Anglo Irish, The first of the state banks.

Run_to_da_hills

The Government moved today to take over Anglo Irish Bank, saying its earlier plan to inject money into the troubled lender was not enough to secure its future.

Ireland's Department of Finance said the bank's funding position had been weakened and that unacceptable practices including a recent loan controversy had caused serious damage to its reputation. A recapitalization program planned earlier is no longer enough, the department said in a statement.

"Therefore, the government must move to the final and decisive step of public ownership," the statement said.

The specialist commercial lender is considered the ultimate boom-and-bust story of Ireland's Celtic Tiger years.

The bank had soared for more than a decade together with Ireland's unprecedented economic boom, fueled by foreign investment and local enthusiasm for construction and property.

But the lender ran into trouble as the economic downturn intensified. By the end of last year, Anglo's shares had lost nearly 98 percent of their value from a 2007 peak.

Will this be a start of the Nationalising of all other banks?, Will it now mean that the state will have an interest and knowledge of every penny you lodge and withdraw in future?

http://news.bbc.co.uk/1/hi/business/7832203.stm

nesf

Run_to_da_hills wrote: »

Will this be a start of the Nationalising of all other banks?

No, not at all. Anglo has been known publicly to be in the most precarious position of all the banks. I don't think it's time to worry about AIB or BoI being nationalised. Honestly, I'm not even remotely surprised by this announcement and I'd say this is shared by many.

quad_red

The state has just taken on all of Anglo's liabilities and debts. Somewhere between six and twenty billion.

Could this get any more depressing?

There had better be a complete bloodbath in the board and senior management now.

mike65

How handy that the EGM tomorrow is now cancelled, will the Dail be willing to get to the bottom of that murkey well?

gurramok

I don't like the state taking on its debts, we have enough debt on the national balance sheet to take care off already.

This will not auger good when selling those bonds.

nesf

gurramok wrote: »

I don't like the state taking on its debts, we have enough debt on the national balance sheet to take care off already.

This will not auger good when selling those bonds.

The alternative of letting it fold might do more damage to the economy though, so it's one of those rock and a hard place situations.

P. Breathnach

gurramok wrote: »

I don't like the state taking on its debts, we have enough debt on the national balance sheet to take care off already.

As the state has already guaranteed deposits, how much worse off will we be?

Dob74

nesf wrote: »

The alternative of letting it fold might do more damage to the economy though, so it's one of those rock and a hard place situations.

It's a sad day when we have to bail out a bank that acted completely irresponsible like Anglo. And we have to let Waterford go down the tubes:(:(

mike65

Ah sure thats only industry - making stuff, we don't do that anymore....

nesf

Dob74 wrote: »

It's a sad day when we have to bail out a bank that acted completely irresponsible like Anglo. And we have to let Waterford go down the tubes:(:(

It's not bailing them out though. If they had just handed them money with no terms on it, I'd agree but even the proposed recapitalisation was harsh (75% of the ownership transferred to the Government with a compulsory 10% dividend to the State each year after that). At least by nationalising them they can attempt to unwind the mess and might be able to repackage the better parts of the bank and sell it off to the market again.

Godge

First, the deposit guarantee was enough. Then, the partial recapitalisation was enough. Now, they have nationalised Anglo Irish Bank. Does Lenihan know what he is doing? More importantly, given his recent record, what comes next?

boardswalker

Instead of saying "The first of the state banks" it would be more correct to say the "Return of the State Banks". Some of us remember ICC, ACC and Foir Teoranta.

The Agricultural Credit Corporation was founded in September 1927 and was one of the first creations of the Irish Free State.

Bank of Scotland (Ireland) started off, in one form or another, in 1933 as ICC Bank. ICC stood for Industrial Credit Corporation.

Foir Teoranta was a state owned rescue agency - maybe calling it a bank is a bit generous. It was a lender but not a taker of deposits.

BenjAii

Dob74 wrote: »

It's a sad day when we have to bail out a bank that acted completely irresponsible like Anglo. (

Where do you draw the line when it comes to the collective irresponsibility that has us all (globally) to be in the mess we are in ?

