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Should we save Anglo?

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  • 21-01-2009 11:11am
    #1
    Bren1609
    Closed Accounts Posts: 459 ✭✭


    Can we get a poll on this?

    Can anyone give me one good reason as to why we should save Anglo. They dont have one personal customer branch and all their loans were provided primarily to property developers. So why exactly are we bailing them out?


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    #2
    OhNoYouDidn't
    Closed Accounts Posts: 6,934 ✭✭✭OhNoYouDidn't


    Bren1609 wrote: »
    Can we get a poll on this?

    Can anyone give me one good reason as to why we should save Anglo. They dont have one personal customer branch and all their loans were provided primarily to property developers. So why exactly are we bailing them out?

    Because property developers own Fianna Fail and are calling in a favour. Not much point having politicians in your pocket if you aren't going to get them to do favours for you when things are bad.


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    #3
    Pub07
    Closed Accounts Posts: 532 ✭✭✭Pub07


    Well I hate FF as much as the rest of you but I keep hearing this line from Lenehan, etc.. that if they let Anglo go bust it would completely destroy all confidence left in the Irish banking system and would lead to an even worse situation than nationalising it. I think on prime time last night he said that some other countries such as iceland, i think, let bank(s) go bust and it was total disaster. So whats the deal on the reasoning the government is giving for nationalising Anglo, is it valid or what?


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    #4
    nuttz
    Closed Accounts Posts: 453 ✭✭nuttz


    OhNoYouDidn't wrote: »
    Because property developers own Fianna Fail and are calling in a favour. Not much point having politicians in your pocket if you aren't going to get them to do favours for you when things are bad.

    Basis?

    Saving Anglo was not an option, it was a necessity. No poll needed.

    Have a read of this:

    http://www.irishtimes.com/newspaper/ireland/2009/0121/1232474671026.html


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    #5
    El Stuntman
    Closed Accounts Posts: 4,720 ✭✭✭El Stuntman


    Bren1609 wrote: »
    Can we get a poll on this?

    Can anyone give me one good reason as to why we should save Anglo. They dont have one personal customer branch and all their loans were provided primarily to property developers. So why exactly are we bailing them out?

    leaving aside the fact that it's too late....:rolleyes:

    my answer is 'no, they are of no systemic importance to the Irish banking system and wider economy. We should let them go the wall and let the shareholders, bondholders and employees take the hit. We should also send the CAB in to investigate the bank's books fully. We shoud also let INBS fail.

    We should concentrate all of our available resources on saving AIB and BoI, nationalisation appears inevitable. They should then be merged, stripped to the bone as regards costs, infrastructure and staff.

    The head of the Central Bank should be fired immediately without benefits.'


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    #6
    El Stuntman
    Closed Accounts Posts: 4,720 ✭✭✭El Stuntman


    Pub07 wrote: »
    Well I hate FF as much as the rest of you but I keep hearing this line from Lenehan, etc.. that if they let Anglo go bust it would completely destroy all confidence left in the Irish banking system

    seen AIB and BoI's share price lately?

    it's already happened; the Irish banking system effectively no longer exists


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    #7
    LoveDucati2
    Closed Accounts Posts: 379 ✭✭LoveDucati2


    Anglo has about 30-40 billion Euro in toxic debt, the overvaluation of its assets of 80 billion is where the problem is. The clueless b4stardos in government have just consigned us to the scrap heap. The country will now be liable for this.

    Unemployment will hit 20% + this year, and the budget deficit will go from (wait .. the Gov do not even know what it is) €19 billion to upwards of 30 billion unless DRASTIC measures are taken now.

    No more talking, meetings or the inability to take any kind of action. This shower are completely incapable, if you think this year is gonna be bad, wait for the next couple. Mass mortgage defaults, credit card debt, no employment, I will be starting a seperate thread on this.


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    #8
    El Stuntman
    Closed Accounts Posts: 4,720 ✭✭✭El Stuntman


    nuttz wrote: »
    Basis?

    Saving Anglo was not an option, it was a necessity. No poll needed.

    Have a read of this:

    http://www.irishtimes.com/newspaper/ireland/2009/0121/1232474671026.html

    my prediction is that thise words will come back to bite him in the ass

    he also said that Anglo was sound ;)


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    #9
    Rob_l
    Registered Users Posts: 2,905 ✭✭✭Rob_l


    nuttz wrote: »
    Basis?

    Saving Anglo was not an option, it was a necessity. No poll needed.

    Have a read of this:

    http://www.irishtimes.com/newspaper/ireland/2009/0121/1232474671026.html

    Im sorry you want to believe this because lenihan says so? :eek:


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    #10
    20goto10
    Registered Users Posts: 1,210 ✭✭✭20goto10


    Surely nationalising them is the cheapest option. What were they worth when shares were suspended, €170mill? I'd expect the government to offer maybe €120mill to take them over. How much would letting them go bust cost the taxpayer? €5bn? And if you include the knock on effect it could be a hell of a lot more.


