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NAMA - figures are not adding up
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jmayo wrote:Anyway I have better things to do than argue with people that appear to bed fellows of such notables as frank fahey and his ilk.
I do hope that as well as them being better things for you to do, you also do them better.
I have no particular axe to grind with respect to NAMA. I've made an effort to find out what it is supposed to be, I can see that there are lots of potential problems with it, but I'm not interested in anyone whose response to NAMA is to rant wildly, and whose response to disagreement is to claim his interlocutor is some kind of shill for vested interests or a naive and deluded swallower of propaganda. If it's obvious why NAMA is a "disaster", then you should be able to explain it without unfocused ranting about the iniquities of government - but it rather appears you can't.
cordially,
Scofflaw0 -
The bank made 3.5 billion profit from its day to day operations last year.........surely that kind of profit over a few years is enough to cover the discounted loans?
I'm not too sure as to why NAMA taking the loans (most underperforming) will leave the banks with a lack of capital to be honest. If anything they should have a higher deposits/savings to loan ratio to work with once NAMA has taken over these loans.
Woodseb explained it better than I could.
It probably would but they are going to have to declare more bad debts, even with NAMA. The hope would be that when the bad debts and bad loans are dealt with, normal profits should resume.Mad Men's Don Draper : What you call love was invented by guys like me, to sell nylons.
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It is interesting that some defenders of NAMA are envisioning a high rate of default among developers for only through default will NAMA come to possess large numbers of properties which they will then attempt to hold back from the market. If developers were to pay off their loans then those properties would end up on the open market and NAMA would not be able to control supply.i don't think 10% to say 250k is unreasonable due to normal inflation, an expected pick up in economic growth, a young population, people having short memories about property bubbles and NAMA controlling supply (whether you like it or not)
I would tend to agree the scenario that large numbers of developers will default. I would also agree that NAMA will try to prop up the market by holding back supply. I think the CEO of NAMA said recently that while in England NAMA would be a price taker, in Ireland it would be a price maker. So this would support that view.
Where I would disagree is that this plan is going to work in terms of making a return for NAMA. If NAMA comes into possession of large amounts of properties then of course they are going to want to hold them back to avoid realising a loss. However the market will know that large amounts of properties are being held and will have to be sold at some stage. This large overhang of properties will keep prices down.
The other option would be to destroy the properties. But this means that NAMA loses the return of the properties.
I have no problem with the prices of properties being low. It is what the country needs. The problem is that we're necessarily putting public money into taking a position in the market that will ultimately fail. This money could be better spent elsewhere.0 -
In short, I think that at this stage, irrational despair has replaced irrational exuberance. The same mistake during the boom of extrapolating straightline trends on all statistics is being made now with people assuming the whole country is going back to the 80s.
I disagree.
The despair people are feeling now is based on reality.
While it was obvious to some, most people are now only realising the "boom" was false; we thought we were generating wealth when in fact we were just swapping credit with each other.
Once you accept this, you realise we would have been better off had the "Celtic Tiger" never happened, which means we would have been better of had our 80's style economy continued. You might think this sounds mad, but at least back then you only needed one income to buy a home and most people had little to no credit card debt/car loans/holiday loans. Our national debt was also a lot smaller too.
We are going through a correction where reality is being restored.- People who are highly skilled and experienced and who work in stable industries (e.g. IT) will do just fine.
- People who don't really have any skills will struggle. This means the school leaver who went straight into the property industry will - and some would argue rightly so - find it difficult to get a job.
- Graduates will probably have to emigrate.
This is the way Ireland has always been and is the way it is going to be.
And then we have to talk about our debt problem - both personal debt and national debt. This is currently crippling the country, and will continue to do so. Anyone who thinks NAMA will cure our problems is living in cuckoo land. Yes, the banks will eventually start lending to those in highly paid, stable jobs, but that doesn't change the fact that many homeowners are sitting on top of a lot of negative equity, and many many people have a lot of credit card debt and loans they cannot afford. Plus a large percentage of our tax money will now go towards paying the interest on our national debt. And I would make the prediction that we will make little to no dent in our national debt for a long long time.
So yes, if you're someone like me who works in the IT industry and has a stable job, everything is peachy. (Well, financially everything is good, but it is maddening living in a banana republic like Ireland). But if you're unskilled, ex-construction or a graduate, you are ****ed.0 -
I do hope that as well as them being better things for you to do, you also do them better.
I have no particular axe to grind with respect to NAMA. I've made an effort to find out what it is supposed to be, I can see that there are lots of potential problems with it, but I'm not interested in anyone whose response to NAMA is to rant wildly, and whose response to disagreement is to claim his interlocutor is some kind of shill for vested interests or a naive and deluded swallower of propaganda. If it's obvious why NAMA is a "disaster", then you should be able to explain it without unfocused ranting about the iniquities of government - but it rather appears you can't.
cordially,
Scofflaw
Its a disaster because public healthcare is a disaster, education is a disaster getting a drivers licence is a disaster. Anything and everything a Governement has and will ever touch , has or will turn to ****.:D0 -
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I disagree.
The despair people are feeling now is based on reality.
While it was obvious to some, most people are now only realising the "boom" was false; we thought we were generating wealth when in fact we were just swapping credit with each other.
