NAMA: why does this HAVE to be a risk?

JonathanAnon

So we've taken on board the debts of the most immoral sector of society. Those who were once advising people how to avoid tax (including Beverly Flynn who was "bailed out" herself), advising the rich to put money offshore to keep it out of the clutches of the government, those who overcharged us illegally until they were caught and forced to refund, and those who took European money and thought it was wise to invest in a pyramid scheme here.

But I have one question that nobody has asked. Why oh why do we have to give fixed estimates for those values of those properties now. Is it not possible to estimate the money required to give the banks now, and then when the properties are sold, either

a) If the property gets more than expected, the government reimburses the bank

or

b) If the property gets less than expected, the difference is also owed to the government.

Why will this not work? Why are we risking the farm on estimations of people who let us down before.

Eutow

It seems estimates were done on what the value of property is currently at. I was looking at our Finance minister - he who has no qualifications within economics or financial markets, or prior financial experience, but still somehow gets a finance job - interviewed on RTE discussing how under NAMA we COULD break-even in ten years if property prices increase from CURRENT LEVELS by 10%. Property prices are currently decreasing and don't look like they will increase any time soon. So, if property prices were to decrease by another 10%, in the next few years that would mean that property prices would then have to increase by 20% in order to break-even. Of course property prices could decrease by more than 10% from current levels, a scenario that would screw us all, except politicians and their friends. When Lennihan was asked what would happen if property continued to decrease his response was just a simple "we would all be in trouble". Property was grossly overpriced and our government is still trying to pin all our economic hopes on property, instead of diversifying our economy and making us more competitive.

Maybe this would not work, but why can't banks be nationalised, and when they start to make a profit, sold back to the private sector at a profit to the taxpayer?

bmaxi

Eutow wrote: »

It seems estimates were done on what the value of property is currently at. I was looking at our Finance minister - he who has no qualifications within economics or financial markets, or prior financial experience, but still somehow gets a finance job - interviewed on RTE discussing how under NAMA we COULD break-even in ten years if property prices increase from CURRENT LEVELS by 10%. Property prices are currently decreasing and don't look like they will increase any time soon. So, if property prices were to decrease by another 10%, in the next few years that would mean that property prices would then have to increase by 20% in order to break-even. Of course property prices could decrease by more than 10% from current levels, a scenario that would screw us all, except politicians and their friends. When Lennihan was asked what would happen if property continued to decrease his response was just a simple "we would all be in trouble". Property was grossly overpriced and our government is still trying to pin all our economic hopes on property, instead of diversifying our economy and making us more competitive.

Maybe this would not work, but why can't banks be nationalised, and when they start to make a profit, sold back to the private sector at a profit to the taxpayer?

When arriving at the concept of NAMA it must be remembered that the only opinion asked or taken was that of Peter Bacon. Given that he is a director of one of the country's largest property development companies, would a conflict of interests arise, do you think?

thebman

Brian Lenihan said in the dail that he believes we are that the property market has bottomed out (or words to that extent).

Does anyone else on this island or off it think that?

Oh yeah I see loads of people just out of college trying to get on the property ladder! Although maybe that was the dole queue

Liam Byrne

To be honest, I don't give a bollox what Lenihan believes; he "believes" that NAMA is the way to go; he "believes" that the budgets to date have been "tough but fair" and he "believes" that FF aren't to blame for the level of the current mess.

So basically he's proven that what he "believes" is as far-removed from reality as is humanly possible, therefore he's either (a) completely delusional or (b) so far up his own arse in the pockets of vested interests that he can lie through his teeth and ignore all the facts.

Bring on the next election; and believe me, previous posts by me about what I did / might do to Fianna Failure candidates who arrive on my doorstep are tame by comparison to what they're gonna get when they arrive this time around......I'm installing a trapdoor over the manure moat as we speak - if they land us in the ****, I'm gonna return the favour!

Sand

NAMA *has* to be a risk because the whole objective is to save bank shareholders and developers. It is deinfitly not in any way, shape or form designed to be some risk sharing vehicle. It is designed to socialise risk, privatise gain and bail out the Golden Circle. BTW, if you didnt buy bank shares 6 months ago....you are not part of the Golden Circle.

NAMA is theft, pure and simple. It is theft from the taxpayer, by Fianna Fail, bankers and developers. Do not let the concept of fairness enter your head when evaluating NAMA. It is not supposed to be fair, it is supposed to pass the banks debts onto your grandchildren.

Mr.Micro

As David McWilliams said the other day Nama is borrowing from to morrow to pay for yesterday. The fallout will happen in years to come and then the slimy politicians will plead ignorance to it all, as NAMA will conduct its operation without the public knowing anything about whats really going on. The whole scam is effectively way of giving the Banks and developers 77 billion plus and plus, and NAMA itself after, will be a toothless sham, like the rest of the FF led Governments projects such as FAS.