Believing the never-never property spree was real wealth generation that would go on for ever ? Believing in the fiction of "light touch" self regulating financial markets that allowed the likes of Fitzpatrick & Madoff to make a mockery of it ? (and god knows what more is in the wings waiting to be discovered).

What is most depressing in all of this is that we have no indication of how many 10's of billions of loans are secured on property valued at prices of a few years ago and now in all likelihood delinquent.

Ireland's triple AAA credit rating was put on negative outlook in the last few days, I wonder could this be the event that takes that away from us.

nesf

Godge wrote: »

First, the deposit guarantee was enough. Then, the partial recapitalisation was enough. Now, they have nationalised Anglo Irish Bank. Does Lenihan know what he is doing? More importantly, given his recent record, what comes next?

Regardless of what he might have personally though, if the deposit guarantee or the recapitalisation were to have any hope of succeeding then Lenihan would have to publicly be very optimistic about them working. Even a hint of doubt (even if it was unfounded and incorrect) could have provoked the markets into a feeding frenzy over the banks.

Godge

nesf wrote: »

Regardless of what he might have personally though, if the deposit guarantee or the recapitalisation were to have any hope of succeeding then Lenihan would have to publicly be very optimistic about them working. Even a hint of doubt (even if it was unfounded and incorrect) could have provoked the markets into a feeding frenzy over the banks.

Of course, he had to be publicly optimistic. The point is he is now on his third solution, having had two failures, so you would have to question whether he knows what he is at.

gurramok

How will this affect the sovereign ratings?

I fear the taking on of all this potential billions of debt will hurt Irelands ratings.

Dob74

nesf wrote: »

It's not bailing them out though. If they had just handed them money with no terms on it, I'd agree but even the proposed recapitalisation was harsh (75% of the ownership transferred to the Government with a compulsory 10% dividend to the State each year after that). At least by nationalising them they can attempt to unwind the mess and might be able to repackage the better parts of the bank and sell it off to the market again.

It will be interesting to see what we have got. I known anglo have interests in the casltemartyr area!!! How long will it take for the assets on the books of anglo to become profitable. In the long run the US made money out of the saving & loan scandals in the 80's. Maybe we can make a few bucks. Will take along time.

D.S.

Godge wrote: »

First, the deposit guarantee was enough. Then, the partial recapitalisation was enough. Now, they have nationalised Anglo Irish Bank. Does Lenihan know what he is doing? More importantly, given his recent record, what comes next?

I am sorry mate but this is just a ridiculous statement for a whole host of reasons:

1) Do you think for an instance that Brian Lenihan as a politician whose education is in law is a deep expert in financial matters and banking operations??? Of course not. He is being advised by his experts on everything that is going on. They have deep experience but even so - we are in the midst of the worst global recession imaginable so trying to predict future events when so much is changing in our midst is incredibly difficult. Making any plays whatsoever have to be very carefully considered particularly as a result of the huge amounts of money involved in bringing stability to the system and to the high risk of failure anyway due to the open economy we have.

2) The deposit guarantee was not a failure. It might not have been enough to bring stability to the banking system but it was not a failure. The guarantee fund did exactly what is was supposed to do - make it easier for our banks to raise funding. However, the problems in the banking system are a result of weakening lending standards over the last few years and the property crisis which has increased the credit risk of the mortgage book, and difficulties on the inter-bank lending market as a result of lack of liquidity in the financial system. Therefore, the guarantee fund only helped ease problem two. The mistake I believe Lenihan has made is that the guarantee scheme was way too short in only being open for 2 years.

3) If you look at the banking crises in South East Asia, the government's actions v closely follows what has happened in those countries. Those countries started off by setting up a guarantee fund, waited awhile and followed with merging weaker players with stronger ones, then recapatilised the banking system and actually went a step further in some countries in creating a "bad bank" where all the toxic assets were transferred and managed. None of this happened over night and there was months if not years in between each step.

So in short, your argument that Lenihan a) should be an expert of financial matters, and b), by employing a guarantee fund and a recaptilisation scheme that somehow this is a sign of weakness, for me are just plain ridiculous.

There is a lot of over reaction to this crisis and huge amount of mis reporting. Furthermore, the public clearly are looking for someone to lynch and can't yet decide between the banks or the politicians.

