NAMA - figures are not adding up

Amhran Nua

Scofflaw wrote: »

I haven't insinuated that he's incorrect - I've pointed out that he's making a definitive statement about matters that are not yet settled. He's neither correct nor incorrect as yet.

Are you afraid to find out his reasons for making that statement? I've no problem contacting businesspeople, politicians, and organisation leaders to find out what they have to say, have done it before many times and will continue to do so. Then again I'm not insinuating he's fabricating lies about NAMA, so I don't need to contact him in your stead.

Scofflaw wrote: »

One might attribute that to not allowing people to simply sling mud.

I find in the absence of heavy handed involvement, debates tend to find a mature level by themselves, depending on the topic. Treat people like children and they will act like children.

Scofflaw wrote: »

Yes, that's an arguably better mechanism. It would still cost money, though.

Mostly shareholder and bondholder money, and probably only for a shorter timeframe than NAMA.

Scofflaw wrote: »

Specifically the bank levy.

Oh yeah, no chance we'll see that happen. If its not in the legislation its not going to happen, especially when it is envisioned to kick in so far down the road, when anyone responsible will have retired. Arguments about it reducing the banks' competitiveness are nonsense, if they survive the next ten years they should easily be able to make up the difference, even over time.

Scofflaw wrote: »

No, NAMA is to take the toxic debt off the Irish banking system. I've stated that several times already.

It's a necessary part of the process, but if you're setting up the question of it getting credit moving by itself, you're using a straw man.

Sorry, thats the mechanism of NAMA, but its purpose is to get credit moving again. Saying otherwise is to fly in the face of innumerable statements from the government. You can argue with that call to authority if you like. And if it doesn't, we need to recapitalise the banks which leads to nationalisation, which should have been done in the first place without hanging the bad decisions of investors around the neck of the taxpayers.

Sand

@Scofflaw

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,
Scofflaw

You have repeatedly smeared anyone who disagrees with your position as "ranting" about Fianna Fail, a series of attempts to play the man instead of the ball, repeatedly ignoring the arguments put forward with refutations as sophisticated as "No, I'm not going to simply accept that", despite having repeatedly been corrected on your understanding of NAMA by various posters including myself.

Read back on your summarising of peoples views below, and then compare it to the ease with which you have accused me of ad hominems, an ad hominem in itself.

I don't have a problem with anti-FF ranting, except where it's passed off as political discussion.

nobody is really explaining that, except by saying that Fianna Fáil are lying about NAMA and that's that.

the biggest one of which is the biggest problem everyone seems to have with NAMA, which is the current government.

I'm opposed, as usual, to mindless knockery, and most of the attacks on NAMA have been exactly that.

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

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 do hope that as well as them being better things for you to do, you also do them better.

I'm not interested in anyone whose response to NAMA is to rant wildly

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.

This is exactly the kind of rant about NAMA that entirely fails to impress me.

There's not a single solid argument in there, just a couple of anecdotes and a lot of speculation interspersed with shouts of "it's all awful! look how bad the government are! it's all lies! lies! it'll never be better! we're doomed I tell you! DOOMED!".

No, I'm not going to simply accept that,

Sure, sure. Nor can we discount the idea that they're all lizard men, or Al-Qaeda operatives, but I'm not going to start building theories on top of it.

By many accounts, NAMA is the worst thing evar in and of itself - so I want to hear why it's a disaster without having to assume the sky will fall in

explanations that involve the total collapse of the Irish economy, meteor strikes, or the dismissal of some bits of the NAMA mechanism but not others, on the other hand, are not convincing

mostly all I get in the way of education on the subject is "AAAH! We're all doomed!", which is somewhat less than satisfying.

Heal thyself.

Scofflaw

Amhran Nua wrote: »

Are you afraid to find out his reasons for making that statement? I've no problem contacting businesspeople, politicians, and organisation leaders to find out what they have to say, have done it before many times and will continue to do so. Then again I'm not insinuating he's fabricating lies about NAMA, so I don't need to contact him in your stead.

You offered two options. I pointed out a third, and indeed a fourth. I haven't said he's lying, and I'll thank you to stop making that unfounded insinuation about me.

Amhran Nua wrote: »

I find in the absence of heavy handed involvement, debates tend to find a mature level by themselves, depending on the topic. Treat people like children and they will act like children.

Well done.

Amhran Nua wrote: »

Mostly shareholder and bondholder money, and probably only for a shorter timeframe than NAMA.

Feel free to lay out the details.

