NAMA -Could we still end up wealthy ??

Leiva

After bailouts , digouts , loans ...whatever you wanna call it .

Is there a chance that NAMA could actually turn around all the billions paid for toxic loans , and we could be left with some very wealthy collateral ?

Buford T Justice

Possibly, but by the time this might happen, nither you or I will be around to see it.

CCCP

I would imagine the government officials and people who run the companys being processed by Nama will still end up weatlhy.

gleep

From FF/RTE News

"Mr McDonagh said that, on the Finance Minister's request earlier in the year, NAMA had accelerated the transfers of loans without full 'due diligence' and was making an estimate of the value of these loans. "


"The report also showed that only 29% of the loans it had taken on were performing, or being re-paid in some form, at the end of June."

"The C&AG report said the amount NAMA paid was €1.7bn, or 28%, above the loans' current value on the market. This was because NAMA took into account what it estimated as the long-term value of the assets taken on."

I could go on, but to answer your question, I'd say NO

Jaysoose

Short answer is NO.

Long answer is NO.

Logic being the people that devised the plan are incapable of managing anything, nama will pay the wages of solictors and advisors for the next few years..that is all.

noodler

The discounts we have paid on the loans are relievingly higher than the 30% that was originally mooted last summer.

However, we are still looking at a huge proportion of 'land' loans which, in some cases, could be literally worthless.

There is a commercial property index (similar to the one done by the Permanent TSB /ESRI for residental housing) but the name slips my mind at the moment. Any ideas anyone?

Anyway, I doubt prices for the loans we have bought will rise sufficiently evem though we aren't relying on them to rise back to the crazy 2006 levels or anything.

Cool Mo D

The answer is not NO, it is maybe. However, this will be at least 20 years from now, depending on when the economy recovers.

In theUS, the TARP programme, which is like Nama, looks like it will make a profit. But their banks weren't in such bad shape as ours.

Laminations

Ok so lets be clear here. By NAMA maybe making a profit, do you mean they get more back than they paid for the loan? Cos that's a smokescreen. Anglo lends Carroll €400m. Carroll can't pay. NAMA buys loan for €50m, NAMA eventually sells the assets for €70m. Everybody cheer!! YAY NAMA made a profit!! Big ****ing woop we still lost €330m as the tax payers 'recapitalised' the bank making sure bondholders got paid back. It's a swindle

Permabear

This post has been deleted.

noodler

donegalfella wrote: »

This post has been deleted.

I'd settle for it simply to be self-financing tbh.

ashleey

Also don't forget that at IMF rates of 5% after 14 years you need to get back double what you paid just to break even.

noodler

Laminations wrote: »

Ok so lets be clear here. By NAMA maybe making a profit, do you mean they get more back than they paid for the loan? Cos that's a smokescreen. Anglo lends Carroll €400m. Carroll can't pay. NAMA buys loan for €50m, NAMA eventually sells the assets for €70m. Everybody cheer!! YAY NAMA made a profit!! Big ****ing woop we still lost €330m as the tax payers 'recapitalised' the bank making sure bondholders got paid back. It's a swindle

Well obviously.

But you can't have it both ways. People complained a year ago that we were going to pay really low discount to eh banks for the loans in order to reduce the amount of recapitalisation we pay the banks.

In the end (whether due to more dilligant investigation by Nama or simply outside pressures) we went the other, more transparent route of paying the loans closer to what they are worth (I say that with a worry) and then have a bigger recapitalisation.

EDIT: BTW: Its not really a smokescreen if you have been watching any domestic news source within the last year I think everbody knows that nama discount was always going to be postiively related to the amount of recapitalisation we give the banks.

Leiva

noodler wrote: »

I'd settle for it simply to be self-financing tbh.

But taken Laminations view below ...
If we spend say €90 billion buying all toxic loans and in the medium to long term manage to get back the €90 billion , then we are still down billions as the bond holder has been paid the full original amount from the public coffers

Laminations wrote: »

Ok so lets be clear here. By NAMA maybe making a profit, do you mean they get more back than they paid for the loan? Cos that's a smokescreen. Anglo lends Carroll €400m. Carroll can't pay. NAMA buys loan for €50m, NAMA eventually sells the assets for €70m. Everybody cheer!! YAY NAMA made a profit!! Big ****ing woop we still lost €330m as the tax payers 'recapitalised' the bank making sure bondholders got paid back. It's a swindle

flutered

possibly, but i am hoping santy will clear my c.c. debt.

noodler

mixednuts wrote: »

But taken Laminations view below ...
If we spend say €90 billion buying all toxic loans and in the medium to long term manage to get back the €90 billion , then we are still down billions as the bond holder has been paid the full original amount from the public coffers

As I said above.....

I thought we were talking purely about the loans NAMA is buying from the banks?

Sleepy

If the property bubble was re-inflated it might happen but we'd have bigger problems to worry about in that case tbh.

noodler

Sleepy wrote: »

If the property bubble was re-inflated it might happen but we'd have bigger problems to worry about in that case tbh.

I can't remember the figure off-hand (its in the "Business Plan") but for Nama to break even or make a profit it doesn't require property values to increase back to peak levels - it is something more modest.

Doesn't make it anymore likely mind.

noodler

Oh and one positive of paying the banks more than the loans were worth (i.e. the 30% disocunt initially mentioned) was obviously that we'd need to recapitalise them less.