For me, there have been huge mistakes made. And certain people should be made accountable. However, every player needs to be examined on a case by case basis. I don't believe Lenihan has actually made a specifically poor decision. If anything, he is too slow to make his calls. I believe his current plays over 1) Anglo Irish and 2) Recapitalisation and 3) Restructuring of the Irish Banking System will ultimately determine how sucessful he is in managing this crisis. Personally, I don't believe there is a case for leaving Anglo Irish continue to operate on it's own without merging. Secondly, I think that all toxic debt should be transferred to a state run "bad bank" and finally, the Irish Banking system and it's players are too large and should reduce their assets, and consolidate.

nesf

Godge wrote: »

Of course, he had to be publicly optimistic. The point is he is now on his third solution, having had two failures, so you would have to question whether he knows what he is at.

I'm not sure if I would agree. The problem here is that the third solution is really not the preferred option. It's very much a case of option c) being the absolute last resort. I'd be worried if he hadn't tried softer (and cheaper) options first before deciding to nationalise the bank.

Baird

D.S. wrote: »

I am sorry mate but this is just a ridiculous statement for a whole host of reasons:

1) Do you think for an instance that Brian Lenihan as a politician whose education is in law is a deep expert in financial matters and banking operations??? Of course not. He is being advised by his experts on everything that is going on. They have deep experience but even so - we are in the midst of the worst global recession imaginable so trying to predict future events when so much is changing in our midst is incredibly difficult. Making any plays whatsoever have to be very carefully considered particularly as a result of the huge amounts of money involved in bringing stability to the system and to the high risk of failure anyway due to the open economy we have.

2) The deposit guarantee was not a failure. It might not have been enough to bring stability to the banking system but it was not a failure. The guarantee fund did exactly what is was supposed to do - make it easier for our banks to raise funding. However, the problems in the banking system are a result of weakening lending standards over the last few years and the property crisis which has increased the credit risk of the mortgage book, and difficulties on the inter-bank lending market as a result of lack of liquidity in the financial system. Therefore, the guarantee fund only helped ease problem two. The mistake I believe Lenihan has made is that the guarantee scheme was way too short in only being open for 2 years.

3) If you look at the banking crises in South East Asia, the government's actions v closely follows what has happened in those countries. Those countries started off by setting up a guarantee fund, waited awhile and followed with merging weaker players with stronger ones, then recapatilised the banking system and actually went a step further in some countries in creating a "bad bank" where all the toxic assets were transferred and managed. None of this happened over night and there was months if not years in between each step.

So in short, your argument that Lenihan a) should be an expert of financial matters, and b), by employing a guarantee fund and a recaptilisation scheme that somehow this is a sign of weakness, for me are just plain ridiculous.

There is a lot of over reaction to this crisis and huge amount of mis reporting. Furthermore, the public clearly are looking for someone to lynch and can't yet decide between the banks or the politicians.

For me, there have been huge mistakes made. And certain people should be made accountable. However, every player needs to be examined on a case by case basis. I don't believe Lenihan has actually made a specifically poor decision. If anything, he is too slow to make his calls. I believe his current plays over 1) Anglo Irish and 2) Recapitalisation and 3) Restructuring of the Irish Banking System will ultimately determine how sucessful he is in managing this crisis. Personally, I don't believe there is a case for leaving Anglo Irish continue to operate on it's own without merging. Secondly, I think that all toxic debt should be transferred to a state run "bad bank" and finally, the Irish Banking system and it's players are too large and should reduce their assets, and consolidate.

Excellent post and one which everyone here should read at least twice imho!

gurramok

Uh oh
http://www.forexpros.com/news/financial-news/update-1-ireland-defends-anglo-move;-banking-shares-slide-21114

"I would suspect that as time has gone on it has become abundantly clear that there are so many unexploded land mines in Anglo that the government had to throw something on it," said Brian Lucey, associate professor of finance at Dublin's Trinity College.

"Unfortunately they have thrown the Irish economy onto these exploding bombs ... So, we have seen as a minimum I think a doubling of the national debt as a consequence of this," Lucey said.

The cost of protecting Ireland's debt against default rose sharply on Friday with five-year credit default swaps on its sovereign debt quoted at a 250 basis point mid-point by two traders, although bid-offer spreads varied, roughly 30 basis points higher from a day earlier.