Amhran Nua wrote: »

Oh yeah, no chance we'll see that happen. If its not in the legislation its not going to happen, especially when it is envisioned to kick in so far down the road, when anyone responsible will have retired. Arguments about it reducing the banks' competitiveness are nonsense, if they survive the next ten years they should easily be able to make up the difference, even over time.

Mm. That's kind of the point. It's in all the public material for NAMA, it's part of the deal even though it's not part of the legislation - and more to the point it would be hugely politically popular.

Amhran Nua wrote: »

Sorry, thats the mechanism of NAMA, but its purpose is to get credit moving again. Saying otherwise is to fly in the face of innumerable statements from the government. You can argue with that call to authority if you like. And if it doesn't, we need to recapitalise the banks which leads to nationalisation, which should have been done in the first place without hanging the bad decisions of investors around the neck of the taxpayers.

There's no point in trying to ask me to defend what the government says about NAMA on TV or wherever these claims of "getting credit moving again" are picked up from. NAMA itself states that it is part of the process, not the end of the process, and that's the basis I'm judging it on. I'm not interested in arguing a straw man.

Finally, I don't see how nationalising the banks avoids either the toxic debt issue or the need for recapitalisation.

regards,
Scofflaw

Liam Byrne

Scofflaw wrote: »

It's in all the public material for NAMA, it's part of the deal even though it's not part of the legislation - and more to the point it would be hugely politically popular.

Irrelevant.

There were no legal rules for banks availing of the bailout - just "requests" that they not go over €600,000 remuneration and "requests" that they not appoint from in-house, and FF rolled over on those immediately.

Also it would have been hugely politically popular if FF called an election at any stage in the last few years, and they didn't do that, so hugely politically popular doesn't matter a damn.

Scofflaw

Liam Byrne wrote: »

Irrelevant.

There were no legal rules for banks availing of the bailout - just "requests" that they not go over €600,000 remuneration and "requests" that they not appoint from in-house, and FF rolled over on those immediately.

Also it would have been hugely politically popular if FF called an election at any stage in the last few years, and they didn't do that, so hugely politically popular doesn't matter a damn.

It wouldn't have been hugely politically popular for Fianna Fáil for them to call an election, whereas using the bank levy will be hugely politically popular for whoever does use it (or claims they will at election). If you're not sure what I mean I'm happy to explain further.

cordially,
Scofflaw

Liam Byrne

Scofflaw wrote: »

It wouldn't have been hugely politically popular for Fianna Fáil for them to call an election, whereas using the bank levy will be hugely politically popular for whoever does use it (or claims they will at election). If you're not sure what I mean I'm happy to explain further.

I understand what you mean.....basically, the "politically popular" is based on FF's self-interest and that of their supporters, and the rest of us can go to hell.

The good of the country doesn't factor in the equation.

It would have even been in FF's best interests AND that of the country (strange concept, I know) for them to put the rules for the bailouts into legislation, but they didn't.....and again, you have to ask why not ?

_rebelkid

we all knew nama wouldnt work. and it will never work! we need to spend, not take out debt!!!!! do like the australians, they spent and never went into recession!!:)

Amhran Nua

Scofflaw wrote: »

You offered two options. I pointed out a third, and indeed a fourth. I haven't said he's lying, and I'll thank you to stop making that unfounded insinuation about me.

So once again, is there any reason you refuse to contact him to clarify his statement? In the interests of moving the discussion along, as it were.

Scofflaw wrote: »

Well done.

You're quite welccome.

Scofflaw wrote: »

Feel free to lay out the details.

Already have, twice in this thread.

Scofflaw wrote: »

it's part of the deal even though it's not part of the legislation - and more to the point it would be hugely politically popular.

First of all, if its not in the legislation, its not part of the deal. Second of all, when have FF shown they give a tinkers about what's politically popular at the national level? With Willy O'Dea and John O'Donoghue back on the benches and more to come, they have shown it doesn't concern them.

As long as the potholes keep getting filled in and the fences keep getting fixed, they will retain some degree of power.

Scofflaw wrote: »

There's no point in trying to ask me to defend what the government says about NAMA on TV or wherever these claims of "getting credit moving again" are picked up from.

Okay, so you are willing to ignore what the government has to say about NAMA depending on the circumstances.

Scofflaw wrote: »

Finally, I don't see how nationalising the banks avoids either the toxic debt issue or the need for recapitalisation.

Again, temporary nationalisation and a debt for equity deal. You don't need to recapitalise, or not as much, when the bad loans are wiped out or reduced significantly.