But there was on other bonus if we had gone down that route - the money spent by Nama on loans (I think its going to be €33bn-ish overall) doesn't go on the national debt whereas the recapitalisation money does.

Thats just an accounting thing though - but it may have looked better for those looking in.

Fentdog84

mixednuts wrote: »

After bailouts , digouts , loans ...whatever you wanna call it .

Is there a chance that NAMA could actually turn around all the billions paid for toxic loans , and we could be left with some very wealthy collateral ?

if you have large amounts of capital sitting in offshore accounts and then buy in after the housing market hits rock bottom, then yes you will become very wealthy indeed, other than that, no.

Laminations

noodler wrote: »

Well obviously.

Yeah and the total cost to the tax payer is all that matters. Hailing NAMA as a success because it turns a profit is pointless now. If it mattered at all, then NAMA could have looked great if they bought all the bad loans for a tenner and sold the assets in a firesale for €20bn. We could all sit around and say WOW look at NAMA making a €20bn profit (give or take a tenner), we have ended up wealthy, NAMA is such a roaring success!

The bond holders should have received the same haircut that NAMA applied to the banks, and then the recapitalisation money could actually have been used to recapitalise our banks instea of recapitalising our banks bond holders

Sand

If youre a lawyer or property valuer or a banker, yeah, youll make out like a bandit.

If youre a taxpayer, no: NAMA is based on a false premise. If it was possible to make money on loans which have been poured into ghost estates and empty hotels, youd see vulture capitalists coming in to take these loans off peoples hands to extract value out of them. You have to remember, NAMA was brought to us by the same people who have consigned us to dependance on the mercy of the ECB for our survival.

Buford T Justice

gleep wrote: »

From FF/RTE News

"Mr McDonagh said that, on the Finance Minister's request earlier in the year, NAMA had accelerated the transfers of loans without full 'due diligence' and was making an estimate of the value of these loans. "


"The report also showed that only 29% of the loans it had taken on were performing, or being re-paid in some form, at the end of June."

In other news relating to Nama, it emerged today that the banks have deliberately and systematically giving Nama misleading information in order to secure the maximum value for the loans being transferred.


Seriously, they have learned nothing from when the banks lied about the state of their liquidity and the extent of their loans. Did the Nama officials just sit there and go "Aah, I couldn't be bothered reading that, here's you're cheque"

Or maybe it was something along the lines of : "Thats Jonno, who votes FF and is a friend of mine.... maybe one more zero here wouldn't hurt"

ei.sdraob

Fingers McGee wrote: »

In other news relating to Nama, it emerged today that the banks have deliberately and systematically giving Nama misleading information in order to secure the maximum value for the loans being transferred.

Puts on an "I told you so" T-Shirt

xkariex

Not a hope were screwed for generations to come !! Shur the banking system is still rotten to the core. If we were to get better and the banks they need to change th e structure right down to middle management !!

xkariex

Sleepy wrote: »

If the property bubble was re-inflated it might happen but we'd have bigger problems to worry about in that case tbh.

No way should the property bubble be allowed go to highs it went in the past ! We have to learn from our mistakes.

noodler

Laminations wrote: »

Yeah and the total cost to the tax payer is all that matters. Hailing NAMA as a success because it turns a profit is pointless now. If it mattered at all, then NAMA could have looked great if they bought all the bad loans for a tenner and sold the assets in a firesale for €20bn. We could all sit around and say WOW look at NAMA making a €20bn profit (give or take a tenner), we have ended up wealthy, NAMA is such a roaring success!

The bond holders should have received the same haircut that NAMA applied to the banks, and then the recapitalisation money could actually have been used to recapitalise our banks instea of recapitalising our banks bond holders

Well the thread was specifically about Nama.

The recapitalisation figures of €45bn+, while not irrelevant to the discussion, were not specifically what we were discussing.

Burning the bondholders sounds good I'll grant you - still don't know what would have happened effects-wise but you do wonder if it would have been any worse than this. No one being willing to lend to us or the banks at reasonable rates has happened despite our capital promises.

ei.sdraob

noodler wrote: »

Well the thread was specifically about Nama.

The recapitalisation figures of €45bn+, while not irrelevant to the discussion, were not specifically what we were discussing.

Burning the bondholders sounds good I'll grant you - still don't know what would have happened effects-wise but you do wonder if it would have been any worse than this. No one being willing to lend to us or the banks at reasonable rates has happened despite our capital promises.

Its too late to burn most bondholders, they made it for the exit already with a tidy profit.

noodler

ei.sdraob wrote: »

Its too late to burn most bondholders, they made it for the exit already with a tidy profit.

Again obviously.

The point was it is hard to imagine now, for me anyway (even in a worst case scenario), that buring bondholders would have results in consequences even more negative than the ones we are faced with.

Cool Mo D

When I say that Nama may make a profit, I of course do not mean that we are not pouring billions into the banks, never to be seen again. My point is that Nama is not being used as a backdoor bailout for the banks. We are bailing out the banks by directly giving them massive piles of cash, not through Nama.

Goldman Sachs have recently published as analysis of Nama. They say it will probably make a small profit, but it will of course pale compared to the price of recapitalising the banks.