Ireland was already forecasting a jump in its general government debt to GDP ratio to 53 percent this year from 41 percent last year and 25 percent in 2007, when cracks first started to appear in the domestic property market.

Ratings agencies have warned that Ireland's exposure to the banking sector's bad debts and a sharply contracting economy could affect its AAA credit rating.

ranger4

D.S. wrote: »

I am sorry mate but this is just a ridiculous statement for a whole host of reasons:

1) Do you think for an instance that Brian Lenihan as a politician whose education is in law is a deep expert in financial matters and banking operations??? Of course not. He is being advised by his experts on everything that is going on. They have deep experience but even so - we are in the midst of the worst global recession imaginable so trying to predict future events when so much is changing in our midst is incredibly difficult. Making any plays whatsoever have to be very carefully considered particularly as a result of the huge amounts of money involved in bringing stability to the system and to the high risk of failure anyway due to the open economy we have.

2) The deposit guarantee was not a failure. It might not have been enough to bring stability to the banking system but it was not a failure. The guarantee fund did exactly what is was supposed to do - make it easier for our banks to raise funding. However, the problems in the banking system are a result of weakening lending standards over the last few years and the property crisis which has increased the credit risk of the mortgage book, and difficulties on the inter-bank lending market as a result of lack of liquidity in the financial system. Therefore, the guarantee fund only helped ease problem two. The mistake I believe Lenihan has made is that the guarantee scheme was way too short in only being open for 2 years.

3) If you look at the banking crises in South East Asia, the government's actions v closely follows what has happened in those countries. Those countries started off by setting up a guarantee fund, waited awhile and followed with merging weaker players with stronger ones, then recapatilised the banking system and actually went a step further in some countries in creating a "bad bank" where all the toxic assets were transferred and managed. None of this happened over night and there was months if not years in between each step.

So in short, your argument that Lenihan a) should be an expert of financial matters, and b), by employing a guarantee fund and a recaptilisation scheme that somehow this is a sign of weakness, for me are just plain ridiculous.

There is a lot of over reaction to this crisis and huge amount of mis reporting. Furthermore, the public clearly are looking for someone to lynch and can't yet decide between the banks or the politicians.

For me, there have been huge mistakes made. And certain people should be made accountable. However, every player needs to be examined on a case by case basis. I don't believe Lenihan has actually made a specifically poor decision. If anything, he is too slow to make his calls. I believe his current plays over 1) Anglo Irish and 2) Recapitalisation and 3) Restructuring of the Irish Banking System will ultimately determine how sucessful he is in managing this crisis. Personally, I don't believe there is a case for leaving Anglo Irish continue to operate on it's own without merging. Secondly, I think that all toxic debt should be transferred to a state run "bad bank" and finally, the Irish Banking system and it's players are too large and should reduce their assets, and consolidate.

Did the south east asia banking crises occur during simmiler events like ireland and how long did it take from first guarentee of funds before the banks started to make profit.

Baird

ranger4 wrote: »

Did the south east asia banking crises occur during simmiler events like ireland and how long did it take from first guarentee of funds before the banks started to make profit.

See the attached file mate.

cavedave

D.S.

we are in the midst of the worst global recession imaginable

we are not even close to that. Any number of inevitable disasters would result in a much worse financial situation. For example
1. Flu pandemic which killed 5% of world population.
2. Canary island volcano falling into the Atlantic
3. Yosemite volcano exploding
4. New ice age

If you really cannot imagine a worse economic event then a few banks failing you might want to look at some geological history

Baird

Another paper worth having a look at if historical crisis are your thing.

Baird

cavedave wrote: »

we are not even close to that. Any number of inevitable disasters would result in a much worse financial situation. For example
1. Flu pandemic which killed 5% of world population.
2. Canary island volcano falling into the Atlantic
3. Yosemite volcano exploding
4. New ice age

If you really cannot imagine a worse economic event then a few banks failing you might want to look at some geological history

Yosemite volcano or canary island volcano exploding would have a bigger economic impact that a global financial meltdown.
New Ice age would take centuries.
Are you having a laugh with this post?

cavedave

Yosemite volcano or canary island volcano exploding would have a bigger economic impact that a global financial meltdown.
.