Liam Byrne

Scofflaw wrote: »

If they're stating it as fact, then fair enough.

Mr Lenihan told the Dáil yesterday that just 20% of NAMA loans would ultimately default and the agency would make over €5bn in ten years.

Source : http://www.rte.ie/news/2009/1015/banks.html

ei.sdraob

_rebelkid wrote: »

we all knew nama wouldnt work. and it will never work! we need to spend, not take out debt!!!!! do like the australians, they spent and never went into recession!!:)

spend what exactly

Australia has China on its doorstep hoovering up all sorts of commodities we don't have

Scofflaw

Liam Byrne wrote: »

I understand what you mean.....basically, the "politically popular" is based on FF's self-interest and that of their supporters, and the rest of us can go to hell.

The good of the country doesn't factor in the equation.

It would have even been in FF's best interests AND that of the country (strange concept, I know) for them to put the rules for the bailouts into legislation, but they didn't.....and again, you have to ask why not ?

What, like section 255 of the NAMA Bill: Surcharge on participating institutions?

(2) If—
(a) the Minister decides under section 227(3)(b) that the continuation of NAMA is unnecessary having regard to the purposes of this Act, the Minister shall, or
(b) (i) 10 years have elapsed since the establishment of 15 NAMA, or
(ii) the Minister proposes to publish or has published a Bill for NAMA’s dissolution, restructuring or material alteration,
the Minister may,

direct NAMA to prepare a report and accounts as at a date specified by the Minister or as at the date of the occurrence of an event so specified—

(I) showing the aggregate profits and losses arising to and incurred by NAMA (including NAMA group entities), respectively, from its activities in the period from the date of its establishment to the date or the occurrence of the event so specified, and
(II) duly certified by the Comptroller and Auditor General, and NAMA shall send such report and accounts so certified to the 30 Minister.
(3) Where—
(a) the report and accounts sent to the Minister under subsection (2) disclose an underlying loss has been incurred by NAMA (including NAMA group entities), and (b) the Minister is of the opinion that such underlying loss is unlikely to be otherwise made good, then the Minister may cause—
(i) a provision to be included in a Money Bill, or
(ii) a provision to like effect to be included in any other Bill initiated in Da´ il E´ ireann,
providing for the imposition of a special tax by way of a surcharge on participating institutions in accordance with subsection (4).

cordially,
Scofflaw

dunsandin

if you cant confound them with science, baffle them with bu115hit.

johnnyskeleton

Scofflaw wrote: »

NAMA is a mechanism so large that it can't happen in a back room.

Exactly. Glad we can all agree.

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 you admit we're standing on the ledge?

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".

Even if you were to extend the benefit of the doubt to the current government, does nama really make sense (and I don't mean sense that will pass muster with the opposition I mean real sense, like logic and so forth)?

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.

I realise that in the popular perception that, in economic terms, the property pin is considered as snuff movies are to the casual FHM reader, nevertheless, if you really want to see the discussion on the topic, here ya go (earlier discussions are probably the best way to start):

http://www.thepropertypin.com/viewforum.php?f=50&sid=f2405bf4e6f1d3c62e25a5838ff28811

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.

Appears? Would you accept that viable businesses operate in a viable market? If so, then you might be prepared to accept that viable businesses operate best in viable markets. And if you accpet that you might accept the (contoversial I know) idea that more viable businesses thrive while less viable businesses diminish. Crazy I know. But look, humour me...what if we had a market where bad businesses fail and...I know I might sound crazy but hear me out...good businesses succeed? Just, for one minute, consider this a possibility. In this scenario, there is no need for bank bailouts.

So, forgetting that impossible dream, lets see what we do. Do we aspire to be as close to the ideal as possible as we can, or do we just accept corrupt capitalism and say "**** it, we're different we're Irish".

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.

Exactly, like for e.g. making sure that the true extent of bank losses are not fully disclosed to the free market. Or forcing repossession upon developers. That's what NAMA is about. I'm glad you seem to agree, even though you take the stance of someone who supports NAMA.

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?

The damned if you do, damned if you don't approach doesn't mean a whole lot. The Irish banking system is in serious trouble. The Irish economy is also in trouble. You can only save one. Which do you save?

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,
Scofflaw

Well, in my last post I explained why NAMA was wrong, which you conveniently ignored. Granted, I did laugh uncontrollably at your suggestion that NAMA was not a repository for bad loans, but forgive my sense of realism. This is a long and complex thread. I suggest reading the various threads on tpp, and if you disagree with any of them, I'll gladly aruge that with you.

