad for them. Businesses have a strong incentive not to do things which are bad for profits. This incentive is stronger now that they've actually experienced a bubble. And so this incentive, combined with actual experience, will hopefully prevent Irish banks from doing this again any time soon. I never said banks could somehow express remorse though.


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  • Registered Users Posts: 724 ✭✭✭jonsnow


    andrew wrote: »
    I can't watch that video, because UPC are cnuts who've decided it's totally ok to give someone a 5GB per month bandwidth limit :(

    Being sociopathic doen't preclude someone/thing from learning from past mistakes. This bubble has been the first major bubble to affect Irish banks. It has wiped out their equity capital and hampered their ability to make profits. It has been bad for them. Businesses have a strong incentive not to do things which are bad for profits. This incentive is stronger now that they've actually experienced a bubble. And so this incentive, combined with actual experience, will hopefully prevent Irish banks from doing this again any time soon. I never said banks could somehow express remorse though.

    Irish banks will continue to go bankrupt periodically because they have no "incentive" to learn proper risk management.This is because Irish governments have proved that they will continually bail the banks out of whatever mess they get themselves into whether it be failing to do due diligence (ICI) or thinking that Ireland will uniquely escape from a massive property bubble unscathed with a soft landing.

    Even if your contention that the top banking management will learn from these particular methods of bankrupting themselves is accepted.I am sure that they will manage it through other new methods.Because they have no "incentive" to reign in their risktaking behaviour.The next time they bankrupt themselves some hapless finance minister will be called in for a four oclock in the morning decision where he will be informed that AIB and BOI are "too big to fail" and will be panicked into producing another blank cheque.


  • Registered Users Posts: 12,588 ✭✭✭✭Sand


    If you think that letting two giant banks collapse would somehow not harm the economy in a big way, then you're just plain wrong. You and many others seem to think that the harms of letting large banks fail have been fabricated by some sort of 'elite' group, and that letting banks fail isn't actually that bad. Seriously, the conspiracy theory forum would be a better place for that kind of stuff. Letting big banks fail is bad for the economy. Simple as. Worse than bailing out said banks.

    Has anyone actually done a cost benefit analysis? Or is it just assumed that BoI and AIB cannot fail, no matter what the cost?

    I can see that bankers would suffer, I can see that property developers would suffer, I can see that anyone holding bank of Ireland bonds would suffer, I can see that BoI shareholders would suffer. Depositors might suffer too. Not every depositor would get 100% of their money bank. People with mortages with AIB and BoI would have a period of uncertainty until the performing mortgages were bought up at a hefy discount.

    I dont doubt there would be a cost involved. But weighed against 90 billion, with up to a third of government expenditure to service debts like the darkest days of the 1980s, plus the incredible moral hazard where private gain/socialised risk is reinforced and cemented as national policy creating future crises...

    I dont think someone can blithely assume NAMA is the least worst option. Again, if I was running AIB or BoI, if I was a bond holder with them, if I was property developer with loans taken out from them, if I was a Fianna Fail minister who didnt want anyone revealing the inner secrets of the Galway Races tent...Yeah, Id love this deal. The dumb stupid moronic taxpayers take it up the ass, everyone else charges consultancy fees, and we can get back to leveraging ourselves up to the hilt, betting that we can reap in bonuses and retire before the **** hits the fan again.
    I'm the only one trying to move the discussion away from the retarded rabble about how Fianna Fail in it's entirety is composed of a mind bogglingly corrupt cabal of 'elites.' You probably find yourself agreeing with that statement, but statements like that are nothing more than epigrammatic bullshít which every tom dick and harry around here loves to spout in order to feel as though they're making a valuable contribution. It's asinine, and adds nothing of value. Rabble rabble elites rabble rabble etc.

    1 - I dont consider Fianna Fail to be an elite. The application of the word "elite" to Fianna Fail has a certain dissonance.

    2 - Your assumption that Fianna Fail are in actual fact misunderstood patriots, taking the hard decisions after painstaking examination of all options, putting the future of the country ahead of the party is distracting from the real debate. Its so blatantly wrong that it cannot be glossed over with a mere sigh and rolling of the eyes that might suffice for mere tripe.

