The Carroll saga - AIB giving joe soap the fingers

D3PO

Just heard earlier that the majority of Liam Carrolls property debt is with AIB.

Now AIB have given him a 3 year Moratorium on this (all payments and interest)

You can be sure the average Joe soap struggling to pay their mortgage wouldnt be given a 3 year break in relation to payments and interest. Just another bank sticking 2 fingers up to the average joe soap.

I wonder if this opens up some wriggle room from a legal perspective for those struggling with repo hearings. What kind of view will the court take in terms of granting reposession orders when banks are giving developers 3 years interest free to sort themselves out ?

D3PO

Not to mind AIB knowing in doing this they wont have to honour the moratorium as these loans will be passed onto NAMA.

Meaning we have to front 3 years interest free to a greedy developer. This is an absolute disgrace

Imposter

It's the old chestnut - if it's a small amount the borrower has the problem if it's a big amount the bank has the problem. AIB are simply acting as any business should and have probably realised there is no hope of them being repaid in full. They are therefore now deciding what is best for them - Nama or calling in the loans. All the other banks covered by Nama that are affected here are following the same strategy - ACC don't have that option so they try and call in the loans - Carroll tries to play for time and wait for Nama as well.

Makes me wonder why anyone (taxpayer anyone - not big business anyone) can see Nama as a good thing...

D3PO

Exactly my point. FF must think we are right muppets is we believe the NAMA will make money in the long term spin.

NAMA - The great bank bailout. Screwing you, your children and your grandchildren

spockety

D3PO wrote: »

Exactly my point. FF must think we are right muppets is we believe the NAMA will make money in the long term spin.

NAMA - The great bank bailout. Screwing you, your children and your grandchildren

I think stopping at grandchildren is being wildly optimistic.

AARRRGH

NAMA cannot work. It doesn't matter what they pay for the assets, the end result for the tax payer is a bad deal.

If NAMA pay too little:

AIB have 20 billion in bad loans.
NAMA pays 10 billion for the loans.
AIB now have a 10 billion hole in their balance sheet.
AIB require a 10 billion bail out.
Cost to tax payer: 20 billion.

If NAMA pay too much:

AIB have 20 billion in bad loans.
NAMA pays the "economic value" of the loans, e.g. 18 billion.
AIB now have a 2 billion hole in their balance sheet.
AIB require a 2 billion bail out.
Cost to tax payer: 20 billion.

It's ridiculous and is one of the reasons I will be emigrating soon.

D3PO

AARRRGH wrote: »

If NAMA pay too much:

AIB have 20 billion in bad loans.
NAMA pays the "economic value" of the loans, e.g. 18 billion.
AIB now have a 2 billion hole in their balance sheet.
AIB require a 2 billion bail out.
Cost to tax payer: 20 billion.

It's ridiculous and is one of the reasons I will be emigrating soon.

Well option 2 wouldnt require a bailout to AIB because with their new healthy loan book they could easily raise the capital to plug the gap and the taxpayer wouldnt be on the hook for it.

However more to the point NAMA will have overpaid so the gap in the public finances comes from this as there will be no clawback of this from a sale of the Asset.

And trust me using your example the gap would be more than 2 billion it would be closer to 8 billion

AARRRGH

D3PO wrote: »

And trust me using your example the gap would be more than 2 billion it would be closer to 8 billion

So AIB would require a bailout.

This country is so corrupt and incompetent, I'm sick of it.

Salvelinus

D3PO wrote: »

Exactly my point. FF must think we are right muppets is we believe the NAMA will make money in the long term spin.

NAMA - The great bank bailout. Screwing you, your children and your grandchildren

All the inheritos careers depend on it.

Victor

D3PO wrote: »

Meaning we have to front 3 years interest free to a greedy developer. This is an absolute disgrace

This is 3 years when they don't have to make payments. I imagine interest will still accrue.

This distinguishes it from the common situation of interest-only loans, where the capital is paid back at the end.

jimmycrackcorm

NAMA cannot work. It doesn't matter what they pay for the assets, the end result for the tax payer is a bad deal.

If NAMA pay too little:

AIB have 20 billion in bad loans.
NAMA pays 10 billion for the loans.
AIB now have a 10 billion hole in their balance sheet.
AIB require a 10 billion bail out.
Cost to tax payer: 20 billion.

If NAMA pay too much:

AIB have 20 billion in bad loans.
NAMA pays the "economic value" of the loans, e.g. 18 billion.
AIB now have a 2 billion hole in their balance sheet.
AIB require a 2 billion bail out.
Cost to tax payer: 20 billion.

It's ridiculous and is one of the reasons I will be emigrating soon.

The key difference is that Nama can take a long term view on property allowing prices to recover somewhat. The banks don't have that luxury.

D3PO

Victor wrote: »

This is 3 years when they don't have to make payments. I imagine interest will still accrue.

.

Victor your wrong here. they have given him 3 YEARS INTERST FREE !!!!

if it was 3 years interest only I wouldnt be making this post as anybody can ask for an interest only period.

jmayo

jimmycrackcorm wrote: »

The key difference is that Nama can take a long term view on property allowing prices to recover somewhat. The banks don't have that luxury.

