Can someone please explain to me why NAMA is even needed?

irish_bob

Idbatterim wrote: »

I assume the only reason bank shares fell from €18 to €.20 was that there were huge fears that they were going to be nationalised?

+1

no where in the western world have shares fallen more than in ireland in the past twelve mths , most were waiting for a sign that the banks would be protected , anyone who bought shares in the past few mths is up a fortune beit big or small but i see a sizeable sell off in the next week , the banks gains were not in anway based on merrit , they got a massive handout and many who bought in the past week will be happy with thier windfall and bail out again as thier is nothing in the wider economy to maintain large increases in share value , im not saying they will collapse again but last night was a once in a lifetime bonanza

starbelgrade

djpbarry wrote: »

I’m not mocking people who have gotten into difficulty, I’m mocking a certain attitude, .

Saying "boo-f*cking-hoo" as a response to a question about somone who's in financial difficulty is not mocking?

"I lost my arm because I stuck it in a machine"... "Boo-f**cking hoo, it's your own fault".

The person who lost their arm, or lost their house or assets, whether it be through their own fault, or because they were codgered into it.. well, the last thing they need is a "boo-f*cking-hoo" response.

It helps no-one.

Yes, we are all collectively responsible for the mess we are in. Some are more responsible for it than others. Some are personally more responsible than others.

We get that.

Last thing anyone needs is the higher than mighty attitude of.. "well, what do you expect? You shouldn't have expected that the job you had for the last 20 years would always feed your family - you've only yourself to blame"

Boo-f*cking-hoo.

How the hell did you even get to be a Mod? They should have made you a God instead.

Boo-f*cking-hoo.

Senna

Idbatterim wrote: »

I assume the only reason bank shares fell from €18 to €.20 was that there were huge fears that they were going to be nationalised?

Nationalised, collapsed etc, those share prices were based on a bubble and wont return to those levels unless we have another monumental bubble, please god we wont. The fall was the realisation that the banking system was a house of cards, built on nothing.
The 20-25% rises seen since yesterday were an indication of just how good a deal the banks got, and if they get the good deal someone else gets the bad deal....taxpayers.

As Lenihen said in his speech, NAMA is meant to protect banks from going into a "10 year Japan style zombie banking system", NAMA isn't to protect the banks from collapse, its to free up credit. There wont be a run on any bank as the state guarantee will largely stop that, without NAMA we will have banks functioning as they are at the moment, lending to business and people who are secure, not taking risks and looking for collateral and deposits to back up loans.
What i cant understand is what Lenihen actually thinks will happen once all the loans are transfered off the banks book, does he think they will go back to lending like they were in 2006?
Even they now know how reckless that was, they have just came from the brink of collapse (sept 08) they are going to be more cautious, no-one can or is forcing them to lend, so why would they? If they wont lend to someone today (as they deem the risk too big) will they decide tomorrow that its OK now, we'll give you the money, but there's still the same risk, It simply wont happen.
NAMA is a huge gamble at our expense, the best case scenario, as far as FF is concerned, is banks will lend more to business (or i'm sure they hope FTB's), but why would they? They had their fingers burnt, they got lucky with NAMA, they wont go back to previous lending levels.

Colpriz

Why was Ireland the first country in Europe to fall into recession???

Iceland was drowning, the UK pushed them under with some 'terrorist' banking laws or other so they could at least claim taxes on monies invested etc yet dont claim offshore taxes from the likes off the Isle of Mann...

WTF have this country been doing with money? Spending.. yes of course..where?

Why cant we freeze assets of Irish banks..pay up..we dont own a fcuk here!

Amhran Nua

Interesting post on the ability to pay and losing jobs from another forum:

This thread depresses me because I know that it is true. I own a small business, it's probably one of the nations smallest right now as it only employs me and for how much longer I don't know.

Over the years I built up a large fund to cover me in case of illness, in the event that I wanted a career break or a slowdown in the economy.