Once you accept this, you realise we would have been better off had the "Celtic Tiger" never happened, which means we would have been better of had our 80's style economy continued. You might think this sounds mad, but at least back then you only needed one income to buy a home and most people had little to no credit card debt/car loans/holiday loans. Our national debt was also a lot smaller too.
We are going through a correction where reality is being restored.- People who are highly skilled and experienced and who work in stable industries (e.g. IT) will do just fine.
- People who don't really have any skills will struggle. This means the school leaver who went straight into the property industry will - and some would argue rightly so - find it difficult to get a job.
- Graduates will probably have to emigrate.
This is the way Ireland has always been and is the way it is going to be.
And then we have to talk about our debt problem - both personal debt and national debt. This is currently crippling the country, and will continue to do so. Anyone who thinks NAMA will cure our problems is living in cuckoo land. Yes, the banks will eventually start lending to those in highly paid, stable jobs, but that doesn't change the fact that many homeowners are sitting on top of a lot of negative equity, and many many people have a lot of credit card debt and loans they cannot afford. Plus a large percentage of our tax money will now go towards paying the interest on our national debt. And I would make the prediction that we will make little to no dent in our national debt for a long long time.
So yes, if you're someone like me who works in the IT industry and has a stable job, everything is peachy. (Well, financially everything is good, but it is maddening living in a banana republic like Ireland). But if you're unskilled, ex-construction or a graduate, you are ****ed.
That's not quite right. We had genuine economic growth through the late Nineties - the bubble economy started for us, as it did for most economies, when Greenspan fended off a recession in 2001 by inflating a bubble in the US. The only uniquely Irish feature of our bubble was the really insane concentration on property.
I don't think even NAMA's most fervent proponents (and I don't count myself amongst them by any stretch) think that it fixes the Irish economy. It's a patch over one of the many leaks, no more. It won't make the banking system healthy, although it should make it healthier. Similarly, it isn't our biggest worry - I would have said the continuing government deficit is more of a concern.
cordially,
Scofflaw0 -
An interesting contribution but be very aware of what you're saying - you're not talking about 10% above whatever the bottom of the market turns out to be, you're talking about 10% above the mid-2009 level, no matter how low the bottom turns out to be.i don't think 10% to say 250k is unreasonable due to normal inflation, an expected pick up in economic growth, a young population, people having short memories about property bubbles and NAMA controlling supply (whether you like it or not)
10 years is a long time in the economic life of a country (and nama can be extended, it doesn't have to liquidate everything in March 2020), as we have seen before things can change quickly and i realise it can take the other route too
As per earlier in the thread, it is also useful to think about (i) the possible impact of outward migration over the next five years, and (ii) the impact of the oversupply of all types of property on the market over the next five years.0 -
Is that just an averaged version of SkepticOne's graph as in the link already posted below?ronanlyons wrote: »The graph below shows how house prices (as measured by the Dept of the Environment, which gets its figures from lending institutions, I believe) have changed in real terms from the seventies. (I've averaged over new and 2nd hand, incidentally.)
You'll notice that in real terms, house prices were lower in 1995 than they were in 1979. The suggests that even the growth experienced in the Irish economy over that 16 year period was offset by enough construction of new homes to keep prices level.
1. adjust those figures for inflation which was very high then and remember that that 6% will have to be 3 times above ECBs target of 2%, and right now is negative altogether :eek:, see @SkepticOne's graph here >
One minor point about these graphs;
They don't take into account the changing nature of the asset in question. A 1970 type house could probably be built now for half the cost of building a house to the current standard specification. Similarly, many 1970's houses will have expensive upgrades over time.0 -
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If you were to try to build a modern house in the 1970s, it probably would cost twice as much. However changing manufacture and supply chains factor this in, bringing the cost of materials and supply of skills into line with demand and levelling it out. Or they should do in the absence of other factors, such as loose lending regulations.They don't take into account the changing nature of the asset in question. A 1970 type house could probably be built now for half the cost of building a house to the current standard specification. Similarly, many 1970's houses will have expensive upgrades over time.0 -
fair enough dude, i hope morgan kelly keeps you warm at night;)
He might not keep me warm at night, he might not swing a compensation scheme in my favour, he might not organise my drilling rights, he might not try and con FTBs back into the market with talk of an imminent upswing, but at least he would be a man of principles, common sense and ethics I could admire.
Give me one Morgan Kelly for a hundre frank faheys anyday sir.I do hope that as well as them being better things for you to do, you also do them better.
Tut tut, what about forum rules about attack the post and not the poster ?
Or are the rules different for mods ?
BTW have I ever insinuated that you couldn't do your job ?I am not allowed discuss …
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Join Date:Posts: 13651
No, the 6.5% is if we take a less than 10 year period, and assume further 5% annual falls until then. If we assumed a ten year period, then all that's needed is 2.5%. I'm not sure why the interest on the loans is relevant to a rise in the property asset value, though.
When speaking about the cost of NAMA, interest is the most obvious cost. If NAMA bought 54bn worth of loans, kept them for 10 years and sold them (or the underlying assets) for exactly 54bn, then it would still cost NAMA bond interest plus overheads minus income from the few performing loans.Loans that already can't be serviced aren't being taken into NAMA, though.
