NAMA-Why do we take it lying down?

woodseb

Liam Byrne wrote: »

So we're getting a "haircut" from a not even an old, but a fictional balance sheet amount ?

And FF still insist on calling it a "discount".

:rolleyes:

for the last time "discount to book value":rolleyes:

they may have been spinning it alright but i don't think they are hiding it

as it says in the link you provided before
http://www.rte.ie/business/2009/0916/nama.html

Finance Minister Brian Lenihan has told the Dáil that the National Asset Management Agency will pay an estimated €54 billion for loans with a book value of €77 billion from the banks. He said this represented a discount of almost 30%...........

The Minister said that current market value of the loans was €47 billion, and the estimate for the long-term economic value added another €7 billion. He said banks cannot be forced to sell assets at below rational prices.

It is clear that they are paying 54bln for something that is worth 47bln now and were held at 77bln on the books

ballinatray

Brussels Sprout wrote: »

So to answer my original question the consensus so far from the responses appears to be that in general people dislike NAMA but don't see any alternative. Ok I understand that (although I'm definitely not convinced that it's the correct way to go).

What absolutely kills me though is that the same people who steered us into this mess with their 'soft landing' talk are now charged with getting us out of it. I mean they've already shown that they couldn't manage a boom-shouldn't we be looking to an alternative to manage the bust?

Imagine if this had happened in France!

Lets hope the rest of the electorate think like you.....I certainly will not forget that this government with its cavalier economics without direction has destroyed the future for my children..!!!!This Gov should not be permitted to manage whatever solution is decided....

ballinatray

Welease wrote: »

No need to take that attitude..

You do realise a lot of the banks around the world were in exactly the same postion due to the sub prime issues in the US? So in all probability, no bank would have had the time, funds or bothered to come to a tiny market like Ireland.. So no, they wouldn't have just popped in to save us. Meanwhile more business's are going to the wall in Ireland because credit has dried up..

And its still dry out there....Whatever the solution will be this gov. should not be allowed to be part of the solution. I believe their cavalier economics made our situation worse....Read my thread under the title " Government responsible for collapse of economy "....Overall morgage borrowings here are 10 times higher than Germany and even with its so called sub-prime crisis we are still 4 times haevier in debt than the US..Government policy was seriouslu negligent...Lemass and Whittaker must be weeping..

So I ask again... if you don't do NAMA, then how do you get credit flowing to those who need it?

And its still dry out there....Whatever the solution will be this gov. should not be allowed to be part of the solution. I believe their cavalier economics made our situation worse....Read my thread under the title " Government responsible for collapse of economy "....Overall morgage borrowings here are 10 times higher than Germany and even with its so called sub-prime crisis we are still 4 times haevier in debt than the US..Government policy was seriouslu negligent...Lemass and Whittaker must be weeping..

ballinatray

MysticalRain wrote: »

I really despair for this country sometimes. At this point I consider FF to be nothing more than a bunch of traitors to their own country. I am becoming more and more convinced that we will always be a country of losers, except for a handful of well-connected insiders.

Vote with your feet next time as well as the head....It is my view that Gov policy exagerated our financial problems and yes we are or will soon be back to the 50's economically...Read my thread title " Gov responsible for collapse of the economy "....Lemass and Whittaker must be weeping...

ballinatray

Liam Byrne wrote: »

That's not strictly true.

Despite the hole that Ahern, Cowen & Lenihan have led us into, and despite the fact that there's now no choice but to do SOMETHING like NAMA, there are alternatives.

1) Buy the bank shares off the scheisters that are running them - AT CURRENT OR PRE-GUARANTEE PRICES; if they don't agree, tell them to f**k off and rot

2) Buy the loans at CURRENT PRICES - like I said, by all means put in a proviso that the bank gets some share of the "profit", but the current one - paying more than they're worth and charging the bank later if they make a loss - is a joke, considering that the banks don't have any money

I mean, no-one would conduct ANY business the way the Government have; bailing out without looking and "trusting" the corrupt shower of ***ks to do the right thing, with no legal obligations to do so, and no comeback if the developers and/or the banks go bust

There should be 3 million* people marching on Dail Eireann to object to this; those working in there are OUR EMPLOYEES; not our "masters".

* The 25% that answered a certain way to last Sunday's poll wouldn't march on Dail Eireann if FF fired a nuke dead straight upwards into the sky

Indeed sad really to see the increase in popularity at the polls....The fancifull Irish have short memories..Back in 2003 when the EU central warned Mc Greevy about overheating the economy he stuck his bombastic personality in the air and shouted back that our economy was the envy of Europe......Indeed it is the envy of the european elite who wonder how the gov got away with the profligacy and are looking for lessons on how to manipulate.....

ballinatray

Welease wrote: »

Well I'm not talking specifically about those, but yes they did.. I am talking about the average business around the country that need credit lines to purchase raw materials, services, capital costs, generate credit lines themselves for their suppliers/customers etc.. Business's need credit lines available in order to function, without those many healthy viable business's go bust.. Someone somewhere has to provide that credit so our economy can function.. NAMA is apparantly that solution (again, i don't know if i agree or disagree with it, but while so many condemn it they don't seem to offer a viable alternative, so in the absence of that we need to do NAMA)

Whatever the ultimate solution will be , it should not include this government at the table, !!!!!!!!ever.

Liam Byrne

woodseb wrote: »

for the last time "discount to book value":rolleyes:

I know exactly what you mean, so less of the patronising rolleyes, please. You can direct those at Mr Lenihan if you feel the need to use them.

woodseb wrote: »

they may have been spinning it alright but i don't think they are hiding it

It is clear that they are paying 54bln for something that is worth 47bln now and were held at 77bln on the books

I don't do bull**** or spin. I do facts.