That is my point

New Ice age would take centuries

{citation needed}

the move from interglacial to much colder-than-present glacial conditions occurred over a period of less than 400 years (with the limitations on the resolution of the sediment record leaving open the possibility that the change was in fact very much more rapid than this).

Are you having a laugh with this post?

If i have said something that is factually incorrect please point it out.

This recession is bad, much worse then most people imagine. Its at the point where those stocking up on gold are overly optimistic, they should be stocking up on rice*. However it is not the worst recession imaginable by a long way.

Carawaystick

Am I right in thinking that the liabilities of this move are the deposits which we already guaranteed and the assets are the loan book, which may get repaid (partially)

as in we're not really in a worse position regarding the deposits than on wednesday?

I do think the timing is suspect - Shane Ross was on tv last night saying it stinks of a cover up regarding the egm due for today. Also it seems strange that the govt knew more about the bank's situation than the (ex)shareholders - shouldn't the board have disclosed to them any pertinant information - it seems to say irish corporate governance hasn't moved on since fyffes/dcc, where fyffes were hiding their poor trading position in the crash of 2000

BroomBurner

BenjAii wrote: »

Ireland's triple AAA credit rating was put on negative outlook in the last few days, I wonder could this be the event that takes that away from us.

I thought those ratings were meaningless these days anyway?

ranger4

Baird wrote: »

Another paper worth having a look at if historical crisis are your thing.

Thanks for info, Which of the past events is closest to the present situation and when can you see us and euro markets improving.

I am pie

My apologies if this is a stupid question, but what is the impact on shareholders ? What is their likely compensation ?.

Hard to know. I would have said nothing however the government are setting up some sort a valuation overseer for compensation.

P. Breathnach

I am pie wrote: »

My apologies if this is a stupid question, but what is the impact on shareholders ? What is their likely compensation ?.

I expect they will get what their shares are worth: nothing.

I am pie

Thanks, whilst i don't hold any Anglo shares I would be concerned that if compensation is not offered (and i'm not saying it should be offered) that shareholders will dump shares of AIB / BOI etc out of fear of ending up in the same position. This would leave the rest of the Irish banks in an even more precarious position than they're already in .

ranger4

I am pie wrote: »

Thanks, whilst i don't hold any Anglo shares I would be concerned that if compensation is not offered (and i'm not saying it should be offered) that shareholders will dump shares of AIB / BOI etc out of fear of ending up in the same position. This would leave the rest of the Irish banks in an even more precarious position than they're already in .

Wipeout with irish banks, My aib has craterd, Lots of small volume sales so i guess most pensioners and small investors etc are expecting the same outcome with anglo to happen to aib down the road, The banks are going to have to come clean now and make a statement in relation with loans or any hidden loans if they want to bring some sence of calm to the markets otherwise aib and boi are going down the same path as anglo.

D.S.

ranger4 wrote: »

Did the south east asia banking crises occur during simmiler events like ireland and how long did it take from first guarentee of funds before the banks started to make profit.

Historical account attached on the South East Asia piece. More historical accounts available from www.bis.org.

cavedave wrote: »

we are not even close to that. Any number of inevitable disasters would result in a much worse financial situation. For example
1. Flu pandemic which killed 5% of world population.
2. Canary island volcano falling into the Atlantic
3. Yosemite volcano exploding
4. New ice age

If you really cannot imagine a worse economic event then a few banks failing you might want to look at some geological history

Take your point but it's all relative. 2 years ago, all predictions were for a "soft landing" and even the extreme scenarios were not as extreme as for a liquidity crisis in the inter-bank lending markets.

Clearly, it can always get worse. My point was that nobody really forsaw the chain of events that occurred over the last 18 months. Particularly, nobody ever forsaw the decline in Investment Banks.

D.S.

ranger4 wrote: »

Wipeout with irish banks, My aib has craterd, Lots of small volume sales so i guess most pensioners and small investors etc are expecting the same outcome with anglo to happen to aib down the road, The banks are going to have to come clean now and make a statement in relation with loans or any hidden loans if they want to bring some sence of calm to the markets otherwise aib and boi are going down the same path as anglo.