The government have said that 40% of the loans are currently servicing interest. Not interest and principal, just interest. This may include interest roll ups, high rents paid by state agencies and various other dodgy items. Worse, when they are transferred to NAMA this % might drop dramatically.Various reasons. First, because it has the potential to cause a complete collapse in the banking system.
NAMA could cause Ireland to default.Second, because recapitalising the banks to that extent would involve nationalising them,
Since NAMA will be giving them the money for free, there would be no problem with the government giving them recap money for free avoiding the ills of nationalisation (if it is indeed an ill).Third, the NAMA loans aren't good or bad - they are uncertain.
Bad loans - loans that have no hope of being repaid - aren't NAMA business. They're bank losses, pure and simple.
LOL.Good loans aren't NAMA business either - they're bank assets, pure and simple. NAMA is taking the loans that introduce uncertainty into the banks' balance sheets, because nobody knows what they're really worth, or the underlying assets.
The banks know pretty well what they are worth. As does the commerical court. It is the Liam Carroll type loan that will go into NAMA, not the otherwise good investments that suffer from an undeserving lack of confidence.Really? What has been deliberately obfuscated by the government, as opposed to misinterpreted by various media commentators - or obfuscated by people with particular agendas?
Genuine question!
The specific valuations and persons to whom those loans were made. The specific collateral underlying those loans. The efforts that will be made to recoup the loans. The "Long Term Economic Value" and how it will be calculated. etc etc. If you have time I've set out my views on the lack of transparency hereBecause it would be pretty stupid to call in loans that might be paid back over time, but cannot be paid back now if called in. That's like shooting the patient because you're not sure whether his prognosis is good or bad.
No, in the fact specific context it is more like prescribing bed rest to a terminal patient and praying they get better.It removes the uncertainty. Removing the uncertainty allows inter-bank lending to move again. That won't start the banks lending again, but it is certainly a necessary precondition of them doing so. That's the point, and that's exactly why the government is taking on risk - because it's necessary to do so.
I disagree. Call me a free market capitalist or whatever, but the one and only precondition of increasing lending is that the risk/reward ratio becomes attractive again. A low risk high interest investment will have no problem borrowing money. A lot of these "otherwise good businesses starved for credit" are a great headline, but if your business needs a constant overdraft then there is a good chance it is unsustainable.I'm just not seeing the NAMA panic issue, so I'm asking what the big problem is supposed to be.
Irish banking system is insolvent. Two choices - let fail, move on, lending resumes when profitable to do so. Other choice - bail out constantly, generate more uncertainty due to schemes lacking in transparency, risk making the Irish state insolvent instead of the banks.I don't see how we'll be "paying for NAMA for generations", I don't see how it's a "bank and developer bailout". As far as I can see its been structured to take toxic debt out of the Irish banking system with as little risk, and as little up-front cost, as possible.
You've said it yourself there. Littel upfront cost but it's a big buy now pay later. You say it's structured to take toxic debt out of the Irish banking system yet you do not say that this is a bailout for the banks. I'm sorry but that just doesn't make sense. It's like saying I don't have to pay for a newspaper, I just give them €2. As for the developer bailout, I can't prove to you whether it is or is not because it hasn't happend yet. However, it is my view based on the way in which NAMA is to be implemented, that hiding the losses of well connected developers is priority numero uno.Even the money being used to buy the loans is being loaned to us by the ECB
No. It's not. It was suggested that the banks might trade NAMA bonds for ECB funds, but Trichet has indicated that all extraordinary assistance will be withdrawn in October. So no ECB money for NAMA.- and while that needs to be paid back, it's nowhere near as costly as bailing the banks out to the same degree with government-funded debt, quite aside from what that would do to our debt-GDP ratio.
Eh? The government pays a coupon of c. 4% (if memory serves) to the banks on all NAMA bonds.0 -
johnnyskeleton wrote: »When speaking about the cost of NAMA, interest is the most obvious cost. If NAMA bought 54bn worth of loans, kept them for 10 years and sold them (or the underlying assets) for exactly 54bn, then it would still cost NAMA bond interest plus overheads minus income from the few performing loans.
The government have said that 40% of the loans are currently servicing interest. Not interest and principal, just interest. This may include interest roll ups, high rents paid by state agencies and various other dodgy items. Worse, when they are transferred to NAMA this % might drop dramatically.
NAMA could cause Ireland to default.
Since NAMA will be giving them the money for free, there would be no problem with the government giving them recap money for free avoiding the ills of nationalisation (if it is indeed an ill).
LOL.
The banks know pretty well what they are worth. As does the commerical court. It is the Liam Carroll type loan that will go into NAMA, not the otherwise good investments that suffer from an undeserving lack of confidence.
The specific valuations and persons to whom those loans were made. The specific collateral underlying those loans. The efforts that will be made to recoup the loans. The "Long Term Economic Value" and how it will be calculated. etc etc. If you have time I've set out my views on the lack of transparency here
No, in the fact specific context it is more like prescribing bed rest to a terminal patient and praying they get better.
I disagree. Call me a free market capitalist or whatever, but the one and only precondition of increasing lending is that the risk/reward ratio becomes attractive again. A low risk high interest investment will have no problem borrowing money. A lot of these "otherwise good businesses starved for credit" are a great headline, but if your business needs a constant overdraft then there is a good chance it is unsustainable.