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.

Just to be clear, I don't mean any of the above as (lest it be considered so) an ad hominem attack. I don't accuse you as belonging to any political party. I don't suggest your opinion can be disregarded. I don't disrespect you as a poster. I just don't accept anything on trust. Not that I don't trust you, I don't trust anyone. I need proof. Therer is nothing in this thread that suggests that NAMA is viable. Maybe it can be said too that there is nothing that shows that NAMA is INviable, but that's not the point really. He who asserts must prove, and the supporters of NAMA have absolutely failed to prove its necessity. So that's where we are.

ei.sdraob

johnnyskeleton wrote: »

But look, humour me...what if we had a market where bad businesses fail and...I know I might sound crazy but hear me out...good businesses succeed? Just, for one minute, consider this a possibility. In this scenario, there is no need for bank bailouts.

Well said lol

Weve really gone crazy with bailouts for everyone,
to the point where we had property investors gamblers on Frontline last night begging for some love

I hope future historians find this thread in internet archive or something

because the banks will do the very same "mistakes" except on a larger scale down the road, since this pesky little thing called moral hazard and common sense has been lobotomised

Scofflaw

johnnyskeleton wrote: »

Exactly. Glad we can all agree.

So you admit we're standing on the ledge?

Even if you were to extend the benefit of the doubt to the current government, does nama really make sense (and I don't mean sense that will pass muster with the opposition I mean real sense, like logic and so forth)?

In general? In detail? In the absence of the bank guarantee? As opposed to the alternatives?

johnnyskeleton wrote: »

I realise that in the popular perception that, in economic terms, the property pin is considered as snuff movies are to the casual FHM reader, nevertheless, if you really want to see the discussion on the topic, here ya go (earlier discussions are probably the best way to start):

http://www.thepropertypin.com/viewforum.php?f=50&sid=f2405bf4e6f1d3c62e25a5838ff28811



Appears? Would you accept that viable businesses operate in a viable market? If so, then you might be prepared to accept that viable businesses operate best in viable markets. And if you accpet that you might accept the (contoversial I know) idea that more viable businesses thrive while less viable businesses diminish. Crazy I know. But look, humour me...what if we had a market where bad businesses fail and...I know I might sound crazy but hear me out...good businesses succeed? Just, for one minute, consider this a possibility. In this scenario, there is no need for bank bailouts.

So, forgetting that impossible dream, lets see what we do. Do we aspire to be as close to the ideal as possible as we can, or do we just accept corrupt capitalism and say "**** it, we're different we're Irish".

We might be saying "*** it, no bank collapses". As a small businessman, I'm certainly saying that.

johnnyskeleton wrote: »

Exactly, like for e.g. making sure that the true extent of bank losses are not fully disclosed to the free market. Or forcing repossession upon developers. That's what NAMA is about. I'm glad you seem to agree, even though you take the stance of someone who supports NAMA.

The damned if you do, damned if you don't approach doesn't mean a whole lot. The Irish banking system is in serious trouble. The Irish economy is also in trouble. You can only save one. Which do you save?

Is there a reason you only save one of them?

johnnyskeleton wrote: »

Well, in my last post I explained why NAMA was wrong, which you conveniently ignored. Granted, I did laugh uncontrollably at your suggestion that NAMA was not a repository for bad loans, but forgive my sense of realism. This is a long and complex thread. I suggest reading the various threads on tpp, and if you disagree with any of them, I'll gladly aruge that with you.

Just to be clear, I don't mean any of the above as (lest it be considered so) an ad hominem attack. I don't accuse you as belonging to any political party. I don't suggest your opinion can be disregarded. I don't disrespect you as a poster. I just don't accept anything on trust. Not that I don't trust you, I don't trust anyone. I need proof. Therer is nothing in this thread that suggests that NAMA is viable. Maybe it can be said too that there is nothing that shows that NAMA is INviable, but that's not the point really. He who asserts must prove, and the supporters of NAMA have absolutely failed to prove its necessity. So that's where we are.

I'm not arguing for NAMA, though. I accept that the probabilities are stacked against NAMA making money, and I accept that there are all sorts of details that can arguably be done another way. ( However, I'll grant you I really don't accept that allowing banks to collapse is anything remotely approaching sensible, and I do think anyone who argues that bank collapses should be allowed as a point of principle probably either has no stake in the economy, or doesn't understand the stake they have, most probably because they are shielded from certain fundamentals by being employees.)

