11 billion already spent on banks that screwed up, 54 billion to be spent on NAMA....

nesf

SkepticOne wrote: »

The depressing thing about NAMA is that it is really a continuation of the stupidity that led to the problem in the first place. There is no new thinking gone into it. It is simply transferring the problem from the banks to the public.

That is why several people on here were able to correctly predict that it would be a de facto developer bailout. At the start there were a lot of people parroting Lenehan that this was not the case but now, thankfully, there are few.

Right now it's a bailout for the banks only. It'll become a developer bailout if NAMA starts forgiving debt owed to it by developers. If this doesn't happen the only way out for developers is bankruptcy and in this country that's not a nice process.

It'll become clear over the next year or two whether this turns out to be a bank or bank & developer bailout. So far it's unclear.

Daithinski

PeakOutput wrote: »

assuming its not too late assets can be frozen.

They can transfer their personal assets out of their name up to 6 months, before they go bankrupt. I'm sure most of them already have their houses in order in this regard.

PeakOutput wrote: »

if they are bankrupt they are at at least the same level if not worse off as you are.

Big difference between a developers company being bankrupt and him actually being destitute. See point above.

PeakOutput wrote: »

so why instead of pissing and moaning about these entrepeneurs who create the massive wealth in our country(not saying they werent irresponsible and probably criminally irresponsible) dont you start building up your empire and start a company that will take over were they have left off and fill the gap with an ethical responsible business? why dont you?

I don't know who these entreprenuers are you are talking about. Buying land and then bribing councillors/politicians to get it rezoned to make a pot of money is my definition of a crook not an entreprenuer.

PeakOutput wrote: »

the general begrudgery just wrecks my head

My point is and if you think its begrudgery fair enough (it probably is) but there are a bunch of golden circle crooks running this country. They are abusing the laws of the land and common decency for personal gain. I personally think this is disgusting. You are confused, I've nothing against entreprenuers or people making loads of money, I'm not a communist. But I don't think its right for all these scumbags who have destroyed the economy to be given the chance to do so again. Maybe you do.

PeakOutput wrote: »

these are very very successfull business people who have brought billions into our economy.

Explain how they are "very very" successful if their companies are bankrupt?

Brought billions? Oh you mean all the money the banks borrowed to loan the irish to buy overpriced apartments/houses from these crooks. The money that the banks now can't get back and that subsequently led to NAMA.

I would describe Michael O'Leary as very successful (he is not bankrupt).

I wouldn't choose to put "Property developers" and the words "very very successful" together.

SkepticOne

nesf wrote: »

It'll become a developer bailout if NAMA starts forgiving debt owed to it by developers.

This was Lenehan's line early on that it wasn't a bailout because, on paper at least, the developers would still owe the money.

A bailout doesn't necessarily mean forgiveness of debt though. Most bailouts take the form of credit of some sort. It is a de facto bailout of the developers if they are getting credit on better terms than they would under normal market conditions, and I think it is fairly clear now that that is the case.

gnxx

nesf wrote: »

Why assume all this? What % of those non-performing loans are likely to start paying off again in a year or two? What detail in the loan book have you seen? Etc.

For the loans to magically "start performing" in two years time, would indicate that the borrowing entities are not wound up next year.

Are you suggesting that NAMA will allow "repayment" holidays of 24 months while waiting for these loans to recover? What event will allow the borrowing companies to start repaying the loans? If development companies ( or nama ) start selling properties in the next five years to recommence loan payments, it will be at a significant discount to the expected value.

In short, I don't believe that the loans classed as non-performing loans will undergo some miracle and start performing ( without sacrificing the long term value significantly ).

One final point, if I had seen any of the detail in the loan books, and posted THIS information on the Internet, I would be committing an offence under the NAMA legislation.

nesf

Daithinski wrote: »

They can transfer their personal assets out of their name up to 6 months, before they go bankrupt. I'm sure most of them already have their houses in order in this regard.

You can be sued for moving assets out of your name like this though by your creditor. Like what's happening with the old Anglo chief.

nesf

gnxx wrote: »

For the loans to magically "start performing" in two years time, would indicate that the borrowing entities are not wound up next year.