Irish banking system is insolvent. Two choices - let fail, move on, lending resumes when profitable to do so. Other choice - bail out constantly, generate more uncertainty due to schemes lacking in transparency, risk making the Irish state insolvent instead of the banks.
You've said it yourself there. Littel upfront cost but it's a big buy now pay later. You say it's structured to take toxic debt out of the Irish banking system yet you do not say that this is a bailout for the banks. I'm sorry but that just doesn't make sense. It's like saying I don't have to pay for a newspaper, I just give them €2. As for the developer bailout, I can't prove to you whether it is or is not because it hasn't happend yet. However, it is my view based on the way in which NAMA is to be implemented, that hiding the losses of well connected developers is priority numero uno.
No. It's not. It was suggested that the banks might trade NAMA bonds for ECB funds, but Trichet has indicated that all extraordinary assistance will be withdrawn in October. So no ECB money for NAMA.
Eh? The government pays a coupon of c. 4% (if memory serves) to the banks on all NAMA bonds.
Good point, that...0 -
@ScofflawNo, I'm not going to simply accept that...
Yes Scoff, I am getting that, despite your claims to be approaching this with an open mind.
I present facts, you just point blank to refuse to accept them. It bores me. When you can explain why you wouldnt have to record the probable, estimatable tax clawback on the banks balance sheet over the next 10 years, completely invalidating the concept of NAMA returing the banks to solvency ( I.E. Assets>Liabilites....including tax clawbacks) then let me know.
Maybe you could explain it to the shareholders who will suddenly have a predictable, estimated cost suddenly imposed on them, showing up that their investment has actually been wilfully overvalued over the past 10 years. Who knows, it might not even be fraud given Irish accountancy standards.I'm sorry, I can't take seriously an 'argument' that relies on "Fianna Fáil, I hate'em, they're all crooks" as a real premise.
Well I guess you can only take seriously arguments that rely on accepting Fianna Fail are stern statesmen, stoic heroes bravely grappling with the issues with the day despite the hissing fury of the uncomprehending, bleating masses who dont deserve the brilliant leadership of Cowen and Co.
Bias is bias whatever way it is. Notice my argument doesnt rely on "Fianna Fail, I hate'em, they're all crooks". Thats merely you projecting a strawman because youre uncomfortable with actually dealing with what I did say. Again, it bores me.0 -
They have been bought time and been given credit which they could not have obtained according to free market principles. Ergo,a bailout.johnnyskeleton wrote: »As for the developer bailout, I can't prove to you whether it is or is not because it hasn't happend yet.
What if instead of buying just the debts, we had bought the banks for their actual market capitalisation of a few billion euro. Could we still have purchased the toxic assets from the nationalised banks using government bonds in order to clean up our new banks?
If so,we would then get some people from a successful bank like Rabobank to manage the newly rebranded banks.The new banks tap into the ECB using the bonds as collateral and immediately start lending out to any viable businesses out there, because that after all, is what banks do. And of course the taxpayer would benefit from any upswing in the property market.0 -
ECB President Jean-Claude Trichet told Finance Minister Brian Lenihan: 'Save your banks'Amhran Nua wrote: »Hold on a minute there, when did this happen exactly? I don't recall any EU missives about putting the national pension fund into Anglo.
We are also in ongoing detailed consultation with the European Commission and have sought the opinion of the European Central Bank.
European Commission approves the establishment of NAMA
IMF to recommend flexibility in Nama for further soured loans
IMF/Commission/ECB
Yeah, that bit wasn't true. That's like when you tell a junkie that they give you loads of free heroin in rehab. The last thing Ireland needs is looser credit. Easy credit was the problem not the solution.Amhran Nua wrote: »According to who? Every pro-NAMA advocate I've heard talking about it has said that its purpose is to get credit moving again. It won't.
We had 8 billion of new mortgage lending last year and have maintained our total amount of outstanding mortgages at 148bn. If anything, I'd say credit is still too easy.
NAMA was formed because the toxic assets on the banks balance sheets were unquantified and leading those who fund the banks to stop lending for fear of default. This could lead to a run on the banks and a Northern Rock situation where the state would be liable for everything the banks owed in deposits, bonds, you name it. 440bn.
By shifting the development loans to NAMA, the banks' balance sheets are now more credible and the losses have been crystallised. (pessimist theory is that a 2nd wave of asset decay will now happen with mortgages and cc debt requiring a 2nd NAMA)
As Patrick Honahan said, 'NAMA follows from the guarantee as night follows day'.0 -
@Scofflaw
Yes Scoff, I am getting that, despite your claims to be approaching this with an open mind.
I present facts, you just point blank to refuse to accept them. It bores me. When you can explain why you wouldnt have to record the probable, estimatable tax clawback on the banks balance sheet over the next 10 years, completely invalidating the concept of NAMA returing the banks to solvency ( I.E. Assets>Liabilites....including tax clawbacks) then let me know.
Maybe you could explain it to the shareholders who will suddenly have a predictable, estimated cost suddenly imposed on them, showing up that their investment has actually been wilfully overvalued over the past 10 years. Who knows, it might not even be fraud given Irish accountancy standards.