I'm arguing, as I have been all along, against the "DOOMED!!" brigade and their "greatest crime in irish history!!" fellow-travellers. I appreciate that many posters have tried to paint me as defending NAMA in toto, or defending what the government has said about NAMA, but neither of those have been my argument at all.

So I suspect that if you explained to me why NAMA wasn't the best possible mechanism, or was unlikely to work out as rosily as the government claims, I probably have ignored you, because I don't disagree with those views.

cordially,
Scofflaw

johnnyskeleton

ei.sdraob wrote: »

Well said lol

Weve really gone crazy with bailouts for everyone,
to the point where we had property investors gamblers on Frontline last night begging for some love

I hope future historians find this thread in internet archive or something

because the banks will do the very same "mistakes" except on a larger scale down the road, since this pesky little thing called moral hazard and common sense has been lobotomised

The funny thing is that people with traditional righ wing views see me as a left winger, and those with traditional left wing views see me as a right winger.

I hope that those future historians can look back and at least see that there are people who don't push one view or the other, but just want to see competent transparent government.

Some day, eh?

johnnyskeleton

Scofflaw wrote: »

In general? In detail? In the absence of the bank guarantee? As opposed to the alternatives?

I said at the time of the guarantee that it would either be the saving of the world, or the breaking of it. For those that know me, that is not an equivocal statement.


Apart from the fact that you answered questions with questions, because you never responded to my last post I am somewhat weary to reply to yours. Let's start again, point out the specific issues of controversy between us and I'll answer them.

Scofflaw wrote: »

We might be saying "*** it, no bank collapses". As a small businessman, I'm certainly saying that.

Also, as a small businessman, the whole Irish tax system is geared against the self employed/small business, so we can both go one of either two ways. Either "where's my bailout?" or "let's all have the same rules".

Scofflaw wrote: »

Is there a reason you only save one of them?

Yes, because the banking system is dependent on the wider economy, but the reverse is not true.

Scofflaw wrote: »

I'm not arguing for NAMA, though. I accept that the probabilities are stacked against NAMA making money, and I accept that there are all sorts of details that can arguably be done another way.

Well then, there's no reason to buy a pig in a poke, is there, let's see what the real cost is before we decide, no?

Scofflaw wrote: »

( However, I'll grant you I really don't accept that allowing banks to collapse is anything remotely approaching sensible, and I do think anyone who argues that bank collapses should be allowed as a point of principle probably either has no stake in the economy, or doesn't understand the stake they have, most probably because they are shielded from certain fundamentals by being employees.)

There was a time, bad though it may have been, that banks would have runs and go bust. That is bad. But it is not as bad as giving banks licence to do whatever they want with a guarantee they will be covered by the State. Is it trite of me to suggest that the former is like having a kid who drinks despite your stern warnings and the latter is like saying to your kid, I forgive you for whatever bad things you do when drunk, but just try to do less bad things, if you can. I'll support you, no matter what.

As a small businessman, how can you justify different rules for the bigger businesses? I don't get paid I have to dip into savings and/or rely on friends and family. Banks don't get paid, and the State covers all their expenses with a blank cheque. Is it the same for you?

Scofflaw wrote: »

I'm arguing, as I have been all along, against the "DOOMED!!" brigade and their "greatest crime in irish history!!" fellow-travellers. I appreciate that many posters have tried to paint me as defending NAMA in toto, or defending what the government has said about NAMA, but neither of those have been my argument at all.

So you're critical of NAMA, but you don't like people who make sweeping statements? If so then we're agreed (as said above). But if so then there are still a few areas in relation to NAMA that you seem to be either not aware of or else preferring to ignore. If not, then where do you stand - critising NAMA to those who support it, and supporting NAMA to those who critise it?

Scofflaw wrote: »

So I suspect that if you explained to me why NAMA wasn't the best possible mechanism, or was unlikely to work out as rosily as the government claims, I probably have ignored you, because I don't disagree with those views.

cordially,
Scofflaw

This is a very strange thread. You don't agree with NAMA, but you want to defend it against its critics because you percieve them as going too far?

P. Breathnach

Amhran Nua wrote: »

So once again, is there any reason you refuse to contact him to clarify his statement? In the interests of moving the discussion along, as it were.

I don't pretend to answer for Scofflaw, or for anybody other than myself.

