NAMA details emerge

nesf

http://www.rte.ie/news/2010/0330/namatracker.html

Interesting. Haircuts bigger than originally proposed which makes it more likely that NAMA could turn a profit.

jmayo

nesf wrote: »

http://www.rte.ie/news/2010/0330/namatracker.html

Interesting. Haircuts bigger than originally proposed which makes it more likely that NAMA could turn a profit.

Great :rolleyes:
It's swings and roundabouts.
It just means that we are going to have to pour more capital into the worthless relics like Anglo and IN.

nesf

jmayo wrote: »

Great :rolleyes:
It's swings and roundabouts.
It just means that we are going to have to pour more capital into the worthless relics like Anglo and IN.

And the other options are? Letting either fail costs more than capital injections.

dynamick

full juicy details
http://www.nama.ie/Publications/2010/NAMATranche1.pdf

so many billions

AARRRGH

nesf wrote: »

And the other options are? Letting either fail costs more than capital injections.

It's a lose lose situation. Our government will do whatever it takes to bail out the banks, so it's either NAMA or incremental recapitalisation.

Both probably cost the same amount.

mike65

20 billion to keep Anglo-Irish going.

SkepticOne

Moor McDowall on Newstalk saying that the combined cost of NAMA+capital injections will knock about 5% off GDP growth over the next 20 or 30 years.

dan_d

We've now put so much money into Anglo, we can't let it go.

The night they decided to do that, they made the decision that Anglo wouldn't fail - long term.

Glad to see the requirements for the banks' capital by the end of the year. It's been a long time coming.

I think it's now time to draw a line under the whole sorry mess and try to get the country moving again. Yes we'll be paying for it, but there's no point in dwelling on it. It's done now, we need to work on creating jobs and getting the country up and running again.

nesf

nesf wrote: »

http://www.rte.ie/news/2010/0330/namatracker.html

Interesting. Haircuts bigger than originally proposed which makes it more likely that NAMA could turn a profit.

http://www.irishtimes.com/newspaper/opinion/2009/0826/1224253267074.html
46 economists disagree

doc_17

Yeah it might cost more letting anglo fail but if that other bank that got into bother in the eighties (who was it again? was it AIB?) had been allowed to fail then those in charge now would have had that precedent guiding them.

So while it's cheaper in the short term where is the incentive for the banks to not do this again? I'm not sure about the NAMA thing. More and more experts (shane ross, mcwilliams etc) are saying we should have just nationalised them all and forget about NAMA.

NAMA was meant to avoid the need for nationalisation as it not? Now we have NAMA and starte owned banks (or will have them when the inevitable is done)

Guy:Incognito

Deleted User wrote: »

http://www.irishtimes.com/newspaper/opinion/2009/0826/1224253267074.html
46 economists disagree

How many agree or do we only have 46 in the country.

46 could be a big number or a tiny fraction. I assuem it suites your arguement for it to be a big number?

mike65

Either way its far too many in a country of 4 million.

nesf

Deleted User wrote: »

http://www.irishtimes.com/newspaper/opinion/2009/0826/1224253267074.html
46 economists disagree

They disagree with NAMA, not with the idea that larger haircuts makes it more probable to make a profit.

doc_17

Stekelly wrote: »

How many agree or do we only have 46 in the country.

46 could be a big number or a tiny fraction. I assuem it suites your arguement for it to be a big number?

No economists from Davys, Goodbody, Daft, Friends First, AIB, BOI.
That says something in itself. These guys couldn't forecast sunrise. Constantly harping on about soft landings etc. So imo this is a credible list.

More to the point, aside from the government, who is saying this will work?

IrishTonyO

Richard Bruton seems to be making a lot of sense in the Dail at the moment. Very worried that Lenihan says after 8.3 billion this week to Anglo it might mean another 10 billion required later! Thats direct investment of 22+ billion, then add in the loans to NAMA and the figure is just incomprehensible.

kaymin

nesf wrote: »

And the other options are? Letting either fail costs more than capital injections.

Costs who though? There's this big assumption if we let bondholders in the banks bleed that the state will suffer through higher finance costs. But this is not necessarily the case - the Irish government won't have defaulted so bondholders should still have confidence that Irish government debt will be repaid. The banks are not functioning normally anyway and are unlikely to do so while in private hands => why not use the bailout money to set up a bank that will actually lend to the real economy?