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    #11
    El Stuntman
    Closed Accounts Posts: 4,720 ✭✭✭El Stuntman


    20goto10 wrote: »
    Surely nationalising them is the cheapest option. What were they worth when shares were suspended, €170mill? I'd expect the government to offer maybe €120mill to take them over. How much would letting them go bust cost the taxpayer? €5bn? And if you include the knock on effect it could be a hell of a lot more.

    if they were not covered by the Guarantee, letting them go bust would cost the taxpayer zero

    nobody knows what the true extent of their liabilities versus their assets (marked to market on a realistic basis) is. We just know that it's big, very big and could be up to 30 billion euros.

    nationalisation was an act of national treachery, just as was extending the guarantee to Anglo and INBS


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    #12
    Pub07
    Closed Accounts Posts: 532 ✭✭✭Pub07


    So do people think letting Anglo go bust would have no effect on the irish banking system as a whole and Lenehan is talking complete sh|te?


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    #13
    Villain
    Registered Users Posts: 15,944 ✭✭✭✭Villain


    The problem is the banking Gurantee the Government gave, if we were to let Anglo go bust that Gurantee would be called in and the Tax Payer would have to make up the difference between deposits and assets - bad debts.

    It would also cause an even more serious crash in the banking sector yes I know BOI and AIB are below 50 cent but a lot of the money in Anglo was from outside the state and if Anglo was let go it would have serious longterm affects for international investors putting money into Ireland.

    If BOI and AIB can hold their own and make enough money to pay a perference dividend then the Government can invest capital without wiping out the ordinary shares and there is no need for Anglo to become a "Bad Bank".

    If however AIB and BOI are going to collapse then the State will need to make Anglo a bad bank bail out AIB and BOI by taking on the bad debts and then Anglo can try and work their way out the mess.

    The problem here is no-one knows how bad things are going to get, the Bank Gurantee would not have been given imo if the Government knew how bad things were in Anglo, everyone is guessing and the Government are no different.

    A state cannot function without a solid banking system we just need to find the best way to stabilise the banks, imo A merger bewteen BOI and AIB is worth looking at, the banks won't want it but if they merged and were able to sustain themselves imo that would be better than the State injecting Capital and putting the expense of guranteed dividend on pref shares


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    #14
    The Corinthian
    Closed Accounts Posts: 19,777 ✭✭✭✭The Corinthian


    El Stuntman wrote: »
    if they were not covered by the Guarantee, letting them go bust would cost the taxpayer zero
    If they have no money in accounts with them.


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    #15
    El Stuntman
    Closed Accounts Posts: 4,720 ✭✭✭El Stuntman


    The Corinthian wrote: »
    If they have no money in accounts with them.

    I use the term 'the taxpayer' interchangeably with 'The Exchequer' ;)

    caveat emptor imo when it comes to where you place your deposits


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    #16
    Talisman
    Registered Users Posts: 6,106 ✭✭✭Talisman


    Pub07 wrote: »
    So do people think letting Anglo go bust would have no effect on the irish banking system as a whole and Lenehan is talking complete sh|te?
    Following the decision to include Anglo Irish in the guarantee the option to allow the bank fold was not possible. After that the Irish tax payer became liable for the debts of Anglo Irish if the bank collapsed - considering there are only a few million of us that is a serious debt for us to be carrying on top of whatever personal debt each individual may have.


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    #17
    The Corinthian
    Closed Accounts Posts: 19,777 ✭✭✭✭The Corinthian


    El Stuntman wrote: »
    I use the term 'the taxpayer' interchangeably with 'The Exchequer' ;)

    caveat emptor imo when it comes to where you place your deposits
    Ahhh... but don't you think 'The Exchequer' might take a wee hit from the sudden collapse in wealth in the economy?


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    #18
    El Stuntman
    Closed Accounts Posts: 4,720 ✭✭✭El Stuntman


    Villain wrote: »
    It would also cause an even more serious crash in the banking sector yes I know BOI and AIB are below 50 cent but a lot of the money in Anglo was from outside the state and if Anglo was let go it would have serious longterm affects for international investors putting money into Ireland.

    I work in the investment industry; believe me, no-one is putting money into Ireland right now. We're a banana republic in their eyes.

    That's why Lenihan's talk about systemic risks and investor confidence etc is so laughable. We're already at the bottom.
    Villain wrote: »
    If BOI and AIB can hold their own and make enough money to pay a perference dividend then the Government can invest capital without wiping out the ordinary shares and there is no need for Anglo to become a "Bad Bank".

    they're dead in the water and nationalisation is the only option.

    lol, the ordinary shares are already wiped out!