I do not accept Gurgdiev's characterisation of NAMA. You seem to regard such an attitude as unjustifiable. That does not mean that I have any obligation to engage directly with him, or seek his permission to have an opinion different from his.

In the interests of moving the discussion along, perhaps you should stop demanding that people accept a contentious opinion as a fact. It becomes tiresome after a while.

K-9

Scofflaw wrote: »

I'm not arguing for NAMA, though. I accept that the probabilities are stacked against NAMA making money, and I accept that there are all sorts of details that can arguably be done another way. ( However, I'll grant you I really don't accept that allowing banks to collapse is anything remotely approaching sensible, and I do think anyone who argues that bank collapses should be allowed as a point of principle probably either has no stake in the economy, or doesn't understand the stake they have, most probably because they are shielded from certain fundamentals by being employees.)

I'm arguing, as I have been all along, against the "DOOMED!!" brigade and their "greatest crime in irish history!!" fellow-travellers. I appreciate that many posters have tried to paint me as defending NAMA in toto, or defending what the government has said about NAMA, but neither of those have been my argument at all.

So I suspect that if you explained to me why NAMA wasn't the best possible mechanism, or was unlikely to work out as rosily as the government claims, I probably have ignored you, because I don't disagree with those views.

cordially,
Scofflaw

I think this is where I am too. I don't think anybody "supports" NAMA here. Hell, I'd love to see the banks fail and the directors all jailed for reckless trading, but, I can see the failings with that, well not all of it, off with their heads.

I can see the failings with NAMA too as well as Nationalisation.

johnnyskeleton wrote: »

I said at the time of the guarantee that it would either be the saving of the world, or the breaking of it. For those that know me, that is not an equivocal statement.



So you're critical of NAMA, but you don't like people who make sweeping statements? If so then we're agreed (as said above). But if so then there are still a few areas in relation to NAMA that you seem to be either not aware of or else preferring to ignore. If not, then where do you stand - critising NAMA to those who support it, and supporting NAMA to those who critise it?



This is a very strange thread. You don't agree with NAMA, but you want to defend it against its critics because you percieve them as going too far?

With the benefit of hindsight I'd have been against the guarantees and the drib drab approach we used. Having said that, I'd wonder would we be that differently of now if we Nationalised then, a popular call then.

We'd have Nationalised and be left with owning bankrupt banks saying, what the feck do we do with these crap loans! We now own nothing! What do we do? I know, set up a Bad Bank!

As regards letting them fail, has anybody an example of letting the top 3 retail banks and the top Building Society in a country fail?

Scofflaw

johnnyskeleton wrote: »

I said at the time of the guarantee that it would either be the saving of the world, or the breaking of it. For those that know me, that is not an equivocal statement.

Regrettably, I don't know you, nor was I aware of you making such a statement. Sad, but true.

johnnyskeleton wrote: »

Apart from the fact that you answered questions with questions, because you never responded to my last post I am somewhat weary to reply to yours. Let's start again, point out the specific issues of controversy between us and I'll answer them.

My issues of controversy are listed at the end of my post, and you find them strange.

johnnyskeleton wrote: »

Also, as a small businessman, the whole Irish tax system is geared against the self employed/small business, so we can both go one of either two ways. Either "where's my bailout?" or "let's all have the same rules".

I don't think either of the above, and I suspect a lot of other small businesses don't either. How do I put this? What I want - in business terms - is stability. I didn't get a bailout last year, and I don't expect one now - but I'm not interested in applying the same rules in a way that involves pulling the rug out from under myself.

johnnyskeleton wrote: »

Yes, because the banking system is dependent on the wider economy, but the reverse is not true.

Ah. OK, that's an interesting viewpoint. What makes you say that the wider economy doesn't need a banking system?

johnnyskeleton wrote: »

Well then, there's no reason to buy a pig in a poke, is there, let's see what the real cost is before we decide, no?

Sure, that would be mildly interesting. We're getting the pig anyway, though.

johnnyskeleton wrote: »

There was a time, bad though it may have been, that banks would have runs and go bust. That is bad. But it is not as bad as giving banks licence to do whatever they want with a guarantee they will be covered by the State. Is it trite of me to suggest that the former is like having a kid who drinks despite your stern warnings and the latter is like saying to your kid, I forgive you for whatever bad things you do when drunk, but just try to do less bad things, if you can. I'll support you, no matter what.

As a small businessman, how can you justify different rules for the bigger businesses? I don't get paid I have to dip into savings and/or rely on friends and family. Banks don't get paid, and the State covers all their expenses with a blank cheque. Is it the same for you?