As far as I'm aware, the reason the tax clawback isn't factored into the equation is precisely because it causes the whole thing to stop fulfilling its main purpose. NAMA would no longer be an "off-balance sheet vehicle", because the possible costs would be factored into the banks' balance sheets.Well I guess you can only take seriously arguments that rely on accepting Fianna Fail are stern statesmen, stoic heroes bravely grappling with the issues with the day despite the hissing fury of the uncomprehending, bleating masses who dont deserve the brilliant leadership of Cowen and Co.
Bias is bias whatever way it is. Notice my argument doesnt rely on "Fianna Fail, I hate'em, they're all crooks". Thats merely you projecting a strawman because youre uncomfortable with actually dealing with what I did say. Again, it bores me.
If my arguing pro-NAMA will generate this level of irritation, I should really leave it. Neither I nor anyone else on this forum is going to change NAMA, so the stakes, as far as we are concerned, are small enough to activate Kissinger's dictum. I'm not in fact pro-NAMA at all. I'm opposed, as usual, to mindless knockery, and most of the attacks on NAMA have been exactly that. That doesn't mean that all criticism of NAMA is mindless knockery, nor does it mean your personal views on NAMA are mindless knockery either.
Again, though, I can't help but note that while you say 'my argument doesnt rely on "Fianna Fail, I hate'em, they're all crooks"', it does, somehow involve this: "I guess you can only take seriously arguments that rely on accepting Fianna Fail are stern statesmen, stoic heroes bravely grappling with the issues with the day despite the hissing fury of the uncomprehending, bleating masses who dont deserve the brilliant leadership of Cowen and Co". There isn't really a difference there. I'm no Fianna Fáiler, and an argument that relies on that sort of ad hominem isn't worth making.
Possibly I am pig-headedly arguing a corner simply because I've put myself in it, of course. However, what I've seen so far is that there are identifiable issues with NAMA which make it a lot less likely to be profitable than the government likes to pretend, but that painting it as anything less than the greatest crime in Irish history reduces many people to a spitting fury that is as pointless as it is incoherent and apparently irrational. I can't help wondering what the point of the sound and fury is supposed to be, and how it is supposed to contribute to the country.
cordially nonetheless,
Scofflaw0 -
They have been bought time and been given credit which they could not have obtained according to free market principles. Ergo,a bailout.As for the developer bailout, I can't prove to you whether it is or is not because it hasn't happend yet.
If the banks operated according to free-market principles, that is. However, they don't, and I strongly doubt the banks would have called in those loans, because they'd have taken a good deal heavier losses on them than under NAMA. What would probably have happened instead would have been the Japanese zombie loan "solution", where the banks would have kept the developers propped up with credit in order to avoid crystallising their losses. I'd say NAMA is probably somewhat better than that, since the level of scrutiny provided by the public and the EU is likely to prevent that kind of circular credit facility.What if instead of buying just the debts, we had bought the banks for their actual market capitalisation of a few billion euro. Could we still have purchased the toxic assets from the nationalised banks using government bonds in order to clean up our new banks?
If so,we would then get some people from a successful bank like Rabobank to manage the newly rebranded banks.The new banks tap into the ECB using the bonds as collateral and immediately start lending out to any viable businesses out there, because that after all, is what banks do. And of course the taxpayer would benefit from any upswing in the property market.
The question of whether nationalisation - even temporary - would be a good thing is really a whole separate argument. When contrasted with NAMA, it's too easy for those who oppose the NAMA solution to ignore problems with nationalisation - the biggest one of which is the biggest problem everyone seems to have with NAMA, which is the current government.
cordially,
Scofflaw0 -
... If my arguing pro-NAMA will generate this level of irritation, I should really leave it.
If you decide to quit the discussion, please don't let that be the reason. Much (not all) of the anti-NAMA constituency comprises people who make Private Fraser seem like an optimist. Those whose only message is black doom should be irritated.
I think, Scofflaw, that your read on NAMA is reasonably fair, and that your expectations or estimates of how it might play out are might err a bit on the optimistic side -- I suspect that you might have been driven that way in reaction to some of your interlocutors....I'm opposed, as usual, to mindless knockery, and most of the attacks on NAMA have been exactly that.
That is a good motive for persisting.... an argument that relies on that sort of ad hominem isn't worth making.
It's a near-universal truth that an argument that relies on any sort of ad hominem content isn't worth making, the exceptions being generally outside the scope of this forum. But let's be realistic about human nature: many people are angry because our economy is in a mess, and often their personal financial circumstances are messed up along with it. There is a therapeutic value in ranting here, and we should be able to accommodate some of that so long as people generally understand the difference between an argument and a rant.Possibly I am pig-headedly arguing a corner simply because I've put myself in it, of course...
Putting a different point of view in a discussion can be viewed as a public service. If all the space is left occupied by the proponents of one point of view, then this forum is less valuable than it otherwise might be.
I applaud your efforts to put a temperate point of view into the discussion.0 -
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P. Breathnach wrote: »
Putting a different point of view in a discussion can be viewed as a public service. If all the space is left occupied by the proponents of one point of view, then this forum is less valuable than it otherwise might be.
I applaud your efforts to put a temperate point of view into the discussion.
Indeed, otherwise it just becomes another popular site that has had to stop new members joining.
I've no problem with people ranting at FF etc. There is a time and a place for it though, AH being perfect territory.
I don't see many NAMA fans here, more people who haven't been convinced by an alternative on threads like this. Posters seem to know better than NAMA, they just don't seem to be able to explain why their alternative is better.