    The nature of Fianna Fail and the calibre of its members is best represented by the Sligo Two, who made a big show of resigning the FF whip but making it very clear that they were only doing so to appease local interests and that basically Cowen could rely on them to **** over everyone else, so long as he didnt try to take anything from their constituents. Cowen is cut from the very same cloth, and by extension so are all his ministers who were picked for their tribal loyalty to him as the Chief, not for any competence.

    Its so ingrained in Irish politics that the nature of the carveup of political postings between regions is openly discussed, with little or no requirement for the people involved to have any competence whatsoever.

    Mary Coughlan has no competence whatsoever apart from being able to down pints with the best of them, which is enough for Cowen. Brian Lenihan, an amateur who was dumped into perhaps the most important ministry to learn on the job in the midst of the worst crisis in Irish history. As for our Foreign Ministers...of the last couple, how many had any competence in foreign affairs? How many had even travelled abroad for any significant amount of time before taking their roles?

    Oh yeah, Fianna Fail is a sadly misunderstood association of patriots and intellecuals.
    Either they have the money or they don't. If they can't pay off their loans, they lose their property and their money. It doesn't make a giant difference to NAMA if the developer goes bankrupt. It just means that the chance of that particular loan being repaid goes from slim to none. NAMA has an incentive to force bankruptcy because it further crystallizes the value of the loans which it owns. This adds a degree of certainty which they like to have.

    Why do you say these things?

    Do you work for the civil service by any chance? I am wondering because a statement like the above is an example of the disconnect between that entity and reality.

    Lets say a loan with Paddy the plasterer for 100 million is called in and Paddy calls bankruptcy. His commercial assets are siezed and sold They are worth 30 million. Paddy loses. His bank loses.

    NAMA's "experts" have being doing a lot of really good coke though and decided that instead of the bank calling in the loan, they will buy the loan from the bank for 70 million. They might put a model together to attempt to justify it but the reality is they want to give 70 million to the bank somehow, in someway. Buying some ****ty worthless loan..yeah, thatll do as an excuse.

    The bank is loving this. They still lose 30 million on the loan, but its better than losing 70 million. It makes bussiness sense right?

    Now if NAMA has paid 70 million for a loan why the **** would they push the developer into bankrupty to immediately lose 40 million? Thats not even "being tough on the developers". Its clinically retarded. I consider Fianna Fail to be corrupt, but I do not believe they are that retarded.

    So long as NAMA does not "crystallise" its losses as you put it, it can claim it has a 100 million euro loan due to it, that it bought for 70 million. It they crystallise it then they have to admit they paid 70 million for a 30 million loan. NAMA doesnt want to push the developers into bankruptcy, the developers dont want to be bankrupt and NAMA is going to be clouded in so much secrecy that it will be the perfect vehicle for taking things in house.
    Christ that's cynical. I think that banks will learn enough from this; it's not as if they havn't suffered at all. Their share price is down, their social capital non-existent, their ability to make a profit reduced. While they haven't collapsed, they're basically in the ****ter. Sure they've been bailed out, but it was only at the last minute. If you get shot and nearly die, you still have an incentive not to want to get shot again. Just because getting shot won't kill you doesn't mean that you'd OK with getting shot again. I don't see why they'd be keen to repeat this experience

    Thats touchingly naive.

    Look banks are not run in the interests of shareholders. They are run in the interests of the top level staff, with a nominal nod towards shareholders. Do you really, really, really think that directors who are on salaries of millions give two ****s about the interests of some old age pensioner who happens to have lost tens of thousands of euro when her nest egg in Irish bank shares ( its a bank, run by respectable proffessionals....theyre not cowboys? They cant be cowboys...) was wiped out recently? You think that keeps them up at night when theyre trying to find some wink of sleep on their bed made of money?

    Wake up. Im no class warrior but your views about how bankers are some sort of men of the people make me look like Arthur Scargill. Theyre human beings, who are rewarded for making short term profits. Who are utterly focused on making short term profits. Risk controls are seen as being a problem to get around so that money can be made.

    I work in a bank myself, and believe me, you might have good risk controls in place, but if a client wants to do X and is willing to pay enough...well some sort of justification will be found to make it so. Because banks are there to make money, not to be Mary Poppins. All the talk about risk control...its just talk. Money talks louder. Lets make money.

