Merril Lynch said irish Banks taking huge risks 6 months before the bank guarantee

ArtSmart

Announced on prime Time tonight.

Merrill Lynch issued a report stating Irish banks were taking huge risks which could cause a meltdown - 6 months before the irish bank guarantee.

a day later they removed the full report and issued a reduced, less critical report - though still damning.

worth checking the rte player, bout half way into the program.

insane stuff.

Edit. below is an article describing the story from Vanity Fair. thanks to lostinkildare

wrote:

The bank analyst who had been most prescient and interesting about the Irish banks worked for Merrill Lynch. His name was Philip Ingram. In his late 20s, and a bit quirky—at the University of Cambridge he had studied zoology—Ingram had done something original and useful: he’d shined a new light on the way Irish banks lent against commercial real estate.

The commercial-real-estate loan market is generally less transparent than the market for home loans. Deals between bankers and property developers are one-offs, on terms unknown to all but a few insiders. The parties to any loan always claim it is prudent: a bank analyst has little choice but to take them at their word. But Ingram was skeptical of the Irish banks. He had read Morgan Kelly’s newspaper articles and even paid Kelly a visit in his university office. To Ingram’s eyes, there undoubtedly appeared to be a vast difference between what the Irish banks were saying and what was really happening. To get at it he ignored what they were saying and went looking for knowledgeable insiders in the commercial-property market. He interviewed them, as a journalist might. On March 13, 2008, six months before the Irish real-estate Ponzi scheme collapsed, Ingram published a report, in which he simply quoted verbatim what British market insiders had told him about various banks’ lending to commercial real estate. The Irish banks were making far riskier loans in Ireland than they were in Britain, but even in Britain, the report revealed, they were the nuttiest lenders around: in that category, Anglo Irish, Bank of Ireland, and A.I.B. came, in that order, first, second, and third.

For a few hours the Merrill Lynch report was the hottest read in the London financial markets, until Merrill Lynch retracted it. Merrill had been a lead underwriter of Anglo Irish’s bonds and the corporate broker to A.I.B.: they’d earned huge sums of money off the growth of Irish banking. Moments after Phil Ingram hit the Send button on his report, the Irish banks called their Merrill Lynch bankers and threatened to take their business elsewhere. The same executive from Anglo Irish who had called to scream at Morgan Kelly called a Merrill research analyst to scream some more. Ingram’s superiors at Merrill Lynch hauled him into meetings with in-house lawyers, who toned down the report’s pointed language and purged it of its damning quotes from market insiders, including its many references to Irish banks. And from that moment everything Ingram wrote about Irish banks was edited, and bowdlerized by Merrill Lynch’s lawyers. At the end of 2008, Merrill fired him.
http://www.vanityfair.com/business/f...?currentPage=1

tommyboy2222

You shouldn't really be depending on Prime Time
for anything relating to politics or anything that could be critical of FF really.


http://www.politics.ie/economy/149815-merrill-lynch-september-2008-bank-guarantee.html

ArtSmart

tommyboy2222 wrote: »

You shouldn't really be depending on Prime Time
for anything relating to politics or anything that could be critical of FF really.


http://www.politics.ie/economy/149815-merrill-lynch-september-2008-bank-guarantee.html

does it mention the prev report released before the Irish govt hired them to lie write a report?

ArtSmart

http://investmentwatchblog.com/according-to-bloomberg-bondholders-of-senior-debt-including-bonds-formerly-guaranteed-by-the-government-will-face-write-offs-of-about-41/

even Bloomberg getting into the act ...

suggesting bondholders (not ours, however :rolleyes:) be burned

macannrb

tommyboy2222 wrote: »

You shouldn't really be depending on Prime Time
for anything relating to politics or anything that could be critical of FF really.

here here

I think the answer to why the turn around is because they get more money for lying for the government then for writing reports which they can tell their clients about in private anyway

ei.sdraob

Didnt they give advise to the government during the banking crisis only to be ignored?

20Cent

ei.sdraob wrote: »

Didnt they give advise to the government during the banking crisis only to be ignored?

They advised the Bailout. Of course the bondholders were also ML customers so their "advice" was totally impartial :rolleyes: Then they charges us 7 million for it.

LostinKildare

ArtSmart wrote: »

Announced on prime Time tonight.

Merrill Lynch issued a report stating Iish banks were taking huge risks, on property that the Irish banks did not fully comprehend.

a day later they removed the full report and issued a reduced, less critical report - though still damning.

worth checking the rte player, bout half way into the program.

insane stuff.

This is detailed in the Michael Lewis story on Ireland in March's Vanity Fair:

The bank analyst who had been most prescient and interesting about the Irish banks worked for Merrill Lynch. His name was Philip Ingram. In his late 20s, and a bit quirky—at the University of Cambridge he had studied zoology—Ingram had done something original and useful: he’d shined a new light on the way Irish banks lent against commercial real estate.

The commercial-real-estate loan market is generally less transparent than the market for home loans. Deals between bankers and property developers are one-offs, on terms unknown to all but a few insiders. The parties to any loan always claim it is prudent: a bank analyst has little choice but to take them at their word. But Ingram was skeptical of the Irish banks. He had read Morgan Kelly’s newspaper articles and even paid Kelly a visit in his university office. To Ingram’s eyes, there undoubtedly appeared to be a vast difference between what the Irish banks were saying and what was really happening. To get at it he ignored what they were saying and went looking for knowledgeable insiders in the commercial-property market. He interviewed them, as a journalist might. On March 13, 2008, six months before the Irish real-estate Ponzi scheme collapsed, Ingram published a report, in which he simply quoted verbatim what British market insiders had told him about various banks’ lending to commercial real estate. The Irish banks were making far riskier loans in Ireland than they were in Britain, but even in Britain, the report revealed, they were the nuttiest lenders around: in that category, Anglo Irish, Bank of Ireland, and A.I.B. came, in that order, first, second, and third.