Personally, I'd have my suspicion that if they went the Nationalisation route first, people would be attacking them. If they went "the let them fail" approach, they would be attacked, barring a few "free market" advocates.Mad Men's Don Draper : What you call love was invented by guys like me, to sell nylons.
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As far as I'm aware, the reason the tax clawback isn't factored into the equation is precisely because it causes the whole thing to stop fulfilling its main purpose. NAMA would no longer be an "off-balance sheet vehicle", because the possible costs would be factored into the banks' balance sheets.
Which is precisely why any clawback is not credible, because if it was credible, the banks would have to record it against their liabilities. If their auditors considered it credible, then they would qualify the accounts which would cause a crisis in the bank.
If the banks are not recording it against the balance sheet, guess what that means? Any clawback is just another bit of Frank Fahey/Willie O Dea deception for the gullible to cling onto. Much like your previous belief that the ECB was going to fund NAMA.If my arguing pro-NAMA will generate this level of irritation, I should really leave it.
If you are incapable of arguing for NAMA on any basis other than hope and denial of any point you dont like the implications of, then yes, you should really leave it.Again, though, I can't help but note that while you say 'my argument doesnt rely on "Fianna Fail, I hate'em, they're all crooks"', it does, somehow involve this: "I guess you can only take seriously arguments that rely on accepting Fianna Fail are stern statesmen, stoic heroes bravely grappling with the issues with the day despite the hissing fury of the uncomprehending, bleating masses who dont deserve the brilliant leadership of Cowen and Co". There isn't really a difference there. I'm no Fianna Fáiler, and an argument that relies on that sort of ad hominem isn't worth making.
Amazingly, that still isnt my argument and it isnt what my argument relies on. My argument isnt what you wish I said, its what I said. Sorry for the ad hominem, you must have been engaged in some higher form of debate when you were putting words in my mouth...Possibly I am pig-headedly arguing a corner simply because I've put myself in it, of course.
Possibly. You are certainly not arguing it on the points of NAMA itself. Merely some objection to peoples refusal to pull on the green jersey, "shure we are where we are!" and trusting our betters to lead us out of this mess on the NAMA bandwagon. I mean, how bad can NAMA be? No, dont bother me with facts!
While you denounce the imagined poor reasoning of such opposition, your own inability or unwillingness to debate the points on anything other than a "No, I amnt going to accept that" is perhaps more telling.
Let alone the series of strawmen and poorly disguised attacks on posters as opposed to posts...0 -
I've no problem with people ranting at FF etc. There is a time and a place for it though, AH being perfect territory.
And therein lies the problem. Many, many objective comments (and maybe slightly coloured, but no less valid, comments) about FF, about the mess they've landed us in, about their penchant to circle the wagons on the most unacceptable actions, about their arrogance and "do no wrong" opinion of themselves, etc, are incorrectly dismissed as "anti-FF" and "ranting".
The fact is that NAMA might have been a necessity following the bank guarantee, but if the banks hadn't been guaranteed by FF then NAMA would NOT be required.
In addition, the lies about the profitability, the lies about the credit flowing, the lies about the dividends, the phrasing of an overpayment being a "discount" and the sudden increase in the wages of those running it are all objectionable and should not happen; pointing this out is perfectly acceptable.
We need the truth and the facts about NAMA, not spin and bull**** and vested interests.
And we certainly haven't gotten the truth from FF and their buddies.0 -
Alan Ahearne said that, not Trichet.
On shoring up the Irish economic system, which doesn't mean saving the existing banks.
Allowing NAMA to go ahead isn't ordering the government to save the banks, the Commission took what was given and weighed it against state aid rules, which is a different kettle of fish entirely: The Commission is satisfied that the scheme is in line with its guidelines on impaired asset relief for banks that allow state aid to remedy a serious disturbance in a Member State's economy.
Again thats not the IMF giving orders to save the banks, its recommending adjustments to the structure. More from the IMF:
There are a long list of people who have pointed out that NAMA is a bad idea, not least of whom is Economics Nobel prize winner Stiglitz who went so far as to call it "criminal" in that its proponents should be locked away for the good of society.IMF warned Nama would not lead to significant bank lending
THE INTERNATIONAL Monetary Fund (IMF) told Minister for Finance Brian Lenihan last April that the National Asset Management Agency (Nama) would not lead to a significant increase in lending by the banks.
The comments, which appear in internal Department of Finance documents released to The Irish Times under the Freedom of Information Act, were made by senior IMF official Steven Seelig who will join the board of Nama in May.
Minutes of a private meeting at the department between Mr Lenihan and IMF officials on April 29th last state that the “IMF (Mr Seelig) do not believe that Nama will result in significant increase in bank lending in Ireland”.
The meetings were held for the purposes of the IMF compiling its annual economic assessment on Ireland in the so-called Article IV report published last June.
The Government has maintained that Nama’s purchase of bad loans from the banks with State bonds would increase the flow of credit in the economy since the plan was unveiled last April.
Speaking at the publication of the Nama legislation last September, Mr Lenihan said Nama would “strengthen and improve” the funding positions of the banks “so that they can lend to viable businesses and households”. Taoiseach Brian Cowen had said the Government’s objective in restructuring the banks was to generate “more access to credit for Irish business at this critical time”.