I've been using that money rather sparingly since January and now it is starting to run out.

Since Xmas I have been paying myself a few hundred a month to cover the mortgage (it's a small mortgage) and using our family savings for day to day living.

I've been trying to save the business since the start of the year. I've brought a few quid through the door but it's not enough.

This time last year I employed 6 people - all of them were making good wages (in the region of €35,000 /€40,000 a year - they were producing the results and they were being properly rewarded).

Now it's just me.

I have a wife and kids. Every day is a battle, hoping that bills won;t come through the letter box, hoping that the kids don't get a letter home from school looking for money and stuff like that.

After 20 years of working and never claiming a penny I swallowed my pride last week and made an enquiry about Jobseekers Allowance. I knew that because I was a proprietary director of a company that I was entitled to very little - but I figured that even if it was 50 quid a week that it would go towards the weekly grocery shopping.

After jumping through hoops I was informed that I am entitled to seven euro a week. However a payment of that amount is under the minimum amount that they will pay out - so if I want that seven quid a week I must appeal the case. To do this I need up to date books from my accountant (which will cost a thousand euro).

So for creating employment in this country and paying my taxes for twenty years - I am now entitled to seven euro a week - but I can't have it.

When I heard that it was all I was entitled to I broke down. It killed me to have to do it and then to be told that I wasn't actually going to get anything just tipped me over the edge.

I was ashamed of myself and angry at the way things had worked out.

Then I was told to make sure that I kept up my PRSI payment to ensure that I received my pension when I hit 66.

That's over thorty years away. I can't see beyond this week never mind 2040.

My business is all but gone, I'm only still trading because I have nothing else to do - there are no jobs out there and I should know - I've being looking for 8 months.

As bad as I feel about all of that - how do you think I feel when I read that John O'Donoghue is taking the mick with expenses or when Brian Cowen tells us that we are living beyond our means.

I, my wife and our kids are living within our means at the moment - but only just and our means are very limited.

When the nestegg runs out what is going to happen to me and all the others.

I dread to think.

djpbarry

kippy wrote: »

How does one prepare for unemployment?

The most obvious answer I can give is save some money. Everyone should have, at the absolute minimum, a couple of months worth of wages stashed away in a savings account.

kippy wrote: »

The banks have no time for hardluck stories from people like Joe.

What does this mean exactly? The banks are out to get people? Because I don't accept that - it's not in their interest.

kippy wrote: »

People HAVE to shoulder some of the responsibility themselves especially in the case of reckless borrowing. But there are lots of people out there who haven't borrowed recklessly but who may have followed all the advice and commentary coming from economists, state and private institutions over the years and who now find themselves out of a job with a mortgage that was completely manageable to pay before hand....

I accept that there are always going to be exceptional cases. Sometimes people end up in difficult circumstances through no fault of their own. It’s obviously impossible to completely eliminate risk, but a little prudent planning can still help to minimise it. But generally speaking, this country is where it is due to utterly reckless financial planning, from the bottom up. Granted, the global recession was beyond our control, but we could have gotten ourselves into a much better position to weather the storm.

Amhran Nua wrote: »

That responsibility starts and ends with their mortgage repayments however.

It sure does, but if everyone was paying their mortgages, we wouldn’t be here right now.

djpbarry

starbelgrade wrote: »

Saying "boo-f*cking-hoo" as a response to a question about somone who's in financial difficulty is not mocking?

I posted this on another thread, but I think it’s worth repeating here:

djpbarry wrote: »

You’ll have to excuse my less-than charitable attitude towards “these individuals” who willingly burdened themselves with absolutely ridiculous levels of debt that they obviously could not afford. I know of one couple (one is an accountant, the other an investment fund manager – go figure) who paid over €400,000 for a 3-bed house in Maynooth at the beginning of 2007, all the while scoffing at me (and others) as I continued to rent. I obviously questioned the wisdom of their decision and suggested that maybe they should consider renting a place together first (they were both living with their parents at the time), but they both insisted that rent was “dead money” and they would be better off buying a place as it represented an investment – the concept of a savings account or term deposit was obviously lost on them. They are undoubtedly up to their eyes in negative equity now and you’ll have to forgive me if I feel like pointing and laughing while chanting “I told you so”.