That "held at 77 billion on the books" is fictional, and so there is no "discount". So why doesn't he come out and be honest ? At least I'd respect him on some level for that.

Using the word "discount" implies (to a less-informed person) that they are getting some sort of a deal, a discount from a real price.

The local dodgy car salesman might make up a price in order to con you into thinking that you're getting a discount, but banks and Government should not, especially when they're playing idiotic with our money.

And while I haven't fallen for their lies and bull, many people might; hence their bounce last weekend.

People should be highlighting this more - that the 77 billion was a fictional figure and therefore there is no discount.

Liam Byrne

PeakOutput wrote: »

from my knowledge of them they were the latter and also they cant be fired as they arent employed by the goverment hence why i said they are independant they are only contracted to give their opinion

Since when can you not fire an incompetent contractor ?

ballinatray

Brussels Sprout wrote: »

I'd be interested to hear what people have to say about David McWilliam's solution to the crisis.

He agreed that there was no easy way to solve the crisis but he advocated a big hit now in order that we could recover faster (like an amputation I guess)

He proposed not renewing the bank guarantee when it expires later this year and letting the banks sink or swim. In all likelihood they'd fail and the loss would be borne by the bond holders (who he claims are owed nothing since they are effectively gambling by buying irish bank bonds).

His second action would be to pull out of the euro so that we have control over our interest rates again and to then devalue our new currency in order that we can be immediately competitive.

Control of interest rates is always a solution to inflation true but whilst that was handled by Frankfurt then it was necessary for Gov here to remove the other obstacles to a stable economy ie. all the incentives given to landowners ( reductions in Capital gains tax ) and investors Section 23, urban renewal, many offering 100% tax allowances... The euro is not at fault for this Gov policy in the face of it is and therefore they should not be part of the solution....Throw them out the front door of the Dail and I am sure we will hear Lemass and Whittaker laughing from above and cheering too !!!!!!!

PeakOutput

Liam Byrne wrote: »

Since when can you not fire an incompetent contractor ?

sorry you can cancel the contract alright but i meant the economists wont lose their jobs as they are the smartest economic minds in the country and have way bigger contracts then the goverment

ballinatray

Welease wrote: »

Maybe, Maybe not Prices will rise over time... they always have they always will.. that's inflation... My parents house cost a fraction of the cost 40 years ago, and was worth 20 times that even before the boom started. So the prices that NAMA paid will in all likely over time exceed what they paid.. this is what i was attempting to explain earlier (where i missed the 30% ).. the real term profit will be decided on whether the increase in the value of those properties has increased more than we paid for them PLUS inflation in the years it took to reach that new level. The silly days were silly because of the quick explosion in prices.. sustained growth over years will happen.




Well that was the point of the thread, to get some suggestions and we can discuss the merits of each Whats the point of marching on the Dail complaining if people can't think of a better idea. You have provided a idea, and personally i think it interesting to discuss the merits.


Well exactly, i was merely attemping to discuss the scheme, and you took exception to that.. No offence was meant on my part.. But like everything else, if people are prepared to rip NAMA to shreds, then we should at least give due diligence to alternatives.


lol trust me, i have never voted FF (nor am i a particular supporter of NAMA as such).. I used to term to clarify we were talking about the same 30% which i had missed, and it was the common term used by NAMA and the media.


Well in fairness, i have seen only your and the McWilliams ones.. and all have their merits and failings.. So nothing jumps out as being so much better than the vilified NAMA (just my opinion)


It does.. But there are some parts that don't seem to add up (to me anyway).. again if we can pull apart NAMA we should subject alternatives to similar rigour.



Celtic Tigers over mate.. 200K is the most I'm paying

David Mc Williams produced these figures in 2007.....German morgage debt to GNP ratio...16%... US morgage debt to GNP ratio..48%..and wait for it Irelands morgage debt to GNP ratio ..198%... For F...Sake does that not show the carelessness and Gov is still at speculating with NAMA property...Whatever the solution will be this Gov should not be part of it...Read my thread titled " Go responsible for collapse of economy. I am not blaming the bankers entirely...Just like a dog will chase a cat so too will a banker chase money... There was no dog warden though ...for the banks...

ballinatray

woodseb wrote: »

i've read through your discussion with wealease and you both seem to have your facts muddled on NAMA

i don't know where you are getting that property prices have to rise by 30% to breakeven

NAMA is paying 54bln for assets that are held on the bank's books at 77bln - so we are paying a 30% discount to book value (not premium). Bare in mind that the banks have already written down the book value of these loans somewhat due to impairments.

Now, NAMA estimates that the actual current market market value of these loans may be around 15% less that the 54bln paid - therefore property prices do not have to recover substantially over a 10 year period to breakeven if estimates are correct.