The IMF endorsed the Government’s plan to recapitalise the banks and to clean up their balance sheets by establishing Nama.
In another internal document, the department repeats the IMF’s belief that Nama will not lead to significant lending, citing references to meetings with Ulster Bank and AIB for this conclusion.
Which is why the guarantee should have been (and still can be) renegotiated with senior bondholders in a debt for equity deal after temporary nationalisation, which is the normal course of events in situations such as these.As Patrick Honahan said, 'NAMA follows from the guarantee as night follows day'.0 -
Liam Byrne wrote: »And therein lies the problem. Many, many objective comments (and maybe slightly coloured, but no less valid, comments) about FF, about the mess they've landed us in, about their penchant to circle the wagons on the most unacceptable actions, about their arrogance and "do no wrong" opinion of themselves, etc, are incorrectly dismissed as "anti-FF" and "ranting".
I don't have a problem with anti-FF ranting, except where it's passed off as political discussion.
We know they're corrupt in the widest possible sense - I've pointed out elsewhere that they're essentially just a factional oligarchy. We know that they're incompetent - any time one needs reminding of that a quick look at Mary Coughlan suffices. We know that they've presided over a bubble economy which was guaranteed to lead to a crash that they didn't just ignore, but exacerbated and denied.
All of which is...well, is it relevant to NAMA? Yes, yes, I can hear the shouts of "WTF!?", but stop and think a minute. NAMA is a mechanism so large that it can't happen in a back room. It's in the light of day to a degree which simply has never been the case for the majority of 'arrangements' that Fianna Fáil have presided over, from the quango sector to planning. You can see the backroom reflexes, you can see where the backroom bits are supposed to go - but NAMA doesn't fit in the back room. It has to sit uncomfortably in the parlour with the international markets and the nice men from the EU Commission.
So, while Fianna Fáil's record is of interest, it's not sufficient to do as many are doing, and simply say "we know its breeding".Liam Byrne wrote: »The fact is that NAMA might have been a necessity following the bank guarantee, but if the banks hadn't been guaranteed by FF then NAMA would NOT be required.
In addition, the lies about the profitability, the lies about the credit flowing, the lies about the dividends, the phrasing of an overpayment being a "discount" and the sudden increase in the wages of those running it are all objectionable and should not happen; pointing this out is perfectly acceptable.
We need the truth and the facts about NAMA, not spin and bull**** and vested interests.
And we certainly haven't gotten the truth from FF and their buddies.
Possibly I simply haven't listened to the same channels as other people - I don't watch TV, after all - and so I've missed out on the con job elements of NAMA's public presentation. As far as I can see, it's a vehicle for taking toxic debts off the banks without either bursting our debt-GDP ceiling or nationalising the banks, in order to prevent the collapse of - in essence - the entire Irish banking sector.
Now, taking toxic debts off the banks appears to be a necessary step for restoring the operation of the banking sector - I'm not sure I've heard anyone say that that's not the case, and if it is the case, then NAMA, or some solution to the toxic debt, plays a part in restoring normal operation to the banks and credit to the economy. NAMA may not be the best vehicle for taking that toxic debt off the banks in vacuo, but it's not operating in vacuo - it has to fulfil the other conditions.
There are people arguing for allowing the banks to collapse, and people arguing for the nationalisation of the banks. In the former case, people point to the US, where some banks were allowed to collapse - but here in Ireland we're talking about the collapse of the entire Irish banking sector. Sure, Anglo probably wasn't systemic to anyone but Fianna Fáil's friends, but you can't argue that the collapse of AIB and BOI - or either of them singly - wouldn't rip the Irish economy an entirely new hole.
In the latter case, the problem seems to me to be the exact same problem that people are arguing is the issue with NAMA - the people involved. Further - and I may well be entirely wrong here - but wouldn't nationalisation involve the Irish taxpayer backing the entire Irish banking portfolio, toxic debt, dodgy assets, the lot? Wouldn't we be taking on exactly the same as NAMA? And whether we bought them at a low value or not, they still need recapitalisation and toxic loan removal before they're functional, and until they're functional we've paid out for nothing at all?
There's my problem - I can't see where NAMA is automatically doomed, and I can't see why the other choices are better. And nobody is really explaining that, except by saying that Fianna Fáil are lying about NAMA and that's that.
cordially,
Scofflaw0 -
Liam Byrne wrote: »And therein lies the problem. Many, many objective comments (and maybe slightly coloured, but no less valid, comments) about FF, about the mess they've landed us in, about their penchant to circle the wagons on the most unacceptable actions, about their arrogance and "do no wrong" opinion of themselves, etc, are incorrectly dismissed as "anti-FF" and "ranting".
The fact is that NAMA might have been a necessity following the bank guarantee, but if the banks hadn't been guaranteed by FF then NAMA would NOT be required.
In addition, the lies about the profitability, the lies about the credit flowing, the lies about the dividends, the phrasing of an overpayment being a "discount" and the sudden increase in the wages of those running it are all objectionable and should not happen; pointing this out is perfectly acceptable.
We need the truth and the facts about NAMA, not spin and bull**** and vested interests.
And we certainly haven't gotten the truth from FF and their buddies.
So where are the alternatives?
You yourself have said it isn't your place to come up with alternatives, which is lazy considering the pickle we are in. It is up to FG sympathisers to post their alternative.