No basically the Irish taxpayer is been told, not asked, to take the risk of sitting on useless property (half devleopr sites, empty buildings and over priced development land) that realistically doesn't come anywhere close to matching the loans outstanding.

We are being forced to take long term view, so that the banks can return to normally trading i.e. charging us the customers for the privledge of getting our own money lent to us or for storing our own money.
Sweet deal for them, not so sweet for the ordinary punter that is being asked to carry the can.

And we are told if the banks don't increase charges then how will they be able to make money to handle their loan writeoffs, stay in business and possibly be sellable so that the taxpayers recapitalisation costs can be recouped someday.
The real nice argument is that they need to make money to possibly pay back any possible levies that may be imposed by the government for the government guarantees, the government recapitalisation bailouts, etc.

Now in those scenarios listed above you will notice there are a lot of ifs, maybes, possiblys and unknowns . Nothing really concrete, well apart from it is going to cost us the ordinary taxpayers and customers big time. :rolleyes:

partyguinness

As the saying goes:

Owe the bank €1,000 it's your problem.

Owe the bank €1,000,000 it's their problem.

SkepticOne

partyguinness wrote: »

As the saying goes:

Owe the bank €1,000 it's your problem.

Owe the bank €1,000,000 it's their problem.

Developers owe the bank €90,000,000,000 and it's your problem again.

vikena

SkepticOne wrote: »

Developers owe the bank €90,000,000,000 and it's your problem again.

or in slightly different words


owe the bank 1million its your problem

owe the bank 10million its the bank's problem

owe the bank 100million it's the tax payers' problem

v

irishguy

D3PO wrote: »

Just heard earlier that the majority of Liam Carrolls property debt is with AIB.

Now AIB have given him a 3 year Moratorium on this (all payments and interest)

You can be sure the average Joe soap struggling to pay their mortgage wouldnt be given a 3 year break in relation to payments and interest. Just another bank sticking 2 fingers up to the average joe soap.

I wonder if this opens up some wriggle room from a legal perspective for those struggling with repo hearings. What kind of view will the court take in terms of granting reposession orders when banks are giving developers 3 years interest free to sort themselves out ?

If you owe the bank €100,000, its your problem. If you owe them €100,000,000 its their problem. These guys are too big to fall, I would be amazed it they were allowed to be liquidated. Its all caused by poor regulation both inside and outside the banks.

SkepticOne

vikena wrote: »

or in slightly different words


owe the bank 1million its your problem

owe the bank 10million its the bank's problem

owe the bank 100million it's the tax payers' problem

v

If only it was as little as 100 million.

damnyanks

Correct me if I'm wrong...

Developer owes AIB 20Bill
NAMA buys the debt for 10bill (.5 on the euro)

The debt for the developer is still 20bill.

I'm not really keeping up with the irish banking story as its too much time but I'm assuming the banks are actually paying to be bailed out (either via repayment schemes or return for equity int eh bank)

mrsdewinter

Surely one of the worst things about the whole NAMA legislation is that we the taxpayer is being asked to bet that there will be another property bubble. After all, we can only recoup what we pay for the land & empty apartment blocks if prices rise to 2005-2006 levels. Isn't there something deeply wrong about this? During the last boom, at least it was only the developers and banks feeding the insane bubble ... from the autumn, it'll be in the national interest to get back on the merry-go-round

quozl

damnyanks wrote: »

Correct me if I'm wrong...

I'm not really keeping up with the irish banking story as its too much time but I'm assuming the banks are actually paying to be bailed out (either via repayment schemes or return for equity int eh bank)

Ok, consider yourself corrected

There's no equity stake for the NAMA bail-out, it would need to be all the equity, the banks are basically insolvent, but the government refuses to nationalise them.

We get no shares in return for the NAMA bail-out.

It's a deliberate gifting of tens of billions of euros to the banks to prevent them from collapsing. With no monetary return for the tax-payer unless prices reinflate to the level of the biggest bubble in irish history. Which would be more damaging again than just taking our massive loses of this gift.

There was initially some talk of banks paying back some of our loses if we bought at too high a value (which we will). However, as I understand it, that's not made it into the actual bil. Which tbh makes some sense as if the banks had a vast, un-quanitifiable debt to the government then they'd be no more credit-worthy than they are now.

IMO the whole thing reeks - if we're giving them all this money because they're so crucial (or more likely because we're on the hook for being foolish enough to guarantee their debts) we should at least be buying something, ie the banks, with it. I'd vaguely rather lose 50 billion than 60.

Carawaystick

AARRRGH wrote: »

NAMA cannot work. It doesn't matter what they pay for the assets, the end result for the tax payer is a bad deal.

If NAMA pay too little:

AIB have 20 billion in bad loans.
NAMA pays 10 billion for the loans.
AIB now have a 10 billion hole in their balance sheet.
AIB require a 10 billion bail out.
Cost to tax payer: 20 billion.