Non-performing simply means not paying interest at the moment. It can happen that someone may be in a better position to start repaying the loan after a break. Otherwise banks would never give payment holidays to people, yet they do do this with non-performing debt because it can work out more profitable than simply closing up the loan and trying to flog off the collateral.

PeakOutput

Daithinski wrote: »

I don't know who these entreprenuers are you are talking about. Buying land and then bribing councillors/politicians to get it rezoned to make a pot of money is my definition of a crook not an entreprenuer.

sounds like unfounded crap to me to be honest. im not saying it hasnt happened and if there are ever prosecutions brought ill be the first one to support them but its very easy for you to say they are successfull therefore corrupt therefore its all their fault with absolutely no proof

My point is and if you think its begrudgery fair enough (it probably is) but there are a bunch of golden circle crooks running this country. They are abusing the laws of the land and common decency for personal gain. I personally think this is disgusting. You are confused, I've nothing against entreprenuers or people making loads of money, I'm not a communist. But I don't think its right for all these scumbags who have destroyed the economy to be given the chance to do so again. Maybe you do.

who destroyed the economy? the individuals of this country took out massive mortgages they could not afford. they felt entitled to own property for some reason and even felt entitled to own 2 or more houses and buy hosues for their kids. the banks lent money relatively irresponsibly and people took these loans irresponsibly(developers and individuals)

this country is a mess for a variety of reasons and one of them is the general publics careless attitude toward debt one of them is irresponsible lending and one of them is the developers believing this would all go on forever and kept borrowing bigger and bigger and building bigger and bigger. there are also numerous other reasons


also i think knowing how to play / get the most out of the system is completely different to abusing laws if they ahve broken laws they should go to jail end of discussion. this requires proof and due process not just you saying oh well they did this and that and the other they are the devil

Explain how they are "very very" successful if their companies are bankrupt?

lol ye fair point but there are plenty of very smart intelligent succesful people who have been made bankrupt as a result of the global economic downturn

Brought billions? Oh you mean all the money the banks borrowed to loan the irish to buy overpriced apartments/houses from these crooks. The money that the banks now can't get back and that subsequently led to NAMA.

every penny in existence in this country is owed to someone somewhere thats how the system works the banks borrow of the central banks the companies borrow of the banks as do the people its all a big never ending cycle of debt

I would describe Michael O'Leary as very successful (he is not bankrupt).

and i would agree

SkepticOne

The fact that NAMA would become a de facto developer bailout was fairly predictable if you can get your head around the inverted logic that the banks were employing with developers. However vindication of this prediction really only happened when the draft business plan for NAMA was published. Here's Karl Whelan on the the issue:

However, at no point have I suggested that NAMA would be a bailout for developers. I have always believed the Minister for Finance’s assurances that the developers who owed money to the Irish taxpayer would be followed to the Gates of Hell in order to get the money back.

Read on here about why he now knows this not to be the case.

Like I said earlier, most bailouts are not forgiveness of debts, they are simply credit on better terms than under normal market conditions.

nesf

SkepticOne wrote: »

The fact that NAMA would become a de facto developer bailout was fairly predictable if you can get your head around the inverted logic that the banks were employing with developers. However vindication of this prediction really only happened when the draft business plan for NAMA was published. Here's Karl Whelan on the the issue:Read on here about why he now knows this not to be the case.

Like I said earlier, most bailouts are not forgiveness of debts, they are simply credit on better terms than under normal market conditions.

We're not in normal market conditions though. I accept your point about credit however it wasn't the case that developers were being pursued frantically by banks for money so it's not so much an offering of better conditions as it is a continuation of the treatment they were getting from banks. As the old saying goes, if you owe the bank a thousand Euro the bank owns you, if you owe the bank a million Euro you own the bank.