Nationalisation was spouted a year ago. That seems to have died a death as people copped it really wouldn't have been that different as we'd have needed a bad bank. The same banks we are moaning about here would magically be turned around in a few years and sold at a profit.
Let them fail seems to have been the only credible alternative.
Unfortunately it seems we cannot discuss NAMA without posters who aren't convinced by "alternatives" being called FF'ers.Mad Men's Don Draper : What you call love was invented by guys like me, to sell nylons.
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Which is precisely why any clawback is not credible, because if it was credible, the banks would have to record it against their liabilities. If their auditors considered it credible, then they would qualify the accounts which would cause a crisis in the bank.
If the banks are not recording it against the balance sheet, guess what that means? Any clawback is just another bit of Frank Fahey/Willie O Dea deception for the gullible to cling onto. Much like your previous belief that the ECB was going to fund NAMA.
If you are incapable of arguing for NAMA on any basis other than hope and denial of any point you dont like the implications of, then yes, you should really leave it.
Amazingly, that still isnt my argument and it isnt what my argument relies on. My argument isnt what you wish I said, its what I said. Sorry for the ad hominem, you must have been engaged in some higher form of debate when you were putting words in my mouth...
Possibly. You are certainly not arguing it on the points of NAMA itself. Merely some objection to peoples refusal to pull on the green jersey, "shure we are where we are!" and trusting our betters to lead us out of this mess on the NAMA bandwagon. I mean, how bad can NAMA be? No, dont bother me with facts!
While you denounce the imagined poor reasoning of such opposition, your own inability or unwillingness to debate the points on anything other than a "No, I amnt going to accept that" is perhaps more telling.
Let alone the series of strawmen and poorly disguised attacks on posters as opposed to posts...
This is a polite warning. I'm not going to put up with that sort of abuse any further. I'm not sure what you think I've done to rattle your cage, but you can either cool off, or be thrown out.
regards,
Scofflaw0 -
You yourself have said it isn't your place to come up with alternatives, which is lazy considering the pickle we are in. It is up to FG sympathisers to post their alternative.
I don't care what FG sympathisers do - that's up to them.
Or is it possible that you are so embedded in the ridiculous party politics that you think I'm one of them ? :rolleyes:
As for your accusation of being "lazy"; well, if someone wants to pay me €300,00 a year, and give me a bunch of economists as backup, I'll damn well come up with a fair solution. But until then, it's not my job. And it's definitely not "lazy" of me considering the guy that came up with the idea was too lazy to read a report on the Anglo cesspit.
BTW - I'm not a judge either, but I'll still complain if some rapist gets a 5-year sentence......I presume that's OK, so it's ridiculous that people have to suggest alternatives before their objections are taken seriously.
But for the record, there are possibly alternatives that I suggested should be looked into.Let them fail seems to have been the only credible alternative.
Yup. And I think I suggested that we look into replacing them with the credit unions. It would have cost money, but nowhere near as much.
And the banks could go chase after their own loans all by themselves.Unfortunately it seems we cannot discuss NAMA without posters who aren't convinced by "alternatives" being called FF'ers.
Well kettle, pot on that, since you used the phrase "FG sympathiser" above. :rolleyes:
EDIT : By the way your "what are the alternatives" question was well off-topic based on what I posted, which was that unfortunately at this stage NAMA is probably unavoidable, but the main thing was for Lenihan and FF to simply stop lying about it and be honest for once.0 -
Well I guess you can only take seriously arguments that rely on accepting Fianna Fail are stern statesmenIt is up to FG sympathisers to post their alternative.
Quite seriously, enough of this kind of thing. Implicit in every accusation of party affiliation is an ad hominem argument - that the poster isn't arguing anything other than a "party line", and that their opinion can therefore be disregarded.
If we can't have the discussion without anyone who attacks NAMA being labelled as a Fine Gael sympathiser, and anyone who doesn't attack it being labelled as a Fianna Fáil sympathiser, then we won't have the discussion at all.
moderately,
Scofflaw0 -
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You think Ahearne is lying? Despite the fact that when he said this he was awaiting final approval from the ECB for NAMA and Trichet was due to speak in Ireland shortly afterwards. I think this is unlikely.Amhran Nua wrote: »Alan Ahearne said that, not Trichet.
There is also a long list of people who have approved of NAMA including the ECB, the IMF and the commission.There are a long list of people who have pointed out that NAMA is a bad idea, not least of whom is Economics Nobel prize winner Stiglitz...
Alan Ahearne ex Fed, Patrick Honohan ex World Bank, prof Peter Clinch were all involved in devising NAMA and did so under regular consultation with the three bodies above.
How can you renegotiate something you've already given? Do you mean it should be renegotiated when it times out in September? If so you are too late because the 2nd (narrower) guarantee is already in place (The ELG).Which is why the guarantee should have been (and still can be) renegotiated with senior bondholders in a debt for equity deal after temporary nationalisation, which is the normal course of events in situations such as these.
Unlike most other posters in this thread, at least you're advocating an alternative to NAMA. Why would a bondholder accept a debt for equity swap when the equity would be in a state owned body? Or perhaps you think the bank should be refloated first? And where do the toxic assets go? And who would lend to a bank in future that had failed to meet obligations to senior debt holders?0
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