Now, granted, not everyone paid way over the odds for their homes and some may have considered the price they paid to be quite reasonable. But there is no such thing as a risk-free investment. If you buy a home, at any price, you have to accept the associated risks, such as the fact that there may well be a time in the future when you are unable to keep up your mortgage payments. Refusing to acknowledge such risks is very foolish.

kippy

djpbarry wrote: »

The most obvious answer I can give is save some money. Everyone should have, at the absolute minimum, a couple of months worth of wages stashed away in a savings account.
What does this mean exactly? The banks are out to get people? Because I don't accept that - it's not in their interest.
I accept that there are always going to be exceptional cases. Sometimes people end up in difficult circumstances through no fault of their own. It’s obviously impossible to completely eliminate risk, but a little prudent planning can still help to minimise it. But generally speaking, this country is where it is due to utterly reckless financial planning, from the bottom up. Granted, the global recession was beyond our control, but we could have gotten ourselves into a much better position to weather the storm.
It sure does, but if everyone was paying their mortgages, we wouldn’t be here right now.

People have savings, a lot have significant savings, but you are aware of how fast this can be eaten into without an income, mortgage, living, insurances, food etc etc.


The be honest the main reason the country is in the ****ter is not because of joe soap not being able to pay his motgage (although that will inevetibily happen and will cause more strife for our banking institutions). The main reason for NAMA is because of all these gambling banks and developers who paid way over the odds for property and didnt get out in time. There are obviously many reasons.

I've said this to friends before.
Debt is FINE, as long as you can manage it, afford to pay it back. However when you lose your main asset, your job, everything goes belly up, even with a prudent savings mindset.
While there were people who lived recklessly, the vast majority did not, yet still end up paying for others mistakes.

Count Dooku

me@ucd wrote: »

the profoundly dirty secret is that the banks cant be allowed to fail. Banking = Civilisation (or so the powers that be would lead us to believe)

If banks will fail, country can lose up to 10% of GDP, because economy will paralysed for one-two months.
Looks how it happened in Russia

The same would happen here, if government would allow to banks fail. Of coarse, it happened anyway and GDP will be down 10% by end of this year and Ireland lost good chance for recovery, but nobody is personally responsible for this

goingpostal

PCPhoto wrote: »

(I dont know what I'm rambling on about its after 2am...hardly a time for political/economic debate or discussion....im off to sleep)

Loved that last sentence. Sounds like me at my finest moments.

starbelgrade

djpbarry wrote: »

I posted this on another thread, but I think it’s worth repeating here:
Now, granted, not everyone paid way over the odds for their homes and some may have considered the price they paid to be quite reasonable. But there is no such thing as a risk-free investment. If you buy a home, at any price, you have to accept the associated risks, such as the fact that there may well be a time in the future when you are unable to keep up your mortgage payments. Refusing to acknowledge such risks is very foolish.

Blah - we know that. Everyone knows that.

But, what exactly is you point, beyond laughing at the "fools" & adding more smug to your smugness?

Idbatterim

but dose the fall from €18 to .20c not show madness and a total lack of reality? its like everything here, one extreme to the other, the bank probably sure as hell werent worth €18 a share, the same way that there sure as hell werent worth as little as €.20 a share. God I dont know why I didnt buy share at the low price, it was a win win! Realistically the government were always going to look after their own and bail out the fat cats!

Idbatterim

surely the best aspect of the collapse in home prices, share prices etc is that this will hopefully never be repeated again to the same level? i.e every average joe moron buying propperty, shares etc, creating one massive bubble again! where everyone is buying, because of the fear that they will pay more tomorrow?

djpbarry

kippy wrote: »

The main reason for NAMA is because of all these gambling banks and developers who paid way over the odds for property and didnt get out in time.