For a few hours the Merrill Lynch report was the hottest read in the London financial markets, until Merrill Lynch retracted it. Merrill had been a lead underwriter of Anglo Irish’s bonds and the corporate broker to A.I.B.: they’d earned huge sums of money off the growth of Irish banking. Moments after Phil Ingram hit the Send button on his report, the Irish banks called their Merrill Lynch bankers and threatened to take their business elsewhere. The same executive from Anglo Irish who had called to scream at Morgan Kelly called a Merrill research analyst to scream some more. Ingram’s superiors at Merrill Lynch hauled him into meetings with in-house lawyers, who toned down the report’s pointed language and purged it of its damning quotes from market insiders, including its many references to Irish banks. And from that moment everything Ingram wrote about Irish banks was edited, and bowdlerized by Merrill Lynch’s lawyers. At the end of 2008, Merrill fired him.
http://www.vanityfair.com/business/features/2011/03/michael-lewis-ireland-201103?currentPage=1

Sand

@20 Cent

They advised the Bailout. Of course the bondholders were also ML customers so their "advice" was totally impartial Then they charges us 7 million for it.

They actually didnt advise the bailout: they said it was an option but that a state guarantee of the entire banking system would 'almost certainly negatively impact the State's sovereign credit rating and raise issues as to its credibility'.

Merrill Lynch qualified their advice:

- They were only "in the game" for 48 hours
- Their analysis was based on conversations with PWC, Goldman Sachs and "limited" conversations with the MoF and IFSRA.
- They hadnt spoken to any of the Irish bank management
- The scope of their review had expanded from just Anglo and Irish Nationwide within the 48 hours.

Essentially they were saying "You know your own domestic banks better than we do - but all other things being equal, these are your options".

The government heard what they wanted to hear, and ignored the warnings Merrill Lynch provided. It wasnt Merrill Lynch wot done it. Whilst the fate of the Merrill Lynch analysis 6 months earlier is poignant ("Shure no one could have seen this coming...") it was the financial regulator who should have been able to tell the government just what the problem with the banks was, so theyd know what solution Merrill Lynch examined was the most suitable.

Mr Cowen has insisted that the bank guarantee decision was the right one, and he stood over it.

He said Merrill Lynch had put forward a range of options and the Government had to choose the best one.

The Government chose the worst one.

funnyname

Sand wrote: »

- They were only "in the game" for 48 hours
- Their analysis was based on conversations with PWC, Goldman Sachs and "limited" conversations with the MoF and IFSRA.
- They hadnt spoken to any of the Irish bank management
- The scope of their review had expanded from just Anglo and Irish Nationwide within the 48 hours.

So they got paid €7m for 2 days work?

Sand

Essentially, yeah.

ArtSmart

LostinKildare wrote: »

This is detailed in the Michael Lewis story on Ireland in March's Vanity Fair:

wrote:

The bank analyst who had been most prescient and interesting about the Irish banks worked for Merrill Lynch. His name was Philip Ingram. In his late 20s, and a bit quirky—at the University of Cambridge he had studied zoology—Ingram had done something original and useful: he’d shined a new light on the way Irish banks lent against commercial real estate.

The commercial-real-estate loan market is generally less transparent than the market for home loans. Deals between bankers and property developers are one-offs, on terms unknown to all but a few insiders. The parties to any loan always claim it is prudent: a bank analyst has little choice but to take them at their word. But Ingram was skeptical of the Irish banks. He had read Morgan Kelly’s newspaper articles and even paid Kelly a visit in his university office. To Ingram’s eyes, there undoubtedly appeared to be a vast difference between what the Irish banks were saying and what was really happening. To get at it he ignored what they were saying and went looking for knowledgeable insiders in the commercial-property market. He interviewed them, as a journalist might. On March 13, 2008, six months before the Irish real-estate Ponzi scheme collapsed, Ingram published a report, in which he simply quoted verbatim what British market insiders had told him about various banks’ lending to commercial real estate. The Irish banks were making far riskier loans in Ireland than they were in Britain, but even in Britain, the report revealed, they were the nuttiest lenders around: in that category, Anglo Irish, Bank of Ireland, and A.I.B. came, in that order, first, second, and third.

For a few hours the Merrill Lynch report was the hottest read in the London financial markets, until Merrill Lynch retracted it. Merrill had been a lead underwriter of Anglo Irish’s bonds and the corporate broker to A.I.B.: they’d earned huge sums of money off the growth of Irish banking. Moments after Phil Ingram hit the Send button on his report, the Irish banks called their Merrill Lynch bankers and threatened to take their business elsewhere. The same executive from Anglo Irish who had called to scream at Morgan Kelly called a Merrill research analyst to scream some more. Ingram’s superiors at Merrill Lynch hauled him into meetings with in-house lawyers, who toned down the report’s pointed language and purged it of its damning quotes from market insiders, including its many references to Irish banks. And from that moment everything Ingram wrote about Irish banks was edited, and bowdlerized by Merrill Lynch’s lawyers. At the end of 2008, Merrill fired him.
http://www.vanityfair.com/business/f...?currentPage=1

THERE IT IS FOLKS.

AS GAME OVER AS IT GETS.

THIS STRONGLY INDICATES THAT THE BANKS/MERRILL LYNCH WERE FULLY AWARE OF THE SITUATION.

COULD THE GOVT REALLY NOT HAVE BEEN AWARE OF THE SAME?


Thanks for that Lostinkildare.