We can debate all day though where the true market value of these loans are now - they will all be a matter of opinion and not fact until they are actual realised

I am sure Bernard McNamara would love your estimated valuations particularly as his consortium paid 460 Million for the Glass Bottle site now valued by Lisneys at 60 million...If nama had been unfortunate to take it on board they would be paying 300 million or so ( 30% discounted... Wow!!!)...

fontanalis

At what valuation basis do the banks value the property, credit pyamid peak level or a bit after. Doesn't NAMA's success depends on prices reaching peak level, if property falls by 40%, then it will take an increase of 66% form that fall to reach peak values (if they fall by 50%, it will take a 100% increase).

ballinatray

PeakOutput wrote: »

correction: its what their top (independant) economic advisors advised them to do.

the fact is you dont know if or by how much they over paid you just think you know. maybe they did maybe they didnt(they probably did but probably not by how much you claim). but again you dont know so there is little point debating it.

the only thing worth debating now is this

is nama the right thing to do in theory and should it in theory seriously help the economy recover. the answer is yes imo. i hate this goverment and im sure they will find a way to **** it up but the nama idea is a good one. if they actually do what they say they will do this time around then nama will be a success and you can doubt them all you want but you cant say yet either way

I cannot disagree with you on Nama as I dont have an alternative...But I would pay for an alternative to this Gov being part of the solution...At least in fairness to Lenihan he was not in cabinet during all this time not having been too popular with Berties Babes.....Currently he is the only shining light in the dark hole of the fianna fail abyss!!!

fontanalis

ballinatray wrote: »

I cannot disagree with you on Nama as I dont have an alternative...But I would pay for an alternative to this Gov being part of the solution...At least in fairness to Lenihan he was not in cabinet during all this time not having been too popular with Berties Babes.....Currently he is the only shining light in the dark hole of the fianna fail abyss!!!

He's great at reading reports! Wasn't he also happy with the state of the banks when the ice berg was around the corner?

Liam Byrne

ballinatray wrote: »

.Currently he is the only shining light in the dark hole of the fianna fail abyss!!!

Don't sing Lenihan's praises too much, because he's the one that guaranteed the Anglo cesspit.

woodseb

Liam Byrne wrote: »

I don't do bull**** or spin. I do facts.

That "held at 77 billion on the books" is fictional, and so there is no "discount". So why doesn't he come out and be honest ? At least I'd respect him on some level for that.

.

The fact that 77bln was held on the banks books is true, that they were worth that is false as any investor in the banks knew over the last while

the facts were that it was a discount to book - that's they way it was announced to the public and that phrasing is technically correct and also relevant to those invested in the banks who were also interested in the news. In the run up to the announcement everyone was waiting for what discount to the book value the government would apply......

going on about whether discount to book is a discount or not is just semantics, if the general public misunderstood this its their fault, there is no need for linehan to come out and explain it when he clearly said he is paying 54bln for 47bln worth of loans

maybe its a job for the media or the opposition etc or the voters to inform themselves properly

woodseb

ballinatray wrote: »

I am sure Bernard McNamara would love your estimated valuations particularly as his consortium paid 460 Million for the Glass Bottle site now valued by Lisneys at 60 million...If nama had been unfortunate to take it on board they would be paying 300 million or so ( 30% discounted... Wow!!!)...

it's a 30% average discount.....hopefully i won't have to explain this further

Liam Byrne

woodseb wrote: »

going on about whether discount to book is a discount or not is just semantics, if the general public misunderstood this its their fault

Incorrect. The Government have repeatedly used the claim that they are getting a discount in order to mislead the public.

We should be able to trust a Government - our employees - to state the facts that are in our interest; instead, we have a corrupted "Freedom of Information" Act which involves paying fortunes to get anything remotely close to the truth.

So if we have untrustworthy employees, we should fire them.

woodseb wrote: »

there is no need for linehan to come out and explain it when he clearly said he is paying 54bln for 47bln worth of loans

And when everyone asks why, he claims that it's "a discount". That's deliberately misleading.

It's a 30% overpayment.

If they told it like it is, people might accept it. If they keep spinning, then I for one won't.

woodseb wrote: »

maybe its a job for the media or the opposition etc or the voters to inform themselves properly

No, it's the job of the Government to tell the truth and be honest for a change, and not hire expensive spin-doctors (again, using our money) to make themselves sound good.

woodseb wrote: »

it's a 30% average discount.....hopefully i won't have to explain this further

It's not a discount.....hopefully I won't have to explain this further.

woodseb

Liam Byrne wrote: »

It's not a discount.....hopefully I won't have to explain this further.

all i've done is explain where the confusion lies - you clearly did not understand fully at the beginning and are trying to cover this up by making it look like a government conspiracy to mislead the public....i don't think i'll bother anymore.....

Liam Byrne

woodseb wrote: »

all i've done is explain where the confusion lies - you clearly did not understand fully at the beginning and are trying to cover this up by making it look like a government conspiracy to mislead the public....i don't think i'll bother anymore.....

Good, because I am not covering anything up; I have always said that it was never a discount (you can check back over the last few months if you want).

So you can lose the "you clearly" and "trying to cover up" - it's pretty ridiculous.

The only "confusion" / thing that I've learned from you was that I didn't realise that the 77 billion was completely fictional.

But it was always an overpayment. Never a discount. Even if the banks did - whether corruptly or mistakenly - believe that they were worth 77 billion, the Government were always paying too much; it is worth €42 billion - no more, so €54 billion is paying 30% too much - not a discount.

I wouldn't go so far as to say "conspiracy", and I doubt anyone with a brain would be misled, but it was, at the very least it, an attempt to mislead the public into accepting it by making it sound less objectionable.

If you went into a liquidation sale and they told you that the sale price was €100, but that they'd give you a 25% "discount" on the actual price in the ledger ("book value") of €200, thereby charging you €150, would you deal with them/trust them ?

In the real world, would you call it a "discount" ? And would you write to the Consumer's Association when you saw them on TV claiming that they were offering a discount ?

woodseb

54bln for 47bln worth of loans is a 15% overpayment by the way

Liam Byrne

woodseb wrote: »

54bln for 47bln worth of loans is a 15% overpayment by the way

If you bothered read my posts, you'd see that I was quoting a current market value of €42 billion, halfway between the figures that have been touted of between €37 billion and €47 billion, which I think is a perfectly reasonable stance, e.g.