    Villain wrote: »
    If however AIB and BOI are going to collapse then the State will need to make Anglo a bad bank bail out AIB and BOI by taking on the bad debts and then Anglo can try and work their way out the mess.

    inevitable imo
    Villain wrote: »
    The problem here is no-one knows how bad things are going to get, the Bank Gurantee would not have been given imo if the Government knew how bad things were in Anglo, everyone is guessing and the Government are no different.

    rubbish - what about the PWC report? what about IFSRA returns? central bank numbers?

    are they all fantasy? (yes is the answer but the Govt cannot plead ignorance, stupidity maybe)
    Villain wrote: »
    A state cannot function without a solid banking system we just need to find the best way to stabilise the banks, imo A merger bewteen BOI and AIB is worth looking at, the banks won't want it but if they merged and were able to sustain themselves imo that would be better than the State injecting Capital and putting the expense of guranteed dividend on pref shares

    we don't have a banking sector now, the patient is dead and we're just waiting for the funeral


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    #19
    El Stuntman
    Closed Accounts Posts: 4,720 ✭✭✭El Stuntman


    The Corinthian wrote: »
    Ahhh... but don't you think 'The Exchequer' might take a wee hit from the sudden collapse in wealth in the economy?

    check out the tax returns prior to Anglo's nationalisation; 'The Exchequer' is already fooked. Why socialise up to 30bn more in losses?


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    #20
    Villain
    Registered Users Posts: 15,944 ✭✭✭✭Villain


    El Stuntman wrote: »
    I work in the investment industry; believe me, no-one is putting money into Ireland right now. We're a banana republic in their eyes.

    That's why Lenihan's talk about systemic risks and investor confidence etc is so laughable. We're already at the bottom.

    Thats why I mentioned the word "longterm" in my post. I don't think we are near the bottom yet.

    El Stuntman wrote: »
    they're dead in the water and nationalisation is the only option.

    lol, the ordinary shares are already wiped out!

    We don't know that well I don't know, I don't know how the loan books are in either banks.

    The ordinary shares have been wiped out in value but they are still there and if the banks could survive without been nationalised or giving the Government ordinary shares, they may be worth something in the future.

    El Stuntman wrote: »
    rubbish - what about the PWC report? what about IFSRA returns? central bank numbers?

    are they all fantasy? (yes is the answer but the Govt cannot plead ignorance, stupidity maybe)

    They don't tell us the future.

    El Stuntman wrote: »
    we don't have a banking sector now, the patient is dead and we're just waiting for the funeral

    That's a good analogy but imo the patient is on a life support machine and the government need to decide to turn it off or give capital hoping that one day the patient will return.

    We still have 2 million people in employment thats a lot of Mortgages still been paid for the moment


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    #21
    El Stuntman
    Closed Accounts Posts: 4,720 ✭✭✭El Stuntman


    Villain wrote: »
    Thats why I mentioned the word "longterm" in my post. I don't think we are near the bottom yet.

    sorry should have been more precise; we're at the bottom when it comes to our reputation as a home for investment funds. Clearly we are nowhere near the bottom of economic misery yet.
    Villain wrote: »
    The ordinary shares have been wiped out in value but they are still there and if the banks could survive without been nationalised or giving the Government ordinary shares, they may be worth something in the future.

    the market and institutions have already decided on this; they won't touch the shares or subscribe to any rights issue. The Government is the last chance saloon.

    I wonder if Eugene Sheehy is still claiming that AIB would rather die than raise capital? I hear rumours they are desperately try to flog their American and Polish subs.
    Villain wrote: »
    We still have 2 million people in employment thats a lot of Mortgages still been paid for the moment

    it's commercial property loans that are the real problem, not residential. Most homeowners will find a way to repay their PPR mortgage (even if it ends up costing them 4 times as much as the market value of the house :rolleyes:)


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    #22
    Villain
    Registered Users Posts: 15,944 ✭✭✭✭Villain


    Commercial Property loans will cause the main issues, but I still think that as large Residental banks AIB and BOI will still have a large chunk of their loan book that is healthy, the problem as I said in my last post is I have no idea what those Loan books look like, I would have thought residental would make up a large chunk of it but I'm guessing?

    Eugene Sheehy may well have to come with his tail between his legs begging for capital or perhaps their loan book is strong enough to handle the bad debts.

    Do you think AIB and BOI will have to be nationalised?