LostinBlanch

SkepticOne wrote: »

Moor McDowall on Newstalk saying that the combined cost of NAMA+capital injections will knock about 5% off GDP growth over the next 20 or 30 years.

Yeah but that's alright because

Interesting. Haircuts bigger than originally proposed which makes it more likely that NAMA could turn a profit.

See? It's ok because we don't have to pay, now, we can pay over 30 years.
What was that? You're going to spend another 24 hours in A & E because money taken from this budget is given directly to the banks? Not enough, how about your kids can't get a proper education because that budget is going to be cut? No? how about your car's suspension getting f*cked because nobody is fixing the ever larger potholes in the roads? How about extra taxes like water charges and property tax, or many of the other ways FF are going to pick your pockets. Don't you know, that not one of the big players responsible will ever pay for this? They'll never even see one days jail.

But it's ok the "haircut" a weasel word if there ever was one, isn't overpaying as much of our money as Lendahand originally wanted. At least we have the EU to thank for that.

LostinBlanch

kaymin wrote: »

Costs who though? There's this big assumption if we let bondholders in the banks bleed that the state will suffer through higher finance costs. But this is not necessarily the case - the Irish government won't have defaulted so bondholders should still have confidence that Irish government debt will be repaid. The banks are not functioning normally anyway and are unlikely to do so while in private hands => why not use the bailout money to set up a bank that will actually lend to the real economy?

There'a also the fact that as Moore McDowell said, many of these bondholders will have insurance to protect against their bonds failing. if someone didn't buy insurance, then isn't it their own problem, not ours?

hinault

nesf wrote: »

And the other options are? Letting either fail costs more than capital injections.

the cost of saving Anglo are almost as high as letting Anglo die.

IrishTonyO

hinault wrote: »

the cost of saving Anglo are almost as high as letting Anglo die.

So they say, but will not produce figures to show us, and their costs assume repaying bond holders in full

Zynks

If we (Ireland) were an insurance company, we would be thrown into administration before Quinn.

Today we and our kids (in my view) are being officially pre-robbed, and this act has a 30 year life span. This is shocking stuff!!!

The last one out, please switch the lights of the airport off!

Tau

Deleted User wrote: »

http://www.irishtimes.com/newspaper/opinion/2009/0826/1224253267074.html
46 economists disagree

Correct me if I'm wrong, but that letter basically says that the originally proposed discounts weren't big enough.

The discount has turned out to be bigger than the originally proposed discounts, so saying that NAMA is now more likely to make a profit is entirely consistent with that letter.


Most of the criticism of NAMA compared to the US TARP and the British APS has been that instead of taking the assets at a fair price and making capital injections to keep the banks afloat, the Irish government was going to pay over the odds for the loans.

From a taxpayer prospective, paying over the odds is worse than a capital injection - paying over the odds is money gone, whereas a capital injection is a loan which may return.

As far as I'm concerned the discount being bigger (over 50% bigger!) than expected is great news, the only question is if it's big enough.

IrishTonyO

Tau wrote: »

Correct me if I'm wrong, but that letter basically says that the originally proposed discounts weren't big enough.

The discount has turned out to be bigger than the originally proposed discounts, so saying that NAMA is now more likely to make a profit is entirely consistent with that letter.


Most of the criticism of NAMA compared to the US TARP and the British APS has been that instead of taking the assets at a fair price and making capital injections to keep the banks afloat, the Irish government was going to pay over the odds for the loans.

From a taxpayer prospective, paying over the odds is worse than a capital injection - paying over the odds is money gone, whereas a capital injection is a loan which may return.

As far as I'm concerned the discount being bigger (over 50% bigger!) than expected is great news, the only question is if it's big enough.

even with the discounts we are still paying over the odds

zootroid

IrishTonyO wrote: »

Richard Bruton seems to be making a lot of sense in the Dail at the moment. Very worried that Lenihan says after 8.3 billion this week to Anglo it might mean another 10 billion required later! Thats direct investment of 22+ billion, then add in the loans to NAMA and the figure is just incomprehensible.

He was just interviewed on 6.01 news there, hard to disagree with what he said

peasant

Tau wrote: »

From a taxpayer prospective, paying over the odds is worse than a capital injection - paying over the odds is money gone, whereas a capital injection is a loan which may return.

As far as I'm concerned the discount being bigger (over 50% bigger!) than expected is great news, the only question is if it's big enough.

Swings and roundabouts.

The decision was made not to let the banks fail, so we are paying for their mess in full.

There are two different ways of paying ...either directly through re-capitalisation or indirectly through Nama. Shifting the figures round, changing the timing and fiddling with the haircut doesn't really change the bottom line figure one bit (except for minor differences in interest on the loans that have to be taken to pay for it all).

Bottom line remains the same ...Ireland will balance on the knife edge of bankruptcy for decades and any money that will (hopefully) be made in the economy will go straight into this black hole and this black hole alone.

We' ll be lucky to be standing still for the next 30 years or so.

IrishTonyO

Brian Lenihan on 6.1 seems very defensive/aggressive

Tau

peasant wrote: »

There are two different ways of paying ...either directly through re-capitalisation or indirectly through Nama. Shifting the figures round, changing the timing and fiddling with the haircut doesn't really change the bottom line figure one bit (except for minor differences in interest on the loans that have to be taken to pay for it all).

Dude, it makes a massive difference.

For example, the US is about to make a huge profit from it's bailout of citigroup, which it wouldn't have got if it had simply bought Citi's loans above their value instead of making a capital injection:

http://www.telegraph.co.uk/finance/financetopics/financialcrisis/7535971/US-to-reap-7bn-profit-from-Citigroup-stake-sale.html

SkepticOne

SkepticOne wrote: »

Moore McDowall on Newstalk saying that the combined cost of NAMA+capital injections will knock about 5% off GDP growth over the next 20 or 30 years.

What show was that on? Want to get a link to it when it is available online.
5% of GDP every year over 20 or 30 years is waaaaay more expensive than letting the banks fail :mad:

peasant

Tau wrote: »

Dude, it makes a massive difference.

For example, the US is about to make a huge profit from it's bailout of citigroup,

Yeah ...so how much profit are we going to make from our sale of Anglo, dude?

danman

Deleted User wrote: »

What show was that on? Want to get a link to it when it is available online.
5% of GDP every year over 20 or 30 years is waaaaay more expensive than letting the banks fail :mad:

That simply doesn't seem right. That would be approx just under a billion a year.

Is he expecting NAMA not to make any profit whatsoever?
I'm no economist, but 5% seems way off.

zielarz

I don't believe that letting the banks fall can cost more than bail out. Any logical arguments supporting it?

danman

danman wrote: »

That simply doesn't seem right. That would be approx just under a billion a year.

Is he expecting NAMA not to make any profit whatsoever?
I'm no economist, but 5% seems way off.

its GDP growth rate! To explain i`ll use a hypothetical scenario

Economy with a GDP growth rate of 6% (no bail out)
Same economy with bail out cost of 5% per annum = 6%-5% = a GDP growth rate of just 1% a year!!!

We now have turned a hypothetically healthy booming economy to stagnation for 20 to 30 years....

6-11% GDP growth rate was celtic tiger type GDP growth....

ei.sdraob

nesf wrote: »

And the other options are? Letting either fail costs more than capital injections.

only the case because of an all out guarantee

which is the root problem

funny how interference leads to more interference and larger disasters, especially when the likes of Carol and Lenny (ha!) are at the helm :P

IrishTonyO

ei.sdraob wrote: »

only the case because of an all out guarantee

which is the root problem

funny how interference leads to more interference and larger disasters, especially when the likes of Carol and Lenny (ha!) are at the helm :P

But don't the bank guarantees run out in September? Plus all we have is their word it would cost more to let Anglo fail, show us some figures/indications.

danman

Deleted User wrote: »

its GDP growth rate! To explain......

thanks for the explaination. I was thinking that it didn't work out.

Tau

peasant wrote: »

Yeah ...so how much profit are we going to make from our sale of Anglo, dude?

Time will tell. It's still significantly better than just giving the money to them, despite your emotive ranting on the subject. Saying that it's just "shifting the figures around" is just wrong.

But to put Anglo in perspective, here's an extract from a piece that was written when the US bailed out Citi:

So on November 23rd, 2008, a deal is announced in which the government will bail out Rubin's messes at Citigroup with a massive buffet of taxpayer-funded cash and guarantees. It is a terrible deal for the government, almost universally panned by all serious economists, an outrage to anyone who pays taxes. Under the deal, the bank gets $20 billion in cash, on top of the $25 billion it had already received just weeks before as part of the Troubled Asset Relief Program. But that's just the appetizer. The government also agrees to charge taxpayers for up to $277 billion in losses on troubled Citi assets, many of them those toxic CDOs that Rubin had pushed Citi to invest in. No Citi executives are replaced, and few restrictions are placed on their compensation. It's the sweetheart deal of the century, putting generations of working-stiff taxpayers on the hook to pay off Bob Rubin's [obscenity deleted] tenure at Citi. "If you had any doubts at all about the primacy of Wall Street over Main Street," former labor secretary Robert Reich declares when the bailout is announced, "your doubts should be laid to rest."

Remember, this turned into a $7bn profit!

ei.sdraob

hinault wrote: »

the cost of saving Anglo are almost as high as letting Anglo die.

yet again any figures? is that before or after the guarantee

im working my way thru the doc now, scary ****, its all hitting the fan today

i leave country for few days and it crumbles more

oppenheimer1

For all the Anglo haters on this board I'm surprised that this point didn't catch anyones attention, and its what all the commentators are talking about. Its the surprise shortfall of a further €10bn in future which will take the total state capital injection to €22bn longer term. Given that this figure is rising with each estimate and that the figure for winding the bank down over a ten year period is €30bn and seemingly falling with each estimate, there actually might be a genuine case for an ordered wind down of the bank.

As it stands, keeping it as a going concern is the cheapest option.

ei.sdraob

ei.sdraob wrote: »

yet again any figures? is that before or after the guarantee

WITH the guarantee:

http://m.irishtimes.com/newspaper/breaking/2010/0330/breaking71.htm?via=latest

Winding-up Anglo Irish would lead to a fire-sale of assets and a loss of upwards of €30 billion. In addition, the State would have to provide in the order of €70 billion up-front to meet deposits, bondholders and the liabilities due to the Eurosystem

Obviously less without the guarantee

oppenheimer1

IrishTonyO wrote: »

But don't the bank guarantees run out in September? Plus all we have is their word it would cost more to let Anglo fail, show us some figures/indications.

Minister Lenihan stated in his speech that a gradual withdrawl of the guarantee will be used. Or in other words, the programme is going to be extended.

IrishTonyO

IrishTonyO wrote: »

Richard Bruton seems to be making a lot of sense in the Dail at the moment. Very worried that Lenihan says after 8.3 billion this week to Anglo it might mean another 10 billion required later! Thats direct investment of 22+ billion, then add in the loans to NAMA and the figure is just incomprehensible.

oppenheimer1 wrote: »

For all the Anglo haters on this board I'm surprised that this point didn't catch anyones attention, and its what all the commentators are talking about. Its the surprise shortfall of a further €10bn in future which will take the total state capital injection to €22bn longer term. Given that this figure is rising with each estimate and that the figure for winding the bank down over a ten year period is €30bn and seemingly falling with each estimate, there actually might be a genuine case for an ordered wind down of the bank.

As it stands, keeping it as a going concern is the cheapest option.

I already did mention it however Lenihan on 6.1 now says it will cost 70 billion to wind down the bank, but no figures provided to back this up

IrishTonyO

oppenheimer1 wrote: »

Minister Lenihan stated in his speech that a gradual withdrawl of the guarantee will be used. Or in other words, the programme is going to be extended.

Yes but they could exclude Anglo from the extension if the figures for winding it up added up. However as they won't give any figures we are meant to take them at their word. Honestly think when they are talking 10's of billions, a few facts and figures would be of benefit.

oppenheimer1

IrishTonyO wrote: »

I already did mention it however Lenihan on 6.1 now says it will cost 70 billion to wind down the bank, but no figures provided to back this up

I believe he was referring to an immediate liquidation of all assets, ie an immediate closure. Three scenarios were explored by the new board of anglo and are the figures to which the minister refers. €70bn is the cost of closing the bank now, €30bn closing it down over 10 years, €22bn keeping it as a going concern.

Please correct me if I have misinterpreted the figures

peasant

Tau wrote: »

Time will tell.

So you're one of those "optimists" that I've been hearing so much about?