If NAMA pay too much:

AIB have 20 billion in bad loans.
NAMA pays the "economic value" of the loans, e.g. 18 billion.
AIB now have a 2 billion hole in their balance sheet.
AIB require a 2 billion bail out.
Cost to tax payer: 20 billion.

It's ridiculous and is one of the reasons I will be emigrating soon.

In the first case, you should nationalise the bank, then the taxpayer gets any upside when you re-float it after fixing it.

If we overpay, then the shareholders and bondholders get the upside.

Basically the govt is going to transfer the nations wealth to shareholders and bondholders, many, if not most of which are foreign entities.

allthedoyles

irishguy wrote: »

These guys are too big to fall, I would be amazed it they were allowed to be liquidated. Its all caused by poor regulation both inside and outside the banks.

I often pass by Carrolls holiday homes and they always appear to be vacant.

It no wonder , just look at the prices he is charging for one night in the 'back of beyonds '

http://www.kilkennyholidayhomes.ie/index.asp

Thanos

Thought this thread would have more comments now the the courts have ruled against him.

ACC will go after their money, and AIB and BoI cannot sit on the sidelines any more if they want their cut.............................

vikena

ACC bank therefore are now about to determine the price of irish property and not the irish taxpayer via NAMA.

It seems if you want a free market economy you must take the good with the bad.

Sold 90% of my irish bank shares this am. Kept 10% for the crack

V

spockety

vikena wrote: »

ACC bank therefore are now about to determine the price of irish property and not the irish taxpayer via NAMA.

It seems if you want a free market economy you must take the good with the bad.

Sold 90% of my irish bank shares this am. Kept 10% for the crack

V

NAMA will ignore the market price set by ACC for Carroll's assets. They will call it an 'anomaly', or suggest that it's not 'reflective of the long term economic value of the assets'. They may possibly try to suggest that there is a wide range of property in the NAMA portfolio and the Carroll assets to not necessarily reflect the value of the entire range of bad loan assets elsewhere in the state.

Etc. Etc. You get the picture.

vikena

Mary McAleese will surely have a problem signing NAMA into law as she can have no basis for believing that NAMA's valuation of property IS or WILL BE reflective of the long term economic value of the assets.

The precise reason which the Supreme Court gave yesterday when dismissing Liam Carroll's defence.

V

bangersandmash

mrsdewinter wrote: »

Surely one of the worst things about the whole NAMA legislation is that we the taxpayer is being asked to bet that there will be another property bubble. After all, we can only recoup what we pay for the land & empty apartment blocks if prices rise to 2005-2006 levels. Isn't there something deeply wrong about this? During the last boom, at least it was only the developers and banks feeding the insane bubble ... from the autumn, it'll be in the national interest to get back on the merry-go-round

Excellent point, and one that hasn't been sufficiently articulated in the media.

spockety

bangersandmash wrote: »

Excellent point, and one that hasn't been sufficiently articulated in the media.

If there's one thing this entire sorry episode will show, it's just how spineless and incompetent our media and opposition are.

I mean, the government are there for the slaughter, the facts are available to be laid bare. But nothing.

AARRRGH

vikena wrote: »

Sold 90% of my irish bank shares this am. Kept 10% for the crack

With the way the Irish economy is headed, you'll need it.

AARRRGH

I think it says a lot about the state of the country that it takes a foreign bank to rescue us.

We truely are a banana republic.

BendiBus

mrsdewinter wrote: »

After all, we can only recoup what we pay for the land & empty apartment blocks if prices rise to 2005-2006 levels

Plus any revenue stream generated from actual loan repayments. Less the discount NAMA gets on the loan.

So:

A developer borrows 100 million.
NAMA buys debt for 70 million.
Developer repays 20 million before defaulting.
Then NAMA only needs to raise 50 million from the sale of the asset to break even.
i.e half the peak price

I've no idea what the actual percentages will work out at, but is the logic of the above correct?

Imposter

BendiBus wrote: »

Plus any revenue stream generated from actual loan repayments. Less the discount NAMA gets on the loan.

So:

A developer borrows 100 million.
NAMA buys debt for 70 million.
Developer repays 20 million before defaulting.
Then NAMA only needs to raise 50 million from the sale of the asset to break even.
i.e half the peak price

I've no idea what the actual percentages will work out at, but is the logic of the above correct?

Your maths is right but more likely what will happen is the following:
A developer borrows 100 million.
NAMA buys debt for 70 million => bank loses 30m
Developer repays ~0m before defaulting => realistically they will probably default as soon as Nama are in control of the loan
Then NAMA needs to raise 70 million => not likely for a long long time

Then you have the risk that the bank needs to be able to handle the 30m loss too or they'll want more money.

AARRRGH

Imposter wrote: »

Developer repays ~0m before defaulting => realistically they will probably default as soon as Nama are in control of the loan

I agree. It's crazy.

BendiBus

Imposter wrote: »

realistically they will probably default as soon as Nama are in control of the loan

This is the bit I have difficulty accepting. Is it based on anything other than conspiracy theory? It sounds like cynicism & bitterness rather than a reasoned conclusion.

The_Morrigan

Don't resurrect zombie threads!