Commerical court seeing declines in property values of 70-80% on daily basis

Sand

Probably not news as such, but perhaps useful in properly evaluating the NAMA business plan which only assumes a 20% default rate.

Justice Peter Kelly, of the Commerical Court has commented that he is seeing cases on a daily basis where commerical property has fallen in value by 80%

The judge said property values appeared 70-80 per cent less than they were.

“I see that every day of the week here,” he said.

In a market where commerical property value ( against which the loans were taken out) is declining by 80% and only 40% of loans are actually performing it demonstrates that any talk of NAMA being profitable or even the loss being manageable or minimal is deluded. Why should the Judges opinion be given more weight than the experts behind the NAMA business plan?

- The Judge is looking at the reality of the commerical property sector on a daily basis: he has no reason to lie
- The experts behind NAMA freely admit they havent examined the loans and as such their predictions are just wild guesstimates based on little more than hope.

From the same article:

Counsel said a defence may arise in that the property was “greatly overvalued” and the loan monies were not used for the purpose stated in the loan documents.

He said the loan monies were advanced to refinance an existing loan with ACC and to repay directors’ loans, but some monies went to buy a director’s shares and the bank was aware of that.

This is hinting at the sea of chaos that is underlying the so called NAMA "assets", especially given that a year after the bank crisis, Lenihan still has no idea what he is buying on behalf of the taxpayer.

Sea Sharp

Brian Lenihan you incompetent fool, you are a danger to this country.

kaiser sauze

This is not news, except in the Office of the Minister for Finance & Cabinet.

sceptre

It's not news but information is good, discussions obviously so and all that.

Definitely not news as when everyone's favourite company, Zoe investments, made their initial application to the High Court, they included loans of 1.2 billion and a likely deficit on liquidation of 900 million. In that case, you're talking a market value at 25% of loan value, a drop of 75% - completely in line with what Sand's referenced above.

And rather than go through the rest of his post, the logic is sound. This has the potential to be a very very big debt for a very very long time given what the market seems to be telling us at the moment. If anyone thinks they can steer the market, they don't deserve to run a corner shop, let alone be, for example, Minister for Finance. Even George Soros on his big day out back in 92 wasn't steering the market, or at least not for very long (blips don't count, even if they're profitable).

Am I worried? I'm 34, damned right I'm worried. How did those PMPA and ICI things[1] go again with the 2% insurance levy to pay for the cockups that you'd think would be gone by now...?


[1] If you feel like laughing at the same joke more than once, read this next with the current problems in mind. You'll laugh! You'll cry! You'll wonder if your parents already saw this movie!

lmimmfn

dont see any shock factor here, in an economy where there wont be a recovery of 2007 levels until 2020+, how the feck is property or demand for property going to be worth anything? Nama will lose money and a lot of money.

Besides theres that new company( run by the head of the scottish bank if i remember correctly ) based on a UK hedge fund gonna snap all the good properties from Nama at knock down prices and leaving all the $hit for us to pay for.

lmimmfn

lmimmfn wrote: »

Besides theres that new company( run by the head of the scottish bank if i remember correctly ) based on a UK hedge fund gonna snap all the good properties from Nama at knock down prices and leaving all the $hit for us to pay for.

More foreigners stealin' our natural resources? FFS.
Oh wait wrong thread...


It really is depressing, isn't it? It just gets me down how little Irish people in general seem to care about politics at a national level.
"Sure why are ye botherin', you're not gonna change anything"

In all probability NAMA will go through, cuts wont be adequate, and we're all quite literally fúcked. Most of our tax intake will go on servicing our massive debts. Does anyone care? Sure when I give them the facts and figures on NAMA they tut and give out about FF, but in reality they'd rather not bother to be seen to be doing anything about it..

ifconfig

lmimmfn wrote: »

dont see any shock factor here, in an economy where there wont be a recovery of 2007 levels until 2020+, how the feck is property or demand for property going to be worth anything? Nama will lose money and a lot of money.

Besides theres that new company( run by the head of the scottish bank if i remember correctly ) based on a UK hedge fund gonna snap all the good properties from Nama at knock down prices and leaving all the $hit for us to pay for.

I don't think that ARC or whatever is going for NAMA bound loans.
It is cherrypicking distressed loans at bargain prices (as I understand it) from the foreign banks which seem intent on winding down the scale of their
operations in Ireland. Those banks aren't part of NAMA.
There might be a process for them to come on board but it would look like this foreign owned hedge fund will be the more likely transfer vehicle for distressed loans for those institutions.

ifconfig

Sand,

I totally agree on all you have said in your post on the reality of market values of property and the lie that is the currently proposed NAMA.

If I recall your political leanings are much more heavily left wing than mine but leaving that aside - your opinions on the NAMA proposal are absolutely in sync with mine. It is such a great shame that the public at large seem to be too indifferent to NAMA. A lot has to do with the FF/DoF spin machine which
has been now shown to be hyper-spin since the draft business plan tries to forecast a profit for NAMA at the end of its lifecycle!

Sand

@ifconfig

If I recall your political leanings are much more heavily left wing than mine but leaving that aside

Yeah, it is true to say Ive been a bit of a ****ing communist all my life. By the way, on behalf of all the communists, socialists and various other ism's that derive from socialism ( Yes, I have to admit, on behalf of all left wingers than the Nazis were a left wing movement) that we socialists were wrong and those who talked about free markets and individual freedoms were right. I hope that you can forgive all the left wingers for being so badly, utterly wrong on just about everything. I think that all the left wingers on boards.ie will allow me to speak on their behalf in this matter.

BTW, if you consider me to much more heavily left wing than you are, you are probably so far to the right that youre a communist. Anyhow...

Id agree though with your essential point - most Irish people dont grasp what theyre being shackled with. Theyre more interested in "Strictly Come Dancing" or some ****. Previously Id argue that people get what they deserve, but unfortunately, the rest also get what they dont deserve too.