Taken together, with a 60 per cent fall from peak for the land and development projects and a 47 per cent fall for the others, this leaves the current market value of the Nama basket at €39.2 billion, not €47 billion (as estimated by Lenihan).

Source : http://archives.tcm.ie/businesspost/2009/09/20/story44468.asp

woodseb

you only mentioned a 'generally accepted price of 42bln', i had no idea where you got to there - it would be helpful to quote the source because you stated it as fact ( http://www.boards.ie/vbulletin/showpost.php?p=64288024&postcount=27 ) that Nama would need a 30% rise to break even.

but fair enough as i said before...

We can debate all day though where the true market value of these loans are now - they will all be a matter of opinion and not fact until they are actual realised

Liam Byrne

woodseb wrote: »

you only mentioned a 'generally accepted price of 42bln', i had no idea where you got to there - it would be helpful to quote the source because you stated it as fact ( http://www.boards.ie/vbulletin/showpost.php?p=64288024&postcount=27 ) that Nama would need a 30% rise to break even.

but fair enough as i said before...

OK, so I took an accepted mean/average. I definitely mentioned this before, but to be fair it may have been in a different thread. So apologies on that.

I'd like to think that I'm definitely being more honest than FF, though. I mean, if I really wanted to crib about it I would be quoting the 37-39 billion figures, which I'm not.

I do think taking the average was a totally acceptable stance; possibly more than acceptable, because of the state that the market is currently in, and the fact that no loans are being given for anyone to buy anything, and the fact that the Government wants to keep prices artifically high so that NAMA works, long-term.........I think their phrase was to "avoid fire-sale prices"....... which would presumably be LOWER than 37 billion, based on the news this week about all the vacant houses.

Foolish Penny

Not that this discourse isn't worthwhile, but is it not more important to focus on how to (a) stop NAMA and (b) force an election or referendum?

ei.sdraob

Foolish Penny wrote: »

Not that this discourse isn't worthwhile, but is it not more important to focus on how to (a) stop NAMA and (b) force an election or referendum?

the greens had a chance

but chose to care more about furry animals than people in this country

Foolish Penny

Other than blogging, we must be able to do something eh?

Pull cash out of cowboy banks.
Protest on the streets.
Petition local government representatives.
Erm... throw poo around Kildare street.

Anybody got any viable plans?

ei.sdraob

Foolish Penny wrote: »

Anybody got any viable plans?

moan on boards.ie

BeeDI

http://www.bloomberg.com/apps/news?pid=20601109&sid=aO05mqOhuX_Q&pos=15

Feb. 16 (Bloomberg) -- It was the collapse of Ireland’s real estate market that crippled the country’s banks. It may be the British property market that helps save them.
The Irish government plans to start buying 80 billion euros ($109 billion) of real estate loans from banks this month as part of a bailout. About 21 percent of the loans, including one for developing London landmark Battersea Power Station, are across the Irish Sea, according to the National Asset Management Agency, the group in Dublin set up to oversee the debt.
“Almost accidentally, the U.K. is helping Ireland,” said Eoin Fahy, an economist at KBC Asset Management, which oversees about 8 billion euros in Dublin. “Significant profits on U.K. assets could offset heavy Irish losses.”
As Ireland takes its biggest financial gamble since winning independence from Britain almost nine decades ago, a rebound in the U.K. real estate market has become the unlikely source of a boost to the value of loans included in the rescue package.
Prices for commercial properties rose a record 8.1 percent in the U.K. in the fourth quarter from the previous three months, according to Investment Property Databank Ltd, a research company based in London. Irish prices fell 4.9 percent over the same period, it said.
About 23 percent of office space in Dublin is vacant, compared with 7 percent in central London, according to CB Richard Ellis Group Inc., the world’s largest property broker.
“It increases the chances that the agency ends up certainly not making a loss but actually making a profit,” said Mike Turner, head of strategy at Aberdeen Asset Management Plc in Edinburgh. “It spells good news for the Irish Treasury.”
London Allure
Central London, the world’s most expensive office rental market, is the best place in Europe for new property investments, according to a PricewaterhouseCoopers LLP survey dated Feb. 1. For the second straight year, Dublin offered the worst prospects, the accounting firm said.
The asset agency, known as NAMA, may have to move quickly. The market’s recovery is “unsustainable,” with banks vulnerable to property companies defaulting on loans and the Bank of England halting its 200 billion-pound ($313 billion) of bond purchases, according to Ernst & Young LLP’s Item Club, an economic forecasting group.
“My sense is that, with fiscal tightening coming after the election, the recovery has run its course,” said Peter Sceats, director of real estate at broker Tradition Financial Services in London. “We could see a dip in prices in 2010.”
Bank Losses
In the meantime, Bank of Ireland Plc will incur a smaller loss on loans transferred to the asset agency than rival Allied Irish Banks Plc, NCB Stockbrokers in Dublin said.
The buoyancy in the U.K. means Bank of Ireland will make a 27 percent loss on loans it’s selling to the asset agency compared with a 35 percent discount for Allied Irish, according to Davy, another Dublin-based securities firm.
“For Bank of Ireland, the U.K. uplift has a massive benefit,” said Stephen Lyons, an analyst at Davy. Spokesmen at both banks declined to comment.
Bank of Ireland shares have more than tripled over the past year, while Allied Irish has doubled in the same period. Over three years, the ISEF Index of Irish financial companies has slumped 95 percent on concern about property loans.
Between 2004 and 2006, Irish investors spent 15 billion euros on real estate in the U.K., CB Richard Ellis said.
“The similarities between the two countries with regards to legal framework, lease structures and taxation make it a very attractive location for the Irish,” said Patrick Koucheravy, an economist at CB Richard Ellis in Dublin.
Half of Economy
Ireland’s biggest banks financed many of the deals and, as such, some of the loans are ending up at NAMA. It will buy the loans at a discount of about 30 percent, taking both good and bad debt. Should any of the borrowers default, the agency can seize the buildings on which they are secured.
Altogether, the debt amounts to about half of Ireland’s gross domestic product. In addition to the portion in Britain, loans tied to property in Northern Ireland account for about 6 percent of the total, NAMA said.
“In Ireland, NAMA will be a price maker,” said John Corrigan, head of the National Treasury Management Agency, which controls NAMA. “In the overseas market, it will be a price taker. The uplift in the U.K. property market is very welcome.”
Allied Irish is transferring 24 billion euros worth of loans to NAMA. Of that, 3.3 billion euros is tied to the U.K., the bank said in a letter to shareholders dated Nov. 30. In Bank of Ireland’s case, U.K. loans account for 7 billion euros of 16 billion euros heading to NAMA, the company said the same day.
That includes a Bank of Ireland loan to Real Estate Opportunities Plc, the latest company planning to transform Battersea Power Station, Europe’s largest brick building, into new homes and offices. REO, which is looking for a partner for the project, said in November the loan continues to perform.
“Bank of Ireland isn’t really getting the credit from investors for the fact that 43 percent of its property-backed assets are in the U.K.,” said Ciaran Callaghan, an NCB analyst.
To contact the reporter on this story: Dara Doyle at ddoyle1@bloomberg.net
Last Updated: February 15, 2010 19:01 EST

leonardjos

Foolish Penny wrote: »

Other than blogging, we must be able to do something eh?

Pull cash out of cowboy banks.
Protest on the streets.
Petition local government representatives.
Erm... throw poo around Kildare street.

Anybody got any viable plans?

I felt strongly about this at the time. I and others made a big effort at the time to publicise this protest but didn't get the critical numbers out on the street despite 10,000 people joining the Facebook Group.

My conclusion - if it doesn't affect people directly, they dont care.

Idbatterim

Who came up with the 30% discount? this was a far too small a reduction, without knowing much about the situation, i know that quite alot of the developments and land are not worth 25% of what they were purchased for! Irish Glass Bottle Site springs to mind, 50% discount would have been generous! The situation is a disgrace, but so are the shower that are in Goverment, hopefully we consign them to the opposition come election time. I feel that will be the extent of the recriminations in relation to the publics fury at NAMA!

SkepticOne

BeeDI wrote: »

“In Ireland, NAMA will be a price maker,” said John Corrigan, head of the National Treasury Management Agency, which controls NAMA. “In the overseas market, it will be a price taker. The uplift in the U.K. property market is very welcome.”

This is the main problem with NAMA. It will get involved in propping up property prices in ireland and this will quickly become politicised. It will drag out the adjustments that need to be made and cost a fortune doing so.

AMIIAM

Brussel sprout, Somebody has to make the first step. It is your idea.

dunsandin

The people have a short memory. A version of LALA was implemented in Japan in the late 1980's, to solve their banks state of insolvency, following the bursting of a property bubble. The result has since been described as the greatest transfer of wealth from the public purse to the private pocket. Or, in other words, a bank robbery, except the banks needed no mask or gun, just the threat that if they failed, the whole economy would sink with them. [EMAIL="Bull@#it"]Bull@#it[/EMAIL]. All of the rules of capitalism have been torn up, or conveniently ignored to the benefit of the banks. But not to worry, the boys in the golden circle will be ok, and all of us sheep will do as we always do, and shake our heads and accept nama as inevitable, sure what can we do? They know whats best- just like the priests did, and the gynaecologists, and the nuns, the politicians, the planners, the bankers, the HSE...................baaaah, baaaaah.

Amhran Nua

Foolish Penny wrote: »

Anybody got any viable plans?

Join the party, see sig. Lead, follow, or get out of the way.

Kevin Bacon

dunsandin wrote: »

The people have a short memory. A version of LALA was implemented in Japan in the late 1980's, to solve their banks state of insolvency, following the bursting of a property bubble. The result has since been described as the greatest transfer of wealth from the public purse to the private pocket. Or, in other words, a bank robbery, except the banks needed no mask or gun, just the threat that if they failed, the whole economy would sink with them. [EMAIL="Bull@#it"]Bull@#it[/EMAIL]. All of the rules of capitalism have been torn up, or conveniently ignored to the benefit of the banks. But not to worry, the boys in the golden circle will be ok, and all of us sheep will do as we always do, and shake our heads and accept nama as inevitable, sure what can we do? They know whats best- just like the priests did, and the gynaecologists, and the nuns, the politicians, the planners, the bankers, the HSE...................baaaah, baaaaah.

Decent enough point, but you still can't say from the evidence on Japan whether if they allowed the banks to collapse would they have been better off. The only precedent in that regard is Iceland and I would much rather be in our situation they what they are stuck with.

I know it's a party line but the cost to the economy if BOI and AIB collapsing would be far worse then what the cost of NAMA may cause.

Yeah I would fully agree on the over payment by NAMA but it is yet to be seen the effectiveness of the plan at least give an it opportunity for some of it's affects on the credit situation in this country. Chicken eggs before they hatch and all that jazz.

Finally might being a bit ignorant on this point, but isn't the key to a capitalist society a banking system that willingly frees up capital to further enterprise. And is really the machine of wealth creation in a capitalist structure, multiplier effect and such, so an economy would collapse along with them.

dunsandin

Has anybody got a viable alternative!!!!!!!!!!!!!!!


Ha Ha HA Ha Ha. Only a lunatic would even pose this question. What exactly is viable about the ORIGINAL, never mind the ALTERNATIVE. If your friend owed a moneylender 540K, and you personally were stony broke, and you decided to BORROW 500k (because someone was foolish enough (or had an ulterior motive) to lend you the money-despite your pauper status. Then, you give your corrupt,dopey wastrel friend the 500k you borrowed, which he either pees up a wall, or runs off with.
"But he said he'd pay it back" you protest.

Well, he probably won't change, but you will, you're gonna have to pay it back, so he can continue as he was.
The alternative? Try applying the rules of capitalism - if you spend all your money, and run out, you go bust. Tough. And after the banks had gone bust, new banks would rise organically from the ashes, people would still want to store and borrow money. The 54 billion could have paid back the depositors - up to a limit of E100,000. The shareholders and bond holders could go whistle-like with any other company that fails. And if the developers owed money - go after it, sieze assets, homes, cars etc. But that would hurt too many pals, so would never happen. Instead, God help the Irish Taxpayer, because a hard time is coming.

Amhran Nua

Kevin Bacon wrote: »

Finally might being a bit ignorant on this point, but isn't the key to a capitalist society a banking system that willingly frees up capital to further enterprise. And is really the machine of wealth creation in a capitalist structure, multiplier effect and such, so an economy would collapse along with them.

The IMF has said that NAMA won't get lending moving again. Varied and assorted economists have said NAMA won't get lending moving again, including a nobel prize winning one, who went so far as to describe it as criminal - in other words the people responsible for it should be locked away for the good of society. The people who used the idea in Sweden have said that the half witted implementation in Ireland won't work, won't get lending moving again. The BANKS themselves say that NAMA won't get lending moving again.

What more do you need?

dunsandin

Just in case anybody missed it, today the BOI handed over such a tranche of shares that it is now effectively nationalised anyway - so, the process of namalala was a waste of time- we handed over a pile of dough to avoid nationalisation, because that was a "bad" outcome, and ended up with nationalisation anyway. Just to have nationalised to begin with, and applied ruthless rules of capitalism to those involved would have been cheaper, faster, and the taxpayer and shareholders would be no less [EMAIL="scre@ed"]scre@ed[/EMAIL]. Sadly, by nationalising the banks, they will be under the control of the even bigger twits, schoolteachers, barristers and other unqualified, non-business people whom we entrust to run our economy. Its like nominating the janitor to run your company, just because he is popular. As they squabble about Willie odeargodtheytapedit, the economy continues to flounder like a rudderless ship, unemployment continues to rise, and we keep on borrowing billions to pay our civil service, so that they can spend money to keep the economy afloat! Thats like bailing the water INTO a sinking ship. I DON'T THINK WE ARE TAKING IT LYING DOWN ANYWAY, that implies that we got flowers and chocolates, and will perhaps enjoy the event. I think we are taking it with our head pressed up against the bars, while bubba and del boy hold our arms, as the guard looks on, ignoring our screams.

newtown4

Brussels Sprout wrote: »

It's painfully obvious to anyone who takes the time to sift through the detail that the debt incurred through the sheer greed of a small group of people is being transferred onto the shoulders of the entire population of taxpayers. Why are we accepting this? If this was in one of many other countries there would be mass strikes, protests and probably riots. Is it our curse are Irish people that we love to complain about things but when it comes to action we're afraid to take that step(we won't even complain in restaurants!).

The public service have had a few marches and strike days but that was over their wages being cut. NAMA is far more disastrous then that yet nobody would consider taking to the streets to protest it apart from the usual fringe left wing groups (who most people ridicule).

It's no wonder the politicians, bankers, developers and top civil servants were able to ride roughshod over us because they knew that we'd take it lying down like the grumbling doormats that we are.

Paddy loves pain the more he gets the more he loves it this week alone Paddy has proven to be the most pathetic stupid human being walking this planet

Rongil

I keep getting this question at the back of my mind. Were we totally conned? We seem to have accepted that if the banks weren't saved, we would be in economic armageddon. Me thinks - RUBBISH. If a bank went to the wall, then the liquidators would have to try and get back as much money as possible to pay off the creditors as in any liquidation. The shareholders, of course would lose everything (poor souls).
The problem is that many hundreds of thousands of mortgage holders could not simply have their houses repossessed to pay off the debt. There would be a serious morale dilemma. In effect home owner/occupiers would be able to buy their homes for next to nothing. I think this is the meltdown that would have occurred, which the governments would not own up to, as all their buddies would be out of pocket. New banks would emerge. We were conned.

SkepticOne

Rongil wrote: »

I keep getting this question at the back of my mind. Were we totally conned? We seem to have accepted that if the banks weren't saved, we would be in economic armageddon. Me thinks - RUBBISH. If a bank went to the wall, then the liquidators would have to try and get back as much money as possible to pay off the creditors as in any liquidation. The shareholders, of course would lose everything (poor souls).

What they would try to do is sell the mortgages to other institutions. You would still owe the full amount of the outstanding loan to this other institution.

Liam Byrne

SkepticOne wrote: »

What they would try to do is sell the mortgages to other institutions. You would still owe the full amount of the outstanding loan to this other institution.

Yup, but the fact is that so would the developers, had FF allowed this scenario to happy naturally, as per capitalist practices.

And you can be damn sure none of those other institutions would pay 30% over the odds and view that as a "30% discount".....especially with the news today that the "value" of one plot of land fell by something like 90% !!!!

The fact that developers can farm it off somewhere else and/or declare bankruptcy is the big difference.

The most sickening aspect is that some people actually believe that someone being unethical and corrupt, failing dismally, declaring bankruptcy, hitting us with their bill, and then starting all over again while we pick up the tab is an example of "captains of industry".

And FF support this all the way, with us left to pick up the tab - and not even getting paid cash because of EU rules - rules which even FF admit [now] they knew might apply, but just omitted to tell us at the time in case we'd freak and kick them out like they deserve.

Actually, kicking them out would be too good for them. We should build that prison and throw the lot in there.

The more I read about FF the more sickened I am; and that's saying something, because I've been convinced that they're corrupt as f**k for the last 10 years or so.

SkepticOne

Liam Byrne wrote: »

Yup, but the fact is that so would the developers, had FF allowed this scenario to happy naturally, as per capitalist practices.

And you can be damn sure none of those other institutions would pay 30% over the odds and view that as a "30% discount".....especially with the news today that the "value" of one plot of land fell by something like 90% !!!!

The fact that developers can farm it off somewhere else and/or declare bankruptcy is the big difference.

Yes if the banks were to go bust they would have to sell all the assets (private mortgages, developer loans etc). They would get something for the mortgages but the market would see the developer loans for what they were: crap. So when it came to compensating depositers there would be little to go round and they would be wiped out.

Nama gets around the problem of the developer loans being worth next to nothing by forcing the public to purchase them. Therein lies the theft.

MaceFace

It amazes me the lack of knowledge and total rubbish that is spouted here about something so basic.

If we did not put the guarantee in place for the banks, there was a very high probability that they would have gone bust.
If we did not introduce NAMA, there is a high probability they would have gone bust.

Bust banking sector - bust country. End result is you are looking at massive unemployment (US reckons 25% for their own situation), which in turn leads to the government defaulting.
EU steps in (or IMF if EU to afraid or weak), imposes harsh conditions in Ireland which lead us to a genertion of poverty.
So, letting the banks go bust was not an option.

Now before anyone says, yeah we know that, but NAMA was not the only game in town, what alternatives were there?
Someone asked that earlier and the response was a rant about how bad NAMA is.
I agree NAMA is bad, but what better solutions are there?

I have always being a supporter of NAMA, and I think Lenny is doing a fantastic job, but I have always been against the idea of long term economic value.
It seems like we are edging closer to the only alternative, which is nationalisation, and imo, that is not what we want to see.

ei.sdraob

MaceFace wrote: »

It amazes me the lack of knowledge and total rubbish that is spouted here about something so basic.

If we did not put the guarantee in place for the banks, there was a very high probability that they would have gone bust.
If we did not introduce NAMA, there is a high probability they would have gone bust.

Bust banking sector - bust country. End result is you are looking at massive unemployment (US reckons 25% for their own situation), which in turn leads to the government defaulting.
EU steps in (or IMF if EU to afraid or weak), imposes harsh conditions in Ireland which lead us to a genertion of poverty.
So, letting the banks go bust was not an option.

:rolleyes: have you really fallen for that FF spin

firstly there was no need to guarantee ALL deposits AND bonds AND everything else up to the sum of few hundred billion, only depositors and current accounts should have been covered and none of that bond and shares crap

if the banks really were to go bust and risked destabilizing the euro then the ECB and EU would have stepped in

we are seeing that happening now in Greece

and if they (EU/IMF/whatever) impose harsh conditions on our borrowing then all well and good, thats exactly what this country needs, as shown in my earlier thread to bring expenditure back a better part of decade

MaceFace

ei.sdraob wrote: »

:rolleyes: have you really fallen for that FF spin

firstly there was no need to guarantee ALL deposits AND bonds AND everything else up to the sum of few hundred billion, only depositors and current accounts should have been covered and none of that bond and shares crap

if the banks really were to go bust and risked destabilizing the euro then the ECB and EU would have stepped in

we are seeing that happening now in Greece

and if they (EU/IMF/whatever) impose harsh conditions on our borrowing then all well and good, thats exactly what this country needs, as shown in my earlier thread to bring expenditure back a better part of decade

Remember back when this guarantee came in. The government were told one night that if they didn't introduce the guarantee before the market opened in the morning, then there would be a run on the main banks, and thus they would have ended up like Northern Rock.

Think about this - if repayments to bond holders did not occur, the costs of future bond issues would be so high that it may have resulted in the collapse of the bank.


As for NAMA - if the haircut was announced as 60%, would people be more in favour? The idea is fine - many other countries have something similar, but for some reason, it takes us 18 months to get the thing up and running.
And, as for the long term economic value - that is the only real problem I see. Value it differently, and we all love it.

Now on to what is happening today with the EU and Greece. I have always believed that the IMF would never be invited into a EU country. I am actually beginning to change my mind a bit because there is no plan for Greece. All that has been said is that the EU will sort out the mess if they need to, but there are no plans on to how that is actually done.

Finally, the IMF should never be welcomed into a country. The only positive is that they get the economy back in order, but they don't care the implications on society. Have a read of this. They run the country like a bank and their only concern is to get back the money they lend.
They won't think twice about cutting the public sector in half which means twice as big waiting lists and spiralling crime.
Look at this for some commentary on the impact it had on Thailand.

ei.sdraob

MaceFace wrote: »

Remember back when this guarantee came in. The government were told one night that if they didn't introduce the guarantee before the market opened in the morning, then there would be a run on the main banks, and thus they would have ended up like Northern Rock.