Daithinski

PeakOutput wrote: »

sounds like unfounded crap to me to be honest. im not saying it hasnt happened and if there are ever prosecutions brought ill be the first one to support them but its very easy for you to say they are successfull therefore corrupt therefore its all their fault with absolutely no proof

It might sound like crap. But it isn't. Liam Lawlor? Quarryvale? Mahon Tribunal.
http://www.rte.ie/news/2008/0618/mahon.html

PeakOutput wrote: »

who destroyed the economy? the individuals of this country took out massive mortgages they could not afford. they felt entitled to own property for some reason and even felt entitled to own 2 or more houses and buy hosues for their kids. the banks lent money relatively irresponsibly and people took these loans irresponsibly(developers and individuals)

Fair point. Some people did. Probably a lot of people. But if the government / media tell people stuff often enough people unfortunately tend to believe it. (We are the richest in Europe, fundamentals are sound). You often heard how great we were in terms GDP, but the more important and realistic term PPP (a device used used to balance GDP for realism purposes) is practically unheard of in the media. However, people should know better but they never seem to:(

PeakOutput wrote: »

this country is a mess for a variety of reasons and one of them is the general publics careless attitude toward debt one of them is irresponsible lending and one of them is the developers believing this would all go on forever and kept borrowing bigger and bigger and building bigger and bigger. there are also numerous other reasons)

This is true. But the banks facilitated people borrowing obscene amounts of money. In truth the banks should have known better, maybe they did, but the chiefs were getting too well paid in bonuses to rock the boat. The regulatory system / government looked the other way.

Again, People should know better but they never seem to:(

PeakOutput wrote: »

also i think knowing how to play / get the most out of the system is completely different to abusing laws if they ahve broken laws they should go to jail end of discussion. this requires proof and due process not just you saying oh well they did this and that and the other they are the devil

Fair point. However it seems unusual that nobody in all of this mess seems to have broken a law. Maybe the government was a bit lax by not implenting a few laws to protect the economy/citizens. This, supposedly, is what they are paid to do. Its their primary function.


But again, a large proportion of people in this country saw and were happy with FFs dodgy way of running things. And so again, People should know better but they never seem to:(

What does it say about the Irish people as a whole that the muppets in power are what a large chunk of us admired and aspire to?

All I know is I'm fed up living in this country with its grubby, mickey mouse politicians running the show. I'm outta here first chance I get.

SkepticOne

nesf wrote: »

We're not in normal market conditions though. I accept your point about credit however it wasn't the case that developers were being pursued frantically by banks for money so it's not so much an offering of better conditions as it is a continuation of the treatment they were getting from banks. As the old saying goes, if you owe the bank a thousand Euro the bank owns you, if you owe the bank a million Euro you own the bank.

This is the basis of the prediction that there was going to be a bailout. The banks were rolling up interest into loans for developers and not going after them but their capacity for continuing to do that was coming to an end. Normal market conditions, where abject business failure is punished, was about to return. Thus the State in the form of NAMA steps in to continue credit on better terms than the market can now provide: a bailout.

recedite

SkepticOne wrote: »

Normal market conditions, where abject business failure is punished, was about to return. Thus the State in the form of NAMA steps in to continue credit on better terms than the market can now provide: a bailout.

This is true, the main effect of Nama is to put in place a safety net to prevent the accelerating freefall in valuations of the developers properties.
If they had been forced to sell at any price to get immediate cash, or in bankruptcy, it would have been freefall. In this situation loan value = property face value, not some optimistic future value.
Herein lies the paradox of Nama. On the one hand, by protecting property prices it may become a self fulfilling prophecy whereby the properties are eventually sold off at a breakeven rate,or even a modest profit.
The interest paid by govt. on the Nama bonds is the price of preventing an economic collapse. Or more accurately a collapse of "systemic" (eg Anglo bank:D but NOT Rabobank)sectors of the economy.
On the other hand, maybe we would all be better off if "normal market forces" were allowed to replace the incompetents with the competents.

recedite

I can think of two occasions in recent years where govt. on behalf of the state has written an open cheque to indemnify a group of people on the basis that the consequences of allowing them to go down would be too horrible to imagine.
The bankers/developers is one and the clerical abuse payments is the other.
Draw your own conclusions.

Minder

Turn over of threads is quite rapid here and sorry if I've elbowed my way into an argument that is unrelated to my question.

As of Sept 09, Irish Central Bank holds 32.7 billion dollars of US Treasury Securities

Is the rate of sell off of US Treasury Securities measured within the current swingeing measures in the budget? Clearly the measure of Treasury Holdings in December 09 will be somewhat less than the 32b posted in Sept 09 if the trend of the previous six months is any indicator.

Or does the Irish government take from the taxpayers while supporting the ravenous appetites of the debt ridden US consumers for the greater good?