    The mortgages debacle in Ireland is laughably simple to explain...bankers found a magic money making machine where they borrowed abroad at a time of cheap credit, lent domestically and reaped the differential between the rates. And they made money. And they just borrowed more and more, so they could lend more and more so they could make more and more. And most importantly they claimed massive salaries and bonus. Because, theyre worth it...arent they?

    In actual fact, the bankers were leveraging their positions massively because the short term gains were not based on depositors money, they were based on borrowed money. This ramped up the risk, this ramped up the profits, and by extension ( and most importantly for any single bankers decision making process) ramped up the salaries/bonuses far in excess of what could have been achieved on deposits alone.

    Did shareholders benefit too? Depends on the time frame that you view their investment on. Over 3 or 4 years, they did great. Over 10 years....not so great. But the bankers dont give a **** because they got paid. And thats all that matters. Would shareholders have accepted a similar level of risk? Probably not. Did they understand what the bankers were doing? Probably not. Did the bankers understand what they were doing? Probably not. But they got paid. And thats all that matters.

    Plenty of risk guys would have raised their hands and said "Hey guise...this might not be the smartest thing to do" but they would have got the response "What? You need to speak up! I cant hear you over the noise of this money printing machine!". If the risks guys didnt learn to shut up and go with the flow...well theyd get a reputation as not being team players and would be eventually shown the door.

    Banks are not socialist communes. They are designed for one purpose only. To make money. Nominally to make the shareholders money, but in practise, to make the upper management money, at other peoples risk. And thats fine. Theres nothing wrong with making money. But dont fool yourself that a bank is some sort of socialist activist networking organisation. Remember Magnolia? How to fake like you are a nice and caring person? Thats what banks are doing when they talk about social citizenship.

    They dont give a ****. They are in it to make money. They make money by betting shareholders money. They make money in good years. They make money in bad years. In very bad years, the taxpayer covers the loss. At no point do the bankers lose money. If you want to impact that mindset...if you want them to sit up and take notice when the risk management guys speak - you need to burn them down to the ****ing ground. Relying on their better nature as good citizens with a social conscience? Yeah, Ill see you in 10 years when theres another "too big to fail" crisis to solve.


  • Closed Accounts Posts: 143 ✭✭freedom of info


    dresden8 wrote: »
    I have been shouting out for the last 10 years. The celtic tiger cubs I was talking to treated me as an 80's throwback and a heretic. Unfortunately I was proven right and they are stuck in 100k negative equity.

    But still, who listens to old fogies? Let them piss off and die and let the young turks take over. Whoever learnt anything from history anyway?

    ive been saying the same thing for years as well, we'll be treated like gods now


  • Closed Accounts Posts: 153 ✭✭EastWallGirl


    Andrew I hope for your sake that you do not meet a sociopath.

    They only learn lessons to benefit themselves, never other people.

    In fact their behaviour just gets riskier...

    This has set an awful precedent that they can get away with whatever they want.

    Theie decisions are criminal negligence, the lack of regualtion by the regulator is also criminal. If there was any justice, CAB would go after them and be able to take some of the excessive pension funds as well.


  • Closed Accounts Posts: 78 ✭✭rcecil


    All this was predicted and time has proven sinn fein right on the priorities of the corporate parties in Ireland. baNAMA republic!

    www.sinnfein.ie


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  • Registered Users Posts: 951 ✭✭✭andrewdeerpark


    Sand wrote: »
    Banks are not socialist communes.

    There's the core problem so they are free market PLC's run for profit organistaions that cannot be left fail! What kind of a market is that? In the current situation they can best be described as "socialist communes". NAMA is communism!
    Sand wrote: »
    1 - I dont consider Fianna Fail to be an elite. The application of the word "elite" to Fianna Fail has a certain dissonance.

    Correct FF are not elite, just corrupt, its a real who you know senario here, and how well you contribute to the camapign fund the next time a general election comes around, money = power and brianwashing the public to vote for you, FF are masters of that art.


  • Registered Users Posts: 903 ✭✭✭bernardo mac


    Wheely wrote: »
    I couldn't tell, they msutn't have been wearing their badges.......:rolleyes:

    Of course you wouldn't,appropriately named Wheely;they would not expose themselves or their expensive suits to contamination from the hoi polloi in an A and E.You'd probably spot them in the Sociopathy dept. of a private clinic.:rolleyes:


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