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    #23
    El Stuntman
    Closed Accounts Posts: 4,720 ✭✭✭El Stuntman


    Villain wrote: »
    Commercial Property loans will cause the main issues, but I still think that as large Residental banks AIB and BOI will still have a large chunk of their loan book that is healthy, the problem as I said in my last post is I have no idea what those Loan books look like, I would have thought residental would make up a large chunk of it but I'm guessing?

    residential will be a horror story too as unemployment begins to really bite and negative equity gets bigger and bigger. Most people are only 3 paychecks from bankruptcy - facile but true.
    Villain wrote: »
    Eugene Sheehy may well have to come with his tail between his legs begging for capital or perhaps their loan book is strong enough to handle the bad debts.

    if it was strong enough do you think they'd be selling the family silver and begging the Govt for capital?
    Villain wrote: »
    Do you think AIB and BOI will have to be nationalised?

    :confused:
    El Stuntman wrote: »
    they're dead in the water and nationalisation is the only option.

    :cool:


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    #24
    OhNoYouDidn't
    Closed Accounts Posts: 6,934 ✭✭✭OhNoYouDidn't


    nuttz wrote: »
    Basis?

    Saving Anglo was not an option, it was a necessity. No poll needed.

    Have a read of this:

    http://www.irishtimes.com/newspaper/ireland/2009/0121/1232474671026.html

    Basis? Common sense and an understanding of how business in Ireland works

    read this

    http://www.irishtimes.com/newspaper/...059661333.html

    There is NO commercial, systemic or economic reason to save Anglo. They are a small private wealth bank whose loan book was ridiciliously overweight to one sector of the economy, who happen to be the most politically powerful lobby group of them all.


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    #25
    nuttz
    Closed Accounts Posts: 453 ✭✭nuttz


    OhNoYouDidn't wrote: »
    Basis? Common sense and an understanding of how business in Ireland works

    read this

    http://www.irishtimes.com/newspaper/...059661333.html

    There is NO commercial, systemic or economic reason to save Anglo. They are a small private wealth bank whose loan book was ridiciliously overweight to one sector of the economy, who happen to be the most politically powerful lobby group of them all.



    to suggest that the only reason Anglo was nationalised is because the property developers have FF in their pocket is a tad naive.

    your link is broken.


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    #26
    El Stuntman
    Closed Accounts Posts: 4,720 ✭✭✭El Stuntman


    nuttz wrote: »
    to suggest that the only reason Anglo was nationalised is because the property developers have FF in their pocket is a tad naive.

    seeing as you disagree, what do you see as the reasons?


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    #27
    OhNoYouDidn't
    Closed Accounts Posts: 6,934 ✭✭✭OhNoYouDidn't


    nuttz wrote: »
    to suggest that the only reason Anglo was nationalised is because the property developers have FF in their pocket is a tad naive.

    your link is broken.

    Apologies on the link - here it is http://www.irishtimes.com/newspaper/opinion/2009/0120/1232059661333.html

    With respect, you are the one taking the minister at face value, yet I am naive? Anglo were well known in banking circles for being, ahem, moody, and their risk rating even in the good times reflected that.

    Read the above article, I would be interested to see what you think.


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    #28
    jmayo
    Registered Users Posts: 13,168 ✭✭✭✭jmayo


    El Stuntman wrote: »
    seeing as you disagree, what do you see as the reasons?

    El Stuntman you do know you are talking to a Fianna failure apologist ?
    Take your pick of reasons for this whole mess, it is global downturn, it is American subprime, it is the weather, oh and it is people like you talking down the markets :rolleyes:

    PS did you see how that sniveling little sh** Neary hadn't the guts to show up for Dail committee meeting today.


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    #29
    Villain
    Registered Users Posts: 15,944 ✭✭✭✭Villain


    The Volume of AIB shares been traded today is pretty high and the share price has only dropped 5 cent which suggest to me a lot of shares are been bought, maybe I'm reading that wrong?


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    #30
    El Stuntman
    Closed Accounts Posts: 4,720 ✭✭✭El Stuntman


    Villain wrote: »
    The Volume of AIB shares been traded today is pretty high and the share price has only dropped 5 cent which suggest to me a lot of shares are been bought, maybe I'm reading that wrong?

    that's a 10% drop! :pac:


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    #31
    The Corinthian
    Closed Accounts Posts: 19,777 ✭✭✭✭The Corinthian


    El Stuntman wrote: »
    check out the tax returns prior to Anglo's nationalisation; 'The Exchequer' is already fooked. Why socialise up to 30bn more in losses?
    Are you suggesting that because the 'The Exchequer' is screwed, it's all right to add oil on the fire?

    My take on the present policy is that it is an unattractive one. However, it is also the least unattractive one presently available. To prop up the banks is bad, not to is worse.

    So far, outside of moralizing over the principle of the policy, I've noticed a distinct lack of discussion on the real economic implications it represents, or the opportunity costs of not applying it.


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