I wouldn't be so quick to tar all the other Irish banks with the Anglo brush. AIB will, without doubt, have higher bad debt charges and a large increase in credit risk as a result of the downturn. However, AIB have diversified fairly well. They have assets in Eastern Europe and America (even if the values have deteriorated). The income streams in Eastern Europe are particularly good and can only continue to rise as the these economies develop and grow over the coming years.

I agree that the uncertainty should be removed. The Government at this stage know what the state of play is, they should announce it but take immediate action to mitigate the risk (i.e. recapitalisation etc) so as to prevent any financial instability. Once we know how bad it really is with the Irish banks, how bad it could get, and take appropriate action, then we will start to turn the corner.

The issue for me is that the uncertainty itself is causing a crisis of confidence and risks causing the decision making within the Department of Finance to be made from a political perspective rather than from a pure economic one.

Baird

cavedave wrote: »

That is my point

I was being sarcastic mate :rolleyes:
A global financial meltdown is a much bigger shock than a flippin volcano in a national park!

cavedave

Baird

A global financial meltdown is a much bigger shock than a flippin volcano in a national park!

A supervocano eruption is an existential threat to humanity. The last one reduced human numbers to 5000. So no a financial crisis is of no significance against a yellowstone Caldera eruption

The last time one of these things exploded is believed to have been 74,000 years ago at Toba in Sumatra, there is a large lake filling the caldera at present. The TV program also revealed that other researchers, studying human genetics had found evidence that humans came close to extinction between 70,000 and 80,000 years ago; the global population suddenly fell to around 5,000 people. This is now thought to be due to the effect on the world's weather of the dust from the Toba eruption.

Baird

cavedave wrote: »

A supervocano eruption is an existential threat to humanity. The last one reduced human numbers to 5000. So no a financial crisis is of no significance against a yellowstone Caldera eruption

You are comparing a 1 in 100 year event to a 1 in a 100,000 year event.
Nice work :rolleyes:

AlekSmart

A supervolcano eruption is an existential threat to humanity

.

Are there any such things in Offaly ?

cavedave

Ok in an attempt to get this thread back on track from my digression.

The government did not buy anything. You did.
What did they buy? Probably about 20 billion in bad debt. So you just took out an about 4000 loan. For this you got the possibility Anglo will make money in future. But no one who is willing to put their money where their mouth is thinks Anglo will make money in future that is why its shares were worth so little.

So now you owe an extra 4000 euro that you have very little chance of getting any return on. If you spent 4000 euro on education or on doing up your house for sale or on improving the machines you work with you would have increased future earning ability and so increased future spending ability. If you buy something that does not increase your future earning ability (a bad debt) you have to reduce future spending. So you now have 4000 euro less to spend in future.

Yesterday you borrowed 4k euro at a time when you are worried about your job and trying to cut down on spending.

BenjAii

cavedave wrote: »

So you now have 4000 euro less to spend in future.

Yesterday you borrowed 4k euro at a time when you are worried about your job and trying to cut down on spending.

Except that 4K did buy something. It's spending to avoid the systematic collapse of Irish banking and by extension the wider Irish economy, which the Gov clearly felt would happen if it allowed Anglo to go to the wall.

Looked at that way, we've saved ourselves from far bigger losses that would have occurred had Anglo been allowed to fail.

dragonbet

Just three points.

1. I feel this national debt crap is irrelevant as the govt. would not of taken this action had it not been 100% necessary, both for the 'national interest' and to stabilise the whole financial sector. There is also a faint possibility that this action might eventually reduce the national debt in the long term. (I'll build on this in point 3). I feel we can not make a case for either until we truely know the level of defaulters in Anglo.

2. Has everyone failed to realise that some of Anglos biggest borrowers e.g. Quinn, own and operate very profitable companies with excessive assets and broad portfolios, there is no reason what so ever to believe someone like Sean Quinn would default on any of these loans, even if he did borrow money to buy shares in Anglo.!! All articles and posts seem to suggest there is a majority of people defaulting on Anglo loans, there is no reason to believe this and even if Sean Fitzpatrick has €87 million borrowed from Anglo, this doesnt mean this will not be paid back, in full, on time, with interest.! Ok, most of Anglos heaviest borrowers are probably quite exposed but if they are largely exposed through money borrowed from Anglo, it is inevitable that Anglo have massive security against these borrowings, even from Sean Fitzpatrick.