JonathanAnon

JonathanAnon wrote: »

So we've taken on board the debts of the most immoral sector of society

Throwing money at people stupid enough to borrow beyond their means is now worse than, say, drug dealing and paedophilia? I one billion percent so love your overstatement.

hobochris

Deleted User wrote: »

Throwing money at people stupid enough to borrow beyond their means is now worse than, say, drug dealing and paedophilia? I one billion percent so love your overstatement.

Financial rape is still rape!

Imposter

Is Nama really a bailout for the builders? If so how? I thought it was just the banks that were being bailed out (the other option was nationalising them) and that the developers are still liable for the loans they have taken out! So ok maybe they won't end up repaying the loans but they will be bankrupted (or whatever it's legally called).

SLUSK

Drug dealing is less immoral than Fianna Fail, this is an objective fact. Fianna Fall has caused more damage to Irish society than any single drug dealer.

JonathanAnon

Deleted User wrote: »

Throwing money at people stupid enough to borrow beyond their means is now worse than, say, drug dealing and paedophilia? I one billion percent so love your overstatement.

1. Okay I meant within the financial sector that they are the most immoral for the reasons that I outlined above. You are being unnecessarily pedantic.

2. "People stupid enough to borrow". I'm sick of this argument that normal people paying out big prices for their houses are somewhat compliant. Most people NEED a house, it is a social necessity. That is why the government give out rent allowance, pay for homes for single mothers and people on the dole - A house is a necessity. However, I have no sympathy for people who upgraded house, to find now that they cant afford the mortgage. My old boss for example, sold his fine house worth 0.75m, and bought a house worth 3m, now has to rent out rooms in this house to pay the mortgage.

thebman wrote: »

Brian Lenihan said in the dail that he believes we are that the property market has bottomed out (or words to that extent).
Does anyone else on this island or off it think that? Oh yeah I see loads of people just out of college trying to get on the property ladder! Although maybe that was the dole queue

Sure that dope Liz O'Kane was saying that this time last year. As long as the dole queues keep increasing I cant see how the house prices are going to increase.

peasant

Imposter wrote: »

Is Nama really a bailout for the builders? If so how? I thought it was just the banks that were being bailed out (the other option was nationalising them) and that the developers are still liable for the loans they have taken out! So ok maybe they won't end up repaying the loans but they will be bankrupted (or whatever it's legally called).

Here's what's going to happen ....

The developers will ALL go bankrupt. The day after that they will set up a new company in their wifes' name and buy their own land back for below market value in the fire sale, financed by their bank with our money ...that then would be the new credit flowing that everybody is talking about

smog

Eutow wrote: »

..... how under NAMA we COULD break-even in ten years if property prices increase from CURRENT LEVELS by 10%. Property prices are currently decreasing and don't look like they will increase any time soon. So, if property prices were to decrease by another 10%, in the next few years that would mean that property prices would then have to increase by 20% in order to break-even.

Worse if they were to drop another 10% they would need 22.2% to rise to the 10% increase prediction (break even point)

bmaxi

peasant wrote: »

Here's what's going to happen ....

The developers will ALL go bankrupt. The day after that they will set up a new company in their wifes' name and buy their own land back for below market value in the fire sale, financed by their bank with our money ...that then would be the new credit flowing that everybody is talking about

Cynical, but not entirely inaccurate, I suspect. I imagine, even if NAMA was the way to go and Jesus Christ himself ( or Mahommed or Buddha or whoever before the PC crowd start), came down to run it, the fact is that people don't trust FF to implement it.
Another poster mentioned that top bankers have lost their jobs, that's true but only to be replaced by another horse from the same stable, a bit like replacing Hitler with Goering.
There is no trust left in the political or financial establishment and, even in the unlikely event that Lenihan is playing the honest broker, it can never be sold to Joe Public as a good deal, primarily because it isn't.

JonathanAnon

peasant wrote: »

Here's what's going to happen ....
The developers will ALL go bankrupt. The day after that they will set up a new company in their wifes' name and buy their own land back for below market value in the fire sale, financed by their bank with our money ...that then would be the new credit flowing that everybody is talking about

Yeah but that's always been the case. I had a friend who was working in flooring at the time of the boom. Was doing really well, and then made the mistake of joining up with another small business and rented a huge premises as a showroom. Business went bust, he closed up and was working under a new name within a few months. Lost a lot of respect for the guy over that. You will always have guys like that whether NAMA is there or not.

peasant

bmaxi wrote: »

Cynical, but not entirely inaccurate, I suspect. I imagine, even if NAMA was the way to go and Jesus Christ himself ( or Mahommed or Buddha or whoever before the PC crowd start), came down to run it, the fact is that people don't trust FF to implement it.
Another poster mentioned that top bankers have lost their jobs, that's true but only to be replaced by another horse from the same stable, a bit like replacing Hitler with Goering.
There is no trust left in the political or financial establishment and, even in the unlikely event that Lenihan is playing the honest broker, it can never be sold to Joe Public as a good deal, primarily because it isn't.

exactly ..the golden circle hasn't been broken ...just temporarily lost a bit of its sheen.