No, but I don't really care. It seems to be hard to get this across, but I really don't care about the moral hazard issue as long as the bank around the corner stays the same. Maybe that's wrong of me, but let me put it to you like this:

1. assume NAMA loses €54bn over the next decade (unlikely, but saves me arguing about a lower figure).

2. assume that's going to come out of my taxes (and everyone else's too, obviously).

3. I pay somewhere around €17,500 in additional taxes over the next decade to support NAMA - an extra €1,750 per year (based on back of beermat calculations of my tax payments compared to national tax income).

Am I willing to pay that extra tax to avoid a bank collapse? Yes. And that's pretty much a worst-case scenario. If NAMA is going to make losses of 10%, then I'm only stumping up €175 extra in tax a year to pay for it. And that's assuming the bank surcharge tax mechanism isn't actually operated.

Talk about moral hazard doesn't mean a darned thing to me on a business level, but a bank collapse does. I suspect that's one of the reasons much of the indignation of economic pundits, particularly the 'free-market' ones, is wasted on ordinary voters. I'll vote for better bank regulation, certainly. Greater transparency? Absolutely. Bank collapse? No thanks. Bank collapse on point of principle? Hilarious...now feck off back to the university coffee-shop! No, I don't care whether you're sitting at a staff table or a student one - it's all the same to me.

I can see people think I ought to be outraged by the idea of having to support the banks with my taxes - well, outrage earns me nothing.

johnnyskeleton wrote: »

So you're critical of NAMA, but you don't like people who make sweeping statements? If so then we're agreed (as said above). But if so then there are still a few areas in relation to NAMA that you seem to be either not aware of or else preferring to ignore. If not, then where do you stand - critising NAMA to those who support it, and supporting NAMA to those who critise it?

This is a very strange thread. You don't agree with NAMA, but you want to defend it against its critics because you percieve them as going too far?

That's how I roll, as they say. It's a limited defence, though, otherwise I'd find myself too far over the other side.

I'm opposed to sweeping statements that consist of fantasy, melodramatics, partisanry, conspiracy theory, knockery, and so on. I'm opposed to them in any debate, because they're worse than useless. If we're going to have a debate on NAMA, I'd prefer to make my mind up on the basis of rational debate - otherwise, I'm going to adopt the view I expressed above, which is that I'm willing to cover NAMA rather than have the banks collapse.

cordially,
Scofflaw

SkepticOne

K-9 wrote: »

We'd have Nationalised and be left with owning bankrupt banks saying, what the feck do we do with these crap loans! We now own nothing! What do we do? I know, set up a Bad Bank!

Nationalisation doesn't necessarily avoid the bad bank scenario. It could have been a means of separating out the bad assets without buying them from the banks. Thus the issue of pricing does not arise to the same extent. The whole process could have been over and done with months ago. There would no need to individually price each loan and there would not have been the issues with the EU commission. The period of nationalisation would be over by now.

You would still have the bad bank however and so many the issues that are being debated on this thread would remain. The real problem with the second part of NAMA have to do with massive state interference in the property market causing problems with the wider economy.

It is too late for nationalisation or any of the other alternatives that have been debated here. I think most of them were better than the current approach but the time for implementing them has passed.

There is still however the issue of how NAMA manages the assets over the next 10 or so years. How this is handled will make a huge difference and is still worthy of debate.

Scofflaw

SkepticOne wrote: »

Nationalisation doesn't necessarily avoid the bad bank scenario. It could have been a means of separating out the bad assets without buying them from the banks. Thus the issue of pricing does not arise to the same extent. The whole process could have been over and done with months ago. There would no need to individually price each loan and there would not have been the issues with the EU commission. The period of nationalisation would be over by now.

You would still have the bad bank however and so many the issues that are being debated on this thread would remain. The real problem with the second part of NAMA have to do with massive state interference in the property market causing problems with the wider economy.

It is too late for nationalisation or any of the other alternatives that have been debated here. I think most of them were better than the current approach but the time for implementing them has passed.

There is still however the issue of how NAMA manages the assets over the next 10 or so years. How this is handled will make a huge difference and is still worthy of debate.

And as much transparency as we can force the politicians into is what we should aim for there, along with as much scrutiny - particularly expert scrutiny - as we can muster ourselves. Any damage done to the wider economy by the handling of NAMA assets is not going to be factored into the "losses" at the end, come what may.

Again, though, I don't see that there's any way that the 'position' of Irish developers and banks could be unwound without massive implications for Irish property.

cordially,
Scofflaw

P. Breathnach

Scofflaw wrote: »

... I'm willing to cover NAMA rather than have the banks collapse...

Nutshell for Scofflaw, please, in which to store this succinct summary.

K-9

SkepticOne wrote: »

Nationalisation doesn't necessarily avoid the bad bank scenario. It could have been a means of separating out the bad assets without buying them from the banks. Thus the issue of pricing does not arise to the same extent. The whole process could have been over and done with months ago. There would no need to individually price each loan and there would not have been the issues with the EU commission. The period of nationalisation would be over by now.

You would still have the bad bank however and so many the issues that are being debated on this thread would remain. The real problem with the second part of NAMA have to do with massive state interference in the property market causing problems with the wider economy.

It is too late for nationalisation or any of the other alternatives that have been debated here. I think most of them were better than the current approach but the time for implementing them has passed.

There is still however the issue of how NAMA manages the assets over the next 10 or so years. How this is handled will make a huge difference and is still worthy of debate.

I'm not sure. With Nationalisation we would own the whole lot, bad, dodgy and good.

Going on what is being said by anti NAMA posters on here, (for want of a better term), we'd end up owning a few bankrupt banks, wondering how do we get the banks lending again?

SkepticOne

K-9 wrote: »

I'm not sure. With Nationalisation we would own the whole lot, bad, dodgy and good.

Because you own the whole lot it is much simpler to separate the assets into good and bad. You are not buying them from anyone. Once you have separated out the bad assets you then privatise the 'good' bank. You just need to make sure that you transfer sufficient bad assets that the 'good' bank is attractive to the market when privatised.

Of course you still have the bad bank issues but you have dealt with the transfer issues in a much cheaper and faster way.

Saving banks that have made such huge mistakes as the Irish ones will never be cheap but the current approach is very wasteful and problematical.

Like I said this would have been a lot better than the current approach imo, but the time has unfortunately passed. It was never considered as an option by the government. The reason for this is probably political.

How the bad assets are handled over the ten years is the main issue now.

gurramok

K-9 wrote: »

Going on what is being said by anti NAMA posters on here, (for want of a better term), we'd end up owning a few bankrupt banks, wondering how do we get the banks lending again?

Ask yourself, is the Irish banking market a closed shop to domestic and foreign competitors?
Answer is no. New or foreign banks will jump in to fill the vacuum 'to get lending again'.

K-9

gurramok wrote: »

Ask yourself, is the Irish banking market a closed shop to domestic and foreign competitors?
Answer is no. New or foreign banks will jump in to fill the vacuum 'to get lending again'.

But would they want them in their current state, with no NAMA?

Sorry, misunderstood there. There doesn't seem to be a rush of foreign banks into the market here atm.

K-9

SkepticOne wrote: »

Because you own the whole lot it is much simpler to separate the assets into good and bad. You are not buying them from anyone. Once you have separated out the bad assets you then privatise the 'good' bank. You just need to make sure that you transfer sufficient bad assets that the 'good' bank is attractive to the market when privatised.

Of course you still have the bad bank issues but you have dealt with the transfer issues in a much cheaper and faster way.

Saving banks that have made such huge mistakes as the Irish ones will never be cheap but the current approach is very wasteful and problematical.

Like I said this would have been a lot better than the current approach imo, but the time has unfortunately passed. It was never considered as an option by the government. The reason for this is probably political.

How the bad assets are handled over the ten years is the main issue now.

But would it really be that simple and a matter of months to set up the bad bank? All the paperwork and legal issues would still exist and the same people would be crying for transparency, accountability etc.

I don't see how setting up a bad bank through Nationalisation would be any easier as it has the same issues.

The bad bank is buying them, because you'd have to set up a new structure for the good bank that you want privatised.

ei.sdraob

K-9 wrote: »

But would they want them in their current state, with no NAMA?

Sorry, misunderstood there. There doesn't seem to be a rush of foreign banks into the market here atm.

no they are rushing away

because by bailing out the incompetent irish banks

they are giving them an unfair advantage when compared to the likes of Halifx or Postbank or whoever else will leave next

NAMA is already causing businesses to go

K-9

ei.sdraob wrote: »

no they are rushing away

because by bailing out the incompetent irish banks

they are giving them an unfair advantage when compared to the likes of Halifx or Postbank or whoever else will leave next

NAMA is already causing businesses to go

Funnily enough, there is interest in taking over Postbank by a foreign group.