None of which would have happened if people were not prepared to pay obscene amounts of money on their property obsession.

kippy wrote: »

While there were people who lived recklessly, the vast majority did not...

I wouldn’t be so sure about that – I suspect that the people in this country who were living way beyond their means constitute more than just a small minority.

starbelgrade wrote: »

Blah - we know that. Everyone knows that.

If everyone knows that then why is this country up the proverbial creek? Face it – there exists a very large number of people in this country who made profoundly stupid decisions to buy badly built properties in badly planned communities at astronomical prices that they couldn’t really afford. We all know at least one. I just cannot buy into this notion that our economic implosion is all the fault of the banks, developers and Fianna Fáil. Sure, they were culpable, but they couldn’t have done what they did without the participation of the electorate.

starbelgrade

djpbarry wrote: »

I just cannot buy into this notion that our economic implosion is all the fault of the banks, developers and Fianna Fáil. Sure, they were culpable, but they couldn’t have done what they did without the participation of the electorate.

I agree with you entirely on this point, but what p*sses me off completely, is that while the banks are being sorted out with OUR cash, by the politicians who colluded with them, and developers, to create a bubble which Joe Soap fell in love with, Joe Soap is left up the preverbial swanny, whilst the politicians & bankers keep their jobs & the developers just cut their losses & file for bankrupcy.

Yes, we are all part of the downfall, but we the taxpayers are the only ones who have to pay the price for it.

And there are very few who have the luxury of "boo-hooing" those who are suffering because of it.

And there are a LOT of people who are suffering. To scoff at this, is to me, a disgusting standpoint.

SkepticOne

djpbarry wrote: »

Boo-****ing-hoo. Joe Soap shouldn’t have borrowed more money than he could afford to repay. It takes two to tango.

I would have some sympathy for this view if it were not the case that bankers who failed to run their businesses correctly are now coming cap in hand to the same Joe Soaps for handouts.

Hobo Sapiens

NAMA is theft on the largest scale ever seen in this country. Simple as.

Stop NAMA - vote No

Mena

Hobo Sapiens wrote: »

NAMA is theft on the largest scale ever seen in this country. Simple as.

Stop NAMA - vote No

I think you're a little confused. It's Lisbon II you're voting on, not NAMA. May be handy to know that come October

Hobo Sapiens

Mena wrote: »

I think you're a little confused. It's Lisbon II you're voting on, not NAMA. May be handy to know that come October

Yeah, thanks for pointing out the obvious.

I already voted No last year - why am I asked to vote again? It's unfair, and bordering on fascism.

I'm voting No to Lisbon because it's precisely the same treaty that was put before us last year. The treaty is a threat to democracy.

Mena

Hobo Sapiens wrote: »

Yeah, thanks for pointing out the obvious.

I already voted No last year - why am I asked to vote again? It's unfair, and bordering on fascism.

I'm voting No to Lisbon because it's precisely the same treaty that was put before us last year. The treaty is a threat to democracy.

Before spouting rubbish about threats to democracy and fascism, perhaps step outside of your mollycoddled European existence and realise what a lack of democracy and true fascism are.

As for being unfair and undemocratic, the (rather silly) issues most people had originally were addressed so, in true democratic fashion, the question is being posed again.

me_right_one

Fairly depressing reading in this thread.

@ djpbarry, what do you think is a reasonable price for a house? You say people should have had more sense than to buy badly built, badly planned houses at bad prices? WTF? Do you think that houses were better built in medievel times?

And what amount of money is adequate to spend on buying a house in your opinion? From talking to any old timers, you will quickly get a lesson on inflation. Back in the day, people earned 3 pence a week, then a schilling, then a pound, then three pound, then twenty pounds etc. Prices / wages only ever go one way, so it only makes sense that people bought up while they could! Sure there's fluctuations, sometimes even recessions, but generally whatever you pay for something now will seem cheap in 20 years. It always works that way.

To say the couple you knew were daft to pay 400k for their house in Maynooth is ridiculous. Its all about supply and demand, if thats what they were making at the time, thats what they were worth, bubble or not. How much do you think they should have paid? I guarantee you they would still get 280k - 300K for it now. So all in all, that couple would be down about 60k each. They will prob be out about 1k per year for the rest of their lives. Not great, but not a doomsday scenario, and it certainly wasnt their fault!

@ Homo sapien, NAMA isnt saving any developers. They still owe money, and will never build or do business again. Its not saving any bankers either, its saving the banking system. Its like repairing the roads, so they will be ok long-term, instead of throwing money away on constantly repairing tyres, which are disposable. I know its a pain, but who do you think should pay for it? The govt? WE are the govt, us, the people of Ireland!

Look people, I know its all doom-and-gloom, but think of it this way. We're already a full year into this recession, which wont be any longer then 5 or 6 years long. The worst thing to EVER happen to Ireland was the famine (which wasn't pissing time ago in the larger scale of things), we were occupied by an agressor, had our population of 8 million reduced to 1 million, but we survived and bounced back. And that only lasted 5 years! The next worst thing to happen was WW2, and eventhough we wern't directly involved, it still affected us. Half of Europe was in rubble, jobs and money were laughable fantasies for most, and we survived. THAT only lasted 5-6 years too. The third worst things were the Independance and Civil wars, we survived them, and there's people still alive who took part!

We'll be alright;)

jackofalltrades

me_right_one wrote:

@ djpbarry, what do you think is a reasonable price for a house? You say people should have had more sense than to buy badly built, badly planned houses at bad prices? WTF? Do you think that houses were better built in medievel times?

There are still houses from the Medieval times standing to this day, i'd bet againtst one of Zoe Developments concrete monstrosities standing in a few decades times let alone a few hundred years.

@ Homo sapien, NAMA isnt saving any developers.

Yes it is, it's going to give the developers as much time as they wan't to get back on their feet so that they can start being profitable again and start paying off their loans. You just have to look at how the state, through Anglo Irish Bank were willing to lend millions to Zoe developments even though their business plan was complete BS.

They still owe money, and will never build or do business again.

Whats to stop them never doing business again? There's a provision in the NAMA legislation to give them more money to finish off their developments if the Minister for Finance see's fit.

Its not saving any bankers either, its saving the banking system.

How many of the boards members or other high ranking officals of the banks that are covered by the state bank guarantee scheme have been fired or called to account. NAMA is saving banks that don't need to be saved, that primarly lent to the property sector and that will have little or no effect on this coutries economic recovery.

Liam Byrne

jackofalltrades wrote: »

How many of the boards members or other high ranking officals of the banks that are covered by the state bank guarantee scheme have been fired or called to account. NAMA is saving banks that don't need to be saved, that primarly lent to the property sector and that will have little or no effect on this coutries economic recovery.

+ 54,000,000,000

If the idiots at the top of a system screw it up, do you (a) throw money at it or (b) get rid of the idiots ?

Fianna Failure's approach is to do (a) first, and then use that money to allow (b) to POSSIBLY happen, if THOSE IDIOTS so decide - i.e. don't fire them, whatever you do - make sure you pay them off using as much money as possible, including giving them severance pay, bonuses, pensions, etc....

If I'd cost a company billions due to crap decisions, or cost a country billions by having a title of "regulator" but not actually doing any regulating, I'd get my coat myself and I wouldn't expect a golden handshake or my pension, that's for sure! :mad:

Tech3

me_right_one wrote: »

@ djpbarry, what do you think is a reasonable price for a house? You say people should have had more sense than to buy badly built, badly planned houses at bad prices? WTF? Do you think that houses were better built in medievel times?