3. The last time I dealt we Anglo, they lent us 80% of the money to buy a prominent commercial site, about €1.5 milion. Along with the 20% we put up, Anglo held deeds of a 2000sq ft city centre house, a 25 acre farm on the N4 and of course the deeds to the site we were purchasing. Even by todays figures this site was significantly undervalued and was actually sold on by us for €4million, 18 months ago. Now, had we defaulted on this loan Anglo would have seized the security and would still have made a profit even if they had taken a very, very bad price on the farm, city centre house and commercial site. This is not even considering the roughly €100,000 - €200,000 plus we would have paid in interest and capital already.

Would anyone know of any other situation such as this, I feel this kinda shows that Anglo have significantly more security than any other bank...!! And even taking bad prices, as the market is virtually dead, they would still be able to trade their way out of this financial cease pool of filth.:)

dragonbet

dragonbet wrote: »

Just three points.

1. I feel this national debt crap is irrelevant as the govt. would not of taken this action had it not been 100% necessary, both for the 'national interest' and to stabilise the whole financial sector. There is also a faint possibility that this action might eventually reduce the national debt in the long term. (I'll build on this in point 3). I feel we can not make a case for either until we truely know the level of defaulters in Anglo.

National Debt is always relevant I cant believe you claim it is not :eek::mad::mad::mad:

dragonbet wrote: »

2. Has everyone failed to realise that some of Anglos biggest borrowers e.g. Quinn, own and operate very profitable companies with excessive assets and broad portfolios, there is no reason what so ever to believe someone like Sean Quinn would default on any of these loans, even if he did borrow money to buy shares in Anglo.!! All articles and posts seem to suggest there is a majority of people defaulting on Anglo loans, there is no reason to believe this and even if Sean Fitzpatrick has €87 million borrowed from Anglo, this doesnt mean this will not be paid back, in full, on time, with interest.! Ok, most of Anglos heaviest borrowers are probably quite exposed but if they are largely exposed through money borrowed from Anglo, it is inevitable that Anglo have massive security against these borrowings, even from Sean Fitzpatrick.

He borrowed money to buy shares breaking a fundamental rule about investing which shatters my view of him as a businessman. Another point goddamn insurance costs a one reason our nation is not competitive. I call shennanigans - oligopoly. Quinn insurances be damned they are only so rich because we are uncompetitive in this sector.
Let anglo fail and reform out insurance sector - SAVE JOBS!

dragonbet wrote: »

3. The last time I dealt we Anglo, they lent us 80% of the money to buy a prominent commercial site, about €1.5 milion. Along with the 20% we put up, Anglo held deeds of a 2000sq ft city centre house, a 25 acre farm on the N4 and of course the deeds to the site we were purchasing. Even by todays figures this site was significantly undervalued and was actually sold on by us for €4million, 18 months ago. Now, had we defaulted on this loan Anglo would have seized the security and would still have made a profit even if they had taken a very, very bad price on the farm, city centre house and commercial site. This is not even considering the roughly €100,000 - €200,000 plus we would have paid in interest and capital already.

Would anyone know of any other situation such as this, I feel this kinda shows that Anglo have significantly more security than any other bank...!! And even taking bad prices, as the market is virtually dead, they would still be able to trade their way out of this financial cease pool of filth.:)

So you are an Anglo Irish customer - and thus your views are for saving the bank, makes sense. I am a tax payer and am about to be **** so my view is also tainted. You win though - most people dont even realise whats going on, too busy chatting about soaps and football players.

Nice first post by the way!

BenjAii

Dragonbet, your point on the extent of Anglo bad debt, is like everyone else, just conjecture.

Neither you nor anyone else knows, because the Gov hasn't disclosed to the taxpayer what they have saddleded them with.

As it stands the true value of any properties loans were obtained for, or used as securities, could only be valued at rock-bottom firesale prices, unless held into the future, further complicating a true picture of Anglos' books.

dragonbet

Deleted User wrote: »

National Debt is always relevant I cant believe you claim it is not :eek::mad::mad::mad:

Oh no, I understand that this is really, really, really relevant but in the context of saving the country and the other banks and small firms, the issues are much greater than an increase in National Debt, that might never happen or as I stated might actually lead eventually to a decrease.