Try this for size:

Citigroup Inc. has the world's largest financial services network, spanning 140 countries with approximately 16,000 offices worldwide. The company employs approximately 300,000 staff around the world, and holds over 200 million customer accounts in more than 140 countries. It is a primary dealer in US Treasury securities

Wikipedia

and then compare with:

Anglo Irish Bank Corporation (Irish: Banc Angla-Éireannach) is a state-owned bank based in Ireland with its headquarters in Dublin. The company mainly deals in business and commercial banking, with the result that it has only a limited retail presence in the major Irish cities. It also has wealth management and treasury divisions. Anglo-Irish has operations in Austria, Switzerland, the United Kingdom, the United States, and the Isle of Man. The company made €1.2bn in the financial year Sep. 2006–Sep. 2007

And now tell me again how much profit we're going to make from the sale of Anglo after we've pumped 22 billion or thereabouts into this sinkhole.

Well, actually don't bother ...because this is going very much off topic and is a pointless excercise anyway

Its a hundred billion,

they estimate they would lose 30 billion in a firesale and owe 70 to "deposits, bondholders and the liabilities due to the Eurosystem ".

Without the guarantee all we need to cover is the deposits up to 100,000

peasant

peasant wrote: »

And now tell me again how much profit we're going to make from the sale of Anglo after we've pumped 22 billion or thereabouts into this sinkhole.

You must take into account the crowding out effect and negative externalities spending 22 billion in this manner has. Its all bad for our competitiveness especially because 22 billion is such a large sum of money for a country/population of our size.

Spend 22 billion and LOSE IT ALL in Anglo - no pay back, maybe we get 22 billion back. What about inflation?

Invest 22 billion elsewhere and make money thats the real cost. The opportunity cost.

IrishTonyO

Deleted User wrote: »

Its a hundred billion,

they estimate they would lose 30 billion in a firesale and owe 70 to "deposits, bondholders and the liabilities due to the Eurosystem ".

Without the guarantee all we need to cover is the deposits up to 100,000

Where you get 100 billion from? Lenihan said on the news this evening it would be 70 billion

oppenheimer1

peasant wrote: »

So you're one of those "optimists" that I've been hearing so much about?

Try this for size:

Wikipedia

and then compare with:


And now tell me again how much profit we're going to make from the sale of Anglo after we've pumped 22 billion or thereabouts into this sinkhole.

Well, actually don't bother ...because this is going very much off topic and is a pointless excercise anyway

Comparing Citigroup to Anglo isn't a fair comparison, Citi is one of the largest banking orgainsations in the world.

The money being poured into anglo is lost forever. However the reason we need to do this is if we don't there is a very high chance possibility the government won't be able to borrow and neither will the other irish financial institutions be able to refinance the debt. That would probably spell the end for Ireland as a country.


No one is happy about what has happened, not the banks, not the developers, not the government or the people. It presents us all with a mighty challenge and one which will probably see massive tax increases and a reversal of the quality of life which everyone enjoyed. People will be poorer, people will die sooner. The majority of the population are low to middle earners and the tax increases will be targeted at them as they are the largest demographic. They will be hit hardest. Add in the fact that the era of cheap oil is ending, it could be argued that this could well be the best era for humankind ever has or will experience.

We are two years into at least a decade of austerity if not a generation. Much like the way the War left its permanent stain on the psyche of that generation of europeans, this crisis will long be remembered in Ireland. This is a massive turning point in our history and books will be written about these days/months/years.

Only time will tell if we made the right choices.

peasant

Deleted User wrote: »

Spend 22 billion and LOSE IT ALL in Anglo -

oppenheimer1 wrote: »

Comparing Citigroup to Anglo isn't a fair comparison, Citi is one of the largest banking orgainsations in the world.

The money being poured into anglo is lost forever.

That's exactly the point I was trying to make to this Tau dude
Thanks for confirming it.

Liam Byrne

IrishTonyO wrote: »

Where you get 100 billion from? Lenihan said on the news this evening it would be 70 billion

You believed something that Lenihan said ???? :eek:

Zynks

oppenheimer1 wrote: »

Only time will tell if we made the right choices.

and what choices exactly did WE make?

In any case nobody, not even this Mr. Time, could possibly be worse at predicting the size of this hole than the guys running the show at the moment.