Think about this - if repayments to bond holders did not occur, the costs of future bond issues would be so high that it may have resulted in the collapse of the bank.

the likes of Ango Irish should have collapsed, they didnt have many "normal" customer back then

MaceFace wrote: »

As for NAMA - if the haircut was announced as 60%, would people be more in favour?

60% of **** all is still **** all, thats the major problem all of NAMA portfolio is toxic as hell, 30% is not even in the country (nice places like Dubai and east europe which had bigger falls than us), and another chunk is not even land/property but all sort of exotic documents like credit default swaps that are worth absolutely nothing

MaceFace wrote: »

The idea is fine - many other countries have something similar, but for some reason,

like whom? the govt was criticized by economists (including a nobel prize winner) since NAMA is nothing like the structure that was setup in Nordic countries before

MaceFace wrote: »

it takes us 18 months to get the thing up and running.

what you expect, the govt are so incompetent they are incapable of wiping their arse never mind implementing something as complicated as NAMA
it will end up to be a terrible joke with tribunals upon tribunals to find out what went wrong

MaceFace wrote: »

And, as for the long term economic value - that is the only real problem I see. Value it differently, and we all love it.

there is no such thing as long term economic value :mad: the current value takes account of any future prospects, we were sold a rat on a stick and i cant believe that people actually believe that this NAMA scam is a "good idea"

MaceFace wrote: »

Now on to what is happening today with the EU and Greece. I have always believed that the IMF would never be invited into a EU country. I am actually beginning to change my mind a bit because there is no plan for Greece. All that has been said is that the EU will sort out the mess if they need to, but there are no plans on to how that is actually done.

just like the "bank guarantee" the EU talking about bailouts its nothing more than a confidence trick

MaceFace wrote: »

Finally, the IMF should never be welcomed into a country. The only positive is that they get the economy back in order, but they don't care the implications on society. Have a read of this. They run the country like a bank and their only concern is to get back the money they lend.
They won't think twice about cutting the public sector in half which means twice as big waiting lists and spiralling crime.
Look at this for some commentary on the impact it had on Thailand.

a country as ****ed up as ours could do with just about anyone but FF running it now, If it takes the IMF to crush the unions then so be it, let them come in before the unions crush us

MaceFace

ei.sdraob wrote: »

the likes of Ango Irish should have collapsed, they didnt have many "normal" customer back then

I agree, there have been massive mistakes made, and whoever decided Anglo was of systemic importance to Ireland got it all wrong.

ei.sdraob wrote: »

60% of **** all is still **** all, thats the major problem all of NAMA portfolio is toxic as hell, 30% is not even in the country (nice places like Dubai and east europe which had bigger falls than us), and another chunk is not even land/property but all sort of exotic documents like credit default swaps that are worth absolutely nothing

NAMA is not just going to hold **** loans. It is taking many performing loans. That is a very important fact.

Also, 30% of loans may be for property outside of Ireland, but that does not mean they are all for Bulgaria or Dubai. There is a huge amount in the UK which should not be as badly hit as the loans in Ireland.

ei.sdraob wrote: »

like whom? the govt was criticized by economists (including a nobel prize winner) since NAMA is nothing like the structure that was setup in Nordic countries before

And NAMA has been praised by many people. It doesn't have to be an exact copy of what Sweden done to be worthy.
Only time will tell how well it does and as I have said, the premise is fine, the problem is the leg dragging and possible overvaluations (possible, as we can't measure results yet)

ei.sdraob wrote: »

what you expect, the govt are so incompetent they are incapable of wiping their arse never mind implementing something as complicated as NAMA
it will end up to be a terrible joke with tribunals upon tribunals to find out what went wrong

ei.sdraob wrote: »

there is no such thing as long term economic value :mad: the current value takes account of any future prospects, we were sold a rat on a stick and i cant believe that people actually believe that this NAMA scam is a "good idea"

By this statement, then surely the property market in 2006 was not over priced, as the price took into account any future prospects?

It is very easy to work out long term economic value - take a property, compare it to historic data as well as foreign equivalents. Decide on a sensible yield, and hey presto - your not far off.

ei.sdraob wrote: »

just like the "bank guarantee" the EU talking about bailouts its nothing more than a confidence trick

I agree - the bank guarantee was a measure to ensure confidence in Ireland. Without it, we were down the pan.

ei.sdraob wrote: »

a country as ****ed up as ours could do with just about anyone but FF running it now, If it takes the IMF to crush the unions then so be it, let them come in before the unions crush us

Why would the IMF crush the unions? The entities will still exist demanding increased pay and conditions for their members.

And as for someone else running the country beyond FF. Who exactly would that be?
FG = FF light. The only words that come from them is those that play to the public sympathies. Nationalisation, no to NAMA, no pay cuts. Look at that clown, George Lee - what exactly has he recommended, even since he left FG? If these guys get in, they will be too busy patting themselves on the back. They don't have a single person that I would like to see running the country.

Labour - raise taxes for the well off, driving the business owners, job creators out of the country. No cuts to the lower paid. Result - No change in competitiveness which results in our continued struggle for inward investment.

BTW: I am not a FF supporter. I put the blame for the mess 50% with them (the other 50% is the fault of everyone else). I am just sick of people who are either ill-informed or populist know it alls coming out saying things just for the sake of saying it.