He borrowed money to buy shares breaking a fundamental rule about investing which shatters my view of him as a businessman. Another point goddamn insurance costs a one reason our nation is not competitive. I call shennanigans - oligopoly. Quinn insurances be damned they are only so rich because we are uncompetitive in this sector.
Let anglo fail and reform out insurance sector - SAVE JOBS! !

Insurance isnt reallly that dear, relative to other countries and relative to the past, and relative to the claim conscious scum that live in Ireland.!! I didnt know there was fundamental rules for investing, perhaps you could post these fundamental investor rules or even send them to the banks, cos if there is "rules" then we should all follow them and save the country, horay.!!! Who wrote these rules you speak of and how come your only telling us now. Actually, you should just send these rules to Sean Quinn himself cos perhaps you could teach something to the richest man in the country. I'll just forgive him for one bad investment decision.


So you are an Anglo Irish customer - and thus your views are for saving the bank, makes sense. I am a tax payer and am about to be **** so my view is also tainted. You win though - most people dont even realise whats going on, too busy chatting about soaps and football players.![/quote]

I aint an Anglo customer, I said we sold the property...!! I'm actually currently an National Irish Bank, BOI and IIB/KBC customer, who arent doin a great job in passin on the rate cuts KBC), but thats a different kettle of fish. And without sounding lik an asshole I am also a tax payer, a quite substantial one and a very unhappy one.

Finally, the govt. is saving the bank to save the financial broader community and to hopefully try refinance small companies, like mine, so we can then save jobs and not lay more people off..!! This is the grass root problem and the main reason for all the small firms making redundancys that are multiplying every day.

Nice first post by the way![/quote]

Cheers

dragonbet

BenjAii wrote: »

Dragonbet, your point on the extent of Anglo bad debt, is like everyone else, just conjecture.

Neither you nor anyone else knows, because the Gov hasn't disclosed to the taxpayer what they have saddleded them with.

As it stands the true value of any properties loans were obtained for, or used as securities, could only be valued at rock-bottom firesale prices, unless held into the future, further complicating a true picture of Anglos' books.

True, true, true.!! But in light of my former experience with Anglo, with the amount of security they look for and there investment terms I still feel that the vast majority of money lent could be recouped even at fire sale prices, and there is no shortage of people out there holding onto cash for firesale prices, myself included. e.g. I seen this article a few weeks ago www.johnmacmahon.ie

I would love to hear some other peoples experiences in relation to security with Anglo investments...!!!

-mr.x-

AIB share price reached €1.45 on friday.

why is anglo being nationalised so bad for AIB?

Also what what could AIBs share price potentialy recover to if the bank does well in the next 1 or 2 years.

ranger4

D.S. wrote: »

I wouldn't be so quick to tar all the other Irish banks with the Anglo brush. AIB will, without doubt, have higher bad debt charges and a large increase in credit risk as a result of the downturn. However, AIB have diversified fairly well. They have assets in Eastern Europe and America (even if the values have deteriorated). The income streams in Eastern Europe are particularly good and can only continue to rise as the these economies develop and grow over the coming years.

I agree that the uncertainty should be removed. The Government at this stage know what the state of play is, they should announce it but take immediate action to mitigate the risk (i.e. recapitalisation etc) so as to prevent any financial instability. Once we know how bad it really is with the Irish banks, how bad it could get, and take appropriate action, then we will start to turn the corner.

The issue for me is that the uncertainty itself is causing a crisis of confidence and risks causing the decision making within the Department of Finance to be made from a political perspective rather than from a pure economic one.

I agree with you, especialy with your views with doing something possitive and helping to remove the mass uncertainty thus helping to calm the irish financial market, would be great if some possitive statement was released before the short selling ban runs out as i feel the stock could be traded down to penny status.

dh2007

I read this morning on the Irish Times website that Maurice Keane former BoI CEO will join Anglo Irish's board.

So much for getting rid of all the old cronies!!!! This will NOT solve our problems
GRRRRRR :mad: