Anglo gonna cost wha? 35 billion now and counting.

hoyanto

Hoyaz lads. Seems Anglo is gonna cost an extra 11+ billion now or wha?

FRESH doubts have emerged about the taxpayers' final bill for bailing out Anglo Irish Bank after the Department of Finance admitted an €11.5bn loan given to the bank is secured on highly risky property loans.

http://www.independent.ie/business/irish/economic-crisis-final-bill-for-anglo-may-be-euro335bn-2254899.html

Discuss

noodler

hoyanto wrote: »

Hoyaz lads. Seems Anglo is gonna cost an extra 11+ billion now or wha?

FRESH doubts have emerged about the taxpayers' final bill for bailing out Anglo Irish Bank after the Department of Finance admitted an €11.5bn loan given to the bank is secured on highly risky property loans.

http://www.independent.ie/business/irish/economic-crisis-final-bill-for-anglo-may-be-euro335bn-2254899.html

Discuss

I didn't even know the CB had loaned Anglo €11.5bn last year.

Has this ever been mentioned publically before?

Indo article says CB figures are expected this week showing how they recorded the loan in their accounts - should be interesting.

ei.sdraob

noodler wrote: »

I didn't even know the CB had loaned Anglo €11.5bn last year.

Has this ever been mentioned publically before?

Indo article says CB figures are expected this week showing how they recorded the loan in their accounts - should be interesting.

Yes i mentioned this before

it was 10 billion exactly then, David McWilliams also had an article on this 10b many months ago from what I remember

this wasn't hidden or anything, but sure what is 10 billion between friends

noodler

ei.sdraob wrote: »

Yes i mentioned this before last autumn

it was 10 billion exactly then, David McWilliams also had an article on this 10b many months ago from what I remember

I'll try to dig it up.

The supposed value of the property in question will be interesting (value at the time). I wonder the were the CB savy enough to order the bank to give it €20bn in collateral in case the loand failed and it was worth nothing like it was reported to.

I seriously doubt it.

noodler

Found it.

http://www.thepost.ie/commentandanalysis/outsiders-pay-for-insider-greed-47921.html

I actually did read it too - remember the bit about the Father's grave in Shankill. Personally, it got forgotten in the Super Tuesday lark that took place at the end of that month.

Here's the relevant part:

In the past year, the Irish Central Bank has lent €10 billion to Anglo, using an instrument that it would prefer you knew nothing about. This instrument, called the ‘‘master loan repurchase agreement’’, is a hangover from when we had our own currency. Evidence of its existence is buried deep in the Central Bank’s balance sheet under the ambiguous title ‘‘other assets’’.

The reason this is important is that it shows that, since Anglo was nationalised, it has gobbled up another €10 billion of our money. When Enda Kenny says there will be riots if Anglo receives another cent of public money, in away he is behind the times. The money has already been given to Anglo, via this secretive facility.

Since last March, the Central Bank has lent Anglo €10 billion in return for so called collateral of €14.5 billion. But the only collateral Anglo has are worthless loans like the land for Woodbrook golf course in Shankill, which Davy Stockbrokers now estimates is worth 5 per cent of its 2006 purchase price.

If we were to apply the same discount to the Central Bank’s loan to Anglo, we would see that the Central Bank - acting in our name - has lent €10 billion in exchange for collateral that is worth just over €750million.SotheCentral Bank has probably already lost over €9 billion. The only way this will ever be recovered is if Nama succeeds in driving the price of this land in Shankill backup.

RichardAnd

Disheartening stuff. It's my understanding that Anglo is a pretty small bank when compared to AIB or others. I just dont' get how they can cost 33.5billion to put right.

hoyanto

Where is Scarab80 when you need some balanced Anglo defending?

noodler

hoyanto wrote: »

Where is Scarab80 when you need some balanced Anglo defending?

Just noticed these are your first posts.

I hope you aren't here to grind an axe from a previous account.

ei.sdraob

collecting paycheck at NAMA PR dept :P

Laminations

I don't think people who support NAMA or Anglo (or FF for that matter) realise the seriousness of their support. They may think that when quite damning figures or stories emerge that they can just put their hands up and say 'oh well I got it wrong' but this is billions we are talking about and your support enables these 'mistakes'. Apologists are complicity in these escapades

noodler

Laminations wrote: »

I don't think people who support NAMA or Anglo (or FF for that matter) realise the seriousness of their support. They may think that when quite damning figures or stories emerge that they can just put their hands up and say 'oh well I got it wrong' but this is billions we are talking about and your support enables these 'mistakes'. Apologists are complicity in these escapades

I don't think half the posters on this board could distinguish between the following:

A) A poster pointing out flaws in some of the nama criticisms (or basic factual errors)

An apologist (which is a buzzword popular around here when some of the more simpl-minded run out of ideas).

If you can't tell the difference between what myself (or Scarib) post compared to the words of somebody who fully supports then plan then the problem lies squarely with yourself.

douglashyde

Laminations wrote: »

I don't think people who support NAMA or Anglo (or FF for that matter) realise the seriousness of their support. They may think that when quite damning figures or stories emerge that they can just put their hands up and say 'oh well I got it wrong' but this is billions we are talking about and your support enables these 'mistakes'. Apologists are complicity in these escapades

Support for NAMA does not necessarily mean support for Anglo or FF.

You can't assume that just because one was wrong; so is the other.

ei.sdraob

douglashyde wrote: »

Support for NAMA does not necessarily mean support for Anglo or FF.

You can't assume that just because one was wrong; so is the other.

There would be no need for NAMA if Anglo sunk and/or FF werent in power

one is build on the the actions of others

noodler

douglashyde wrote: »

Support for NAMA does not necessarily mean support for Anglo or FF.

You can't assume that just because one was wrong; so is the other.

Precisely.

ei.sdraob wrote: »

There would be no need for NAMA if Anglo sunk and/or FF werent in power

one is build on the the actions of others

So what would AIB and BOI done?

Sinking Anglo wouldn't have saved us all the money now, have a read of this breakdown of what Anglo owes and what could be allowed to default.

http://www.irisheconomy.ie/index.php/2010/04/03/anglo-what-are-the-options/

Laminations

Firstly while your 'simple minded' quip was a personal attack be reminded that I didn't mention any names - you associated yourself and Scarab with the word apologist.

Secondly, if you only engage in discussing topics based on defending against criticism rather than critiquing then you look like an apologist. If you want you can list out the problems you see but you seem to prefer poking holes in the problems other people mention. What was your initial response to this story?

'Oh I don't remember this at the time' followed by 'i'll look into it'

So could you tell us what you think about it now?

Laminations

douglashyde wrote: »

Support for NAMA does not necessarily mean support for Anglo or FF.

You can't assume that just because one was wrong; so is the other.

I didn't assume anything, I see mutual exclusivity in opinions hence my use of 'or'

noodler

Laminations wrote: »

Firstly while your 'simple minded' quip was a personal attack be reminded that I didn't mention any names - you associated yourself and Scarab with the word apologist.

Secondly, if you only engage in discussing topics based on defending against criticism rather than critiquing then you look like an apologist.

Seriously, did you not just enter a topic on this specific aspect of Anglo and then start ranting and raving about percieved 'apologists' at nobody's behest but your own?

Laminations wrote: »

If you want you can list out the problems you see but you seem to prefer poking holes in the problems other people mention.

And I will continue to do so if I consider them incorrect.

Gems like the Irish Central bank's liabilities are not our own or that the Anglo business plans somehow had something to do with the capital injections the bank required.

Laminations wrote: »

What was your initial response to this story?

'Oh I don't remember this at the time' followed by 'i'll look into it'

So could you tell us what you think about it now?

Scroll up. Or are you being selective?

Laminations

noodler wrote: »

So what would AIB and BOI done?

I'm sure the 35 billion wasted on Anglo would have gone some way in bringing our less diseased banks back to full health

hinault

Comedy gold:D:D:D:D

noodler

Laminations wrote: »

I'm sure the 35 billion wasted on Anglo would have gone some way in bringing our less diseased banks back to full health

Surely you can see how a NAMA would still be better than just 'giving' AIB and BOI the money in that situation?

Also, so far we have given Anglo 4+8.3+2 = 14.3bn that we won't get back.

I guess it still has to be confirmed that we are putting in the other €8bn promised in March and whether or not the €11.5bn can be paid back over time as Lenihan says (although I guess that implies an implicit assumption on his part that the commission won't force us to close the bank down).

Laminations

Your opinion on this so far is that you wonder if the CB secured extra collateral in case the deal nosedived as it has done and you conclude that

'you seriously doubt it'

So is their behaviour acceptable? Prudent? In the tax layers best interest? What's your actual opinion?

ei.sdraob

noodler wrote: »

Precisely.



So what would AIB and BOI done?

Sinking Anglo wouldn't have saved us all the money now, have a read of this breakdown of what Anglo owes and what could be allowed to default.

http://www.irisheconomy.ie/index.php/2010/04/03/anglo-what-are-the-options/

do remember that Anglo only became a huge problem due to a blanket guarantee that also protected the bondholders

guess who came up with total guarantee? Fianna Fail

€27 billion are customer deposits (nearly €8 billion of which is payable on demand.)
€15 billion are debt securities. Most of this debt is due very soon. There’s €1.5 billion in shortish term commercial paper and CDs. Of the €13 billion in medium term notes, at least €7.4 billion is due before the guarantee runs out in September this year and €9.7 billion is due by December this year.
€12.2 billion is owed to the ECB (not the €24 billion figure mentioned by Brendan Keenan on Thursday.)
€9.3 billion is deposits from banks.
€2.3 billion in subordinated bonds, none of which are due before 2014.
And then there’s the usual odds and ends such as derivatives and other random stuff.

btw last i checked 27 billion (whats owned to depositors) is a smaller number than 35 or whatever it is now (excluding NAMA ****e of course)

if we stayed with the 20,000 deposit protection per customer limit how much of that 27 billion would have been insured, since Anglo never released the number of depositors we dont know

and was that the amount of deposit back when the gurantee came in or is most of this due to aggressive advertising for Anglo savings schemes in last year

once again we are not provided with any details

Scofflaw

People are getting unnecessarily heated and a bit personal here.

moderately,
Scofflaw

noodler

Laminations wrote: »

Your opinion on this so far is that you wonder if the CB secured extra collateral in case the deal nosedived as it has done and you conclude that

'you seriously doubt it'

So is their behaviour acceptable? Prudent? In the tax layers best interest? What's your actual opinion?

Theres not much else I can say until the CB release the balance sheet this week. Is my dismay at the fact we have loaned €11.5bn on (most likely) properties that have fallen in value not fairly self-evident?

This is supposed to be an economics forum. If all you want to do is make political criticisms then maybe, this isn't the place.

ei.sdraob wrote: »

do remember that Anglo only became a huge problem due to a blanket guarantee that also protected the bondholders

guess who came up with total guarantee? Fianna Fail

And I'd say the same to you. Is that all you want on an Irish economy forum? Can we not leave poltics out of any of this when we discuss it?

Why are you bring up the guarantee for the umpteenth time? Everyone knows the guarantee cause the money to be pumped into Anglo - that is a given.

On an economics forum we should be discussing the procs and cons and what strategies we can adopt going forward. Simply lamenting the guarantee as a cause for the situation we find ourselves in doesn't really do anything other than politicise the debate.

Laminations wrote: »

btw last i checked 27 billion (whats owned to depositors) is a smaller number than 35 or whatever it is now (excluding NAMA ****e of course)

No idea where you got 27 from, I saw 35 in the 2009 accounts alright (released in April I think), I don't know what figures you have seen since then.

Laminations wrote: »

if we stayed with the 20,000 deposit protection per customer limit how much of that 27 billion would have been insured, since Anglo never released the number of depositors we dont know

and was that the amount of deposit back when the gurantee came in or is most of this due to aggressive advertising for Anglo savings schemes in last year

once again we are not provided with any details

I am not too sure about any of this. I believe it is fundamentally wrong to let depositors lose out though. Whether they are rich depositors or not, bear in mind you could be including someone with their lifesavings above €20k in that.

Laminations

ei.sdraob wrote: »

do remember that Anglo only became a huge problem due to a blanket guarantee that also protected the bondholders

guess who came up with total guarantee? Fianna Fail

btw last i checked 27 billion (whats owned to depositors) is a smaller number than 35 or whatever it is now (excluding NAMA ****e of course)

if we stayed with the 20,000 deposit protection per customer limit how much of that 27 billion would have been insured, since Anglo never released the number of depositors we dont know

and was that the amount of deposit back when the gurantee came in or is most of this due to aggressive advertising for Anglo savings schemes in last year

once again we are not provided with any details

And this is the issue that frustrates me most. Transparency. I'd hazard a guess that Anglo had very few depositors. It's being touted as a systemic bank and criticism of Anglo is always met with defence of 'the banking system'. On the week in politics last night Minister Power declared that if we'd let Anglo go, the next morning we'd regret it when all ATms were closed. James Reilly asked why BOI and AIB would be affected and got no answer. Powers scaremongering claim is more absurd when Anglo has no real ATMs. We want the figures on Anglo, it's inclusion in NAMA is ruining NAMA itself and FF are responsible for it all so ei.sdraob is right, it's all connected

ei.sdraob

noodler wrote: »

And I'd say the same to you. Is that all you want on an Irish economy forum? Can we not leave poltics out of any of this when we discuss it?

Why are you bring up the guarantee for the umpteenth time? Everyone knows the guarantee cause the money to be pumped into Anglo - that is a given.

On an economics forum we should be discussing the procs and cons and what strategies we can adopt going forward. Simply lamenting the guarantee as a cause for the situation we find ourselves in doesn't really do anything other than politicise the debate.

hello like

you replied
to
my post here



we wouldn't be in the mess we are today if a politician (with no economics background) made a different decision that fateful day
whether you like it or not politics and economics are entwined
and in case you didnt notice this forum is a subforum of politics
there is a dedicated economics forum on this site

Laminations wrote: »

On the week in politics last night Minister Power declared that if we'd hamlet Anglo go, the next morning we'd regret it when all ATms were closed.

thats the worst thing about Anglo, it has no ATMs and until recently was a largely unknown bank with small and crooked customer base (seriously how many "normal" people used this bank before two years ago, and of course no details are provided)
Anglo became "systematic" because FF made it so

noodler

ei.sdraob wrote: »

hello like

you replied
to
my post here



we wouldn't be in the mess we are today if a politician (with no economics background) made a different decision that fateful day

whether you like it or not politics and economics are entwined

and in case you didnt notice this forum is a subforum of politics

there is a dedicate economics forum on this site





thats the worst thing about Anglo, it has no ATMs and until recently was a largely unknown bank with crooked customer base
Anglo became "systematic" because FF made it so

God help me.

ei.sdraob

noodler wrote: »

No idea where you got 27 from

the irisheconomy post you linked to earlier

noodler wrote: »

God help me.

keep repeating that for next few decades while you and your children are paying for this via increased taxes and reduced services

noodler

ei.sdraob wrote: »

the irisheconomy post you linked to earlier

My fault.

Where'd you get the 35 from was what I should have said.

Liam Byrne

noodler wrote: »

I am not too sure about any of this. I believe it is fundamentally wrong to let depositors lose out though. Whether they are rich depositors or not, bear in mind you could be including someone with their lifesavings above €20k in that.

So it's OK to charge them and waste €18,000 so that they can get their original €20,000 back ?

noodler

Liam Byrne wrote: »

So it's OK to charge them and waste €18,000 so that they can get their original €20,000 back ?

You lost me.

Laminations

The idiocy of thinking you can discuss economics without reference to government policy or politics in general - and on a 'politics' subforum.

Anyway I'm sure faith and trust play a part in economics, at what number of billions pumped into Anglo (above the numbers forecast) will you lose trust in this economic solution?

Liam Byrne

noodler wrote: »

You lost me.

The cost of NAMA and bailing out the banks, allocated to every working adult, is heading towards €18,000 each; the figures are around here somewhere.

ei.sdraob

noodler wrote: »

My fault.

Where'd you get the 35 from was what I should have said.

this thread title

as i already mentioned that 27 billion deposit is questionable:

* we dont know how much of that money on deposit was there BEFORE the guarantee was given, no info is available either
* we dont know how many customers Anglo had BEFORE the guarantee was given and hence how much the state would have had to pay in the event of Anglo going under back then (with only a 20,000 insured limit)


there is also another important point, lets say the state was liable for 27 billion to depositors back 2 years ago if anglo fell then
this money would have ended up being mostly lodged in other irish banks propping them up in the process
not like it would have disappeared into some black hole (As has happened since)


or alternatively the state could have instead of paying out money it doesnt have provided IOUs to the depositors (yes it would have sucked, but thats price to pay for banking with crooks)


from day 1 me and many others here (even tho we usually disagree with each other on other subjects) and on other site have called Anglo for what it is, a sham

thebman

noodler wrote: »

Theres not much else I can say until the CB release the balance sheet this week. Is my dismay at the fact we have loaned €11.5bn on (most likely) properties that have fallen in value not fairly self-evident?

This is supposed to be an economics forum. If all you want to do is make political criticisms then maybe, this isn't the place.

This is exactly the place for political and economic discussion in same thread.

The place your looking for purely economics discussion is here:
http://www.boards.ie/vbulletin/forumdisplay.php?f=858

Under Science. This forum is more for the politics of economics than pure economics which is why its full of crap and hearsay.

noodler

Liam Byrne wrote: »

The cost of NAMA and bailing out the banks, allocated to every working adult, is heading towards €18,000 each; the figures are around here somewhere.

Why not let all your cash in AIB and BOI be absorbed by other creditors in that case?

No, the deposit principle is there for a reason. Depositors were not risk takers and should be protected.

douglashyde

The majority of people here seem to have a big problem with NAMA.

My question would be what is the alternative?

For example, if the Govt only guaranteed deposits and not bondholders, how do you think that would of reflected on Ireland International image?

Do you think people would have been less willing to invest in Irish bonds for example?

noodler

Laminations wrote: »

Anyway I'm sure faith and trust play a part in economics, at what number of billions pumped into Anglo (above the numbers forecast) will you lose trust in this economic solution?

Surely a joke?

No, really it has to be.

ei.sdraob wrote: »

this thread title

as i already mentioned that 27 billion deposit is questionable:

* we dont know how much of that money on deposit was there BEFORE the guarantee was given, no info is available either
* we dont know how many customers Anglo had BEFORE the guarantee was given and hence how much the state would have had to pay in the event of Anglo going under back then (with only a 20,000 insured limit)

Sorry I wasn't on the ball there. You think it is possible the bank increased its deposits since the guarantee? I am pretty certain, the 2008 figures had more deposits than the 2009 ones.

ei.sdraob wrote: »

there is also another important point, lets say the state was liable for 27 billion to depositors back 2 years ago if anglo fell then
this money would have ended up being mostly lodged in other irish banks propping them up in the process
not like it would have disappeared into some black hole (As has happened since)

Agreed. I have stated at least 5 times in thwo threads over the last weekend that I would have only saved Anglo's depositors and ECB debt.

ei.sdraob wrote: »

or alternatively the state could have instead of paying out money it doesnt have provided IOUs to the depositors (yes it would have sucked, but thats price to pay for banking with crooks)

Again, I don't advocate letting Anglo depositors lose out anymore than AIB or BOI ones,

ei.sdraob wrote: »

from day 1 me and many others here (even tho we usually disagree with each other on other subjects) and on other site have called Anglo for what it is, a sham

Everybody has knows the status of Anglo for nearly two years.

Are there people who still think it is a great bank? Or are you referring to the people contemplating the cheapest way to deal with it now?

There is a difference.

Again, if every discussion ends in "the guarantee did it" then you don't get anywhere. Nobody, bar the odd Government spokesman but they have to say it now, seems to think the guarantee was a good idea in its original, 'blanket' form.

ei.sdraob

douglashyde wrote: »

The majority of people here seem to have a big problem with NAMA.

My question would be what is the alternative?

we had many threads discussing many alternatives, hell even complete nationalisation of all the banks involved would have been a better option dare i say (which is where we endedup anyways, and paid 10x more for some banks than they are worth)

douglashyde wrote: »

For example, if the Govt only guaranteed deposits and not bondholders, how do you think that would of reflected on Ireland International image?

Do you think people would have been less willing to invest in Irish bonds for example?

with the benefit of hindsight (yes i know) of the Greek situation, the EU and ECB would have stepped in

and we would have much more "goodwill" than Greece since our problems would not be just due to a longterm deficit being run up

noodler wrote: »

Sorry I wasn't on the ball there. You think it is possible the bank increased its deposits since the guarantee? I am pretty certain, the 2008 figures had more deposits than the 2009 ones.

not a joke, Anglo have seriously increased their depositor base in last year or two, by offering best savings rate for long time now and a massive advertising campaign
hell there is even an advert at the bottom of this page

hinault

ei.sdraob wrote: »

thats the worst thing about Anglo, it has no ATMs and until recently was a largely unknown bank with small and crooked customer base (seriously how many "normal" people used this bank before two years ago, and of course no details are provided)
Anglo became "systematic" because FF made it so

You raise a very interesting point.

Five years ago I worked at Stephens Court, the building occupied by Anglo and ESB International (I was work with ESBI at the time).

It was clear just from the body language alone that Anglo was not like other banks.
The lifts in the building did not stop at the managerial floors of Anglo - you needed special access codes to enter those floors.
Fraternisation between Anglo and ESBI staff was not encouraged in the communal areas.

It was certainly not a "normal" bank back then.

Laminations

douglashyde wrote: »

.

For example, if the Govt only guaranteed deposits and not bondholders, how do you think that would of reflected on Ireland International image?

Do you think people would have been less willing to invest in Irish bonds for example?

Has any other country seen a deterioration in sovereign credit ratings based solely on a private bank going to the wall? Did America after Lehmans or UK after Northern Rock? I believe some government intervention was necessary for our less diseased banks but including Anglo drags the whole thing down and it doesn't penalise those bondholders who had a choice in investing in Irish banks and chose risky Anglo - out of greed rather than prudence

hinault

noodler wrote: »

Why not let all your cash in AIB and BOI be absorbed by other creditors in that case?

No, the deposit principle is there for a reason. Depositors were not risk takers and should be protected.

The same depositors who are expected to carry the can for the bad debts that Anglo and the builder/developers are party too.

noodler

ei.sdraob wrote: »

we had many threads discussing many alternatives, hell even complete nationalisation of all the banks involved would have been a better option dare i say (which is where we endedup anyways, and paid 10x more for some banks than they are worth)

Exactly.

Nationalisation internationally has some drawbacks with regards perception but I think the positives would have outweighed the negative.

At the very least the taxpayer would have taken the reward (as well as the risk). As was, they just take the risk in AIB and BOI.

ei.sdraob wrote: »

not a joke, Anglo have increased their depositor based, by offering best savings rate for long time now and a massive advertising campaign
hell there is even an advert at the bottom of this page

I was certain the figure on Anglo's deposits fell between the 2008-2009 accounts. I can't speak for what they are on a more frequent basis.

However, I am perfectly happy if they manage to get more deposits - surely it can only help their overall position?

thebman

douglashyde wrote: »

The majority of people here seem to have a big problem with NAMA.

My question would be what is the alternative?

For example, if the Govt only guaranteed deposits and not bondholders, how do you think that would of reflected on Ireland International image?

Do you think people would have been less willing to invest in Irish bonds for example?

Bondholders aren't emotional and don't hold grudges if they are smart bondholders.

If they make poor investment choices they did exactly that.

Why do you think the Irish tax payer should pay because they made a bad investment?

We are better off without the kind of investors that hold grudges TBH.

The real reason bond holders were bailed IMO was because of pension funds invested in our banks by Irish pension funds. This massive exposure would have crippled many peoples pension funds and the government didn't allow it as those people vote and young people don't.

Ireland ate its children's financial future the day it guaranteed those bondholders.

noodler

Laminations wrote: »

Has any other country seen a deterioration in sovereign credit ratings based solely on a private bank going to the wall? Did America after Lehmans or UK after Northern Rock?

You ahve to recognise there are completely different rules for us than there are for the UK and the States.

That said, I don't know for sure.

Laminations wrote: »

I believe some government intervention was necessary for our less diseased banks but including Anglo drags the whole thing down and it doesn't penalise those bondholders who had a choice in investing in Irish banks and chose risky Anglo - out of greed rather than prudence

Exactly, Anglo's should only have had its depositors and ECB money backed (imo). It doesn't really change anything going forard though.

noodler

thebman wrote: »

Bondholders aren't emotional and don't hold grudges if they are smart bondholders.

If they make poor investment choices they did exactly that.

Why do you think the Irish tax payer should pay because they made a bad investment?

We are better off without the kind of investors that hold grudges TBH.

The real reason bond holders were bailed IMO was because of pension funds invested in our banks by Irish pension funds. This massive exposure would have crippled many peoples pension funds and the government didn't allow it as those people vote and young people don't.

Ireland ate its children's financial future the day it guaranteed those bondholders.

Aye. Empirical experience shows that investors get over it fairly quickly (as I am sure you have all heard McWilliams ram home on a forthnightly basis).

thebman

noodler wrote: »

Aye. Empirical experience shows that investors get over it fairly quickly (as I am sure you have all heard McWilliams ram home on a forthnightly basis).

Well I don't need McWilliams to tell me that somebody that invests on something and has it go sour does not really expect the state to compensate them.

I wouldn't expect to be compensated so why would a bondholder?

ei.sdraob

sigh

50 billion being mentioned on Frontline when NAMA is factored in

lmimmfn

and to think lehman brothers needed less that Anglo got to stay afloat back then, i mean in comparison which would you prefer to stay alive? haha

maninasia

thebman wrote: »

Well I don't need McWilliams to tell me that somebody that invests on something and has it go sour does not really expect the state to compensate them.

I wouldn't expect to be compensated so why would a bondholder?

There's a few reasons the govt. played it like this

1) to default would have been to admit abject failure (ironically it would clean up the situation faster and be fairer though)

2) their buddies and themselves (many TDs and councillors have multiple properties) would lose out on their investments, with NAMA they can dream of reinflating property and not losing out (or at least not losing out as much)

3) they don't know what they are doing and they truly believed this was the best option

4) true to form they think they think that throwing bags of money that can be 'paid off' at a later date is always a preferable option than facing the music now ...let it be somebody elses' problem


The fact is Irish people are very conservative, not risk takers, most people (public/govt) looked on a default as a terrifying thing. They didn't want to face the music so they will use any means neccessary, this was abetted by large parts of the public...fear of the unknown.

maninasia

douglashyde wrote: »

The majority of people here seem to have a big problem with NAMA.

My question would be what is the alternative?

For example, if the Govt only guaranteed deposits and not bondholders, how do you think that would of reflected on Ireland International image?

Do you think people would have been less willing to invest in Irish bonds for example?

Ireland's international image is damaged already. Even if it was damaged even more badly you could take the pain for a year or two and the situation would turn around much more quickly, with the people who gambled rightly losing the most. Yes it would be more expensive to buy bonds but probably the ECB would step in just like as in Greece. Remember Ireland has a much stronger economy than Greece overall..much better prospects.
Once the ECB shored us up we'd be back in action fairly quickly.