Reasonable price for a house is one that a person can afford. Allow inflation and the mean price of a house before the boom started then you have an average price for a house. 3 bed semis in a big housing estate in Cavan, Longford, Roscommon etc are even worth less than that. It has been found that many properties over the boom have found to be badly built requiring an awful amount of maintenance which has pointed to shortcutting the process of construction.

To say the couple you knew were daft to pay 400k for their house in Maynooth is ridiculous. Its all about supply and demand, if thats what they were making at the time, thats what they were worth, bubble or not. How much do you think they should have paid? I guarantee you they would still get 280k - 300K for it now. So all in all, that couple would be down about 60k each. They will prob be out about 1k per year for the rest of their lives. Not great, but not a doomsday scenario, and it certainly wasnt their fault!

Not worth replying as I've highlighted how hideous the bolded section is.

@ Homo sapien, NAMA isnt saving any developers. They still owe money, and will never build or do business again. Its not saving any bankers either, its saving the banking system. Its like repairing the roads, so they will be ok long-term, instead of throwing money away on constantly repairing tyres, which are disposable. I know its a pain, but who do you think should pay for it? The govt? WE are the govt, us, the people of Ireland!

NAMA is delaying the enitable.... a total collapse of the property market. Roads repaired ok long term? Never seen them. For a road to be ok longtern it needs to be layed correctly with proper granualted material with CBM and final wearing courses. A bit like NAMA a big pothole waiting to happen

We'll be alright;)

It depends, those who didnt buy into the property market should be ok but will be shafted with taxes but for those who did....... who knows

falabo

because after bailing out the banks, they felt it wouldn't be fair not to be bailing out the developers. Our wonderful governement felt the citizens of ireland who are all in negative equity don't matter.

djpbarry

starbelgrade wrote: »

And there are a LOT of people who are suffering.

How many is “a lot” and define “suffering”.

me_right_one wrote: »

what do you think is a reasonable price for a house?

It depends on the means of the buyer – the price is reasonable if the property can be purchased without overstretching oneself financially, I suppose.

me_right_one wrote: »

You say people should have had more sense than to buy badly built, badly planned houses at bad prices? WTF?

Do you think that the majority of properties constructed in this country in the last ten years were built to a high standard? Because I’ve viewed new houses with walls so thin I could watch the TV in the neighbour’s living room.

me_right_one wrote: »

So all in all, that couple would be down about 60k each. They will prob be out about 1k per year for the rest of their lives. Not great, but not a doomsday scenario, and it certainly wasnt their fault!

The fact that they have lost money isn’t their fault? So whose fault is it? If people are not responsible for what they do with their own money, who is?

Liam Byrne

djpbarry wrote: »

It depends on the means of the buyer – the price is reasonable if the property can be purchased without overstretching oneself financially, I suppose.

?? By that reckoning if someone's a billionaire then €10 million would still be "reasonable" for a poxy 2-bed + boxroom terraced house ?

Or conversely, now that everyone is strapped for cash, the same 2-bed + boxroom should be sold for €30,000 ?

To me, "reasonable" means purchase price + effort and materials added + a small profit.

Finally, it definitely implies that Lenihan has failed to purchase stuff for NAMA with our money for a "reasonable" price! :mad:

me_right_one

me_right_one wrote: »

We'll be alright;)

ah get out of it. It is actually stupid to say that the recession could last 5 or 6 years but "we`ll be alright".

A real "let them eat cake moment"

Think about what you post :mad:

djpbarry

Liam Byrne wrote: »

?? By that reckoning if someone's a billionaire then €10 million would still be "reasonable" for a poxy 2-bed + boxroom terraced house ?

Maybe, but realistically, that’s not going to happen too often.

If everyone was only paying what they could reasonably afford, then prices would not have climbed as high as they did.

Sand

If everyone was only paying what they could reasonably afford, then prices would not have climbed as high as they did.

What your are forgetting is that at a time of record high employment, record wage increases, record low interest rates and incredibly easy access to credit...people were paying what they could reasonably afford.

House prices didnt rise because people love paying more than they have to.