4 Billion left in the NPRF, David Mc Williams nearly fell off his chair...

HellFireClub

If anyone was watching the comedy show on the FrontLine last night that passed for a political debate, it has emerged that where we had 22 Billion Euro in the National Pension Reserve Fund last January 2010, we now have barely over 4 Billion Euro in it 12 months later come January 2011.

I was following David Mc Williams tweeting on this after Michael Martin made the comment that there was only 4 Billion left in the NPRF and I based on the tweets, I had a picture in my head of David Mc Williams nearly falling off his chair in alarm and his tweets are there to underline his sense of alarm that the government have been using this pile of cash to bail out the banks and the fund is now pretty close to exhausted, relative to what was in the fund this time last year...

So, we have what is without doubt the most credible economist on this island finding himself in a state of utter disbelief that this money that was being used as a buffer to run the country, has been almost complelely diminished to keep the Irish basketcase banks alive, while the ECB have also been forklifting pallets of cash into Irish banks...

So I'm wondering how long do we have left before the game is up, given that we have managed to relieve ourselves of 18 Billion Euro of money in the NPRF in a 12 month period, which suggests that we are burning through this fund at 4.5 Billion Euro a business quarter, which gives us 3-4 months left of cash in this fund, after which we are dependent on external organisations for money to turn the lights on in the country???

I'm no economist but I don't see another pile of cash lying around that we can tip away at???

later12

Don't be so eager to buy into David McWilliam's apparent incredulity. His career depends on his media image.

As he is an economist (although it doesn't take an economist to perform basic arithmetic), and as one commenting on and analysing the Irish crisis, McWilliams ought to have known, and probably did know, how much is left in the NPRF after bank rescues and recapitalisation.

In fact, if the funds were to be required urgently, they would probably come out at a little less than what is 'officially' in there but I'll leave it to David McWilliams to explain and express his shock at that.

HellFireClub

later10 wrote: »

Don't be so eager to buy into David McWilliam's apparent incredulity. His career depends on his media image.

As he is an economist (although it doesn't take an economist to perform basic arithmetic), and as one commenting on and analysing the Irish crisis, McWilliams ought to have known, and probably did know, how much is left in the NPRF after bank rescues and recapitalisation.

In fact, if the funds were to be required urgently, they would probably come out at a little less than what is 'officially' in there but I'll leave it to David McWilliams to explain and express his shock at that.

Well it seems to me that he has been the only person in this country to see through the rubbish and the spin and the absolute crap and say it like it actually was, for that reason alone he has my good opinion.

later12

That's fine. I realise that many people feel that way I'm simply saying that not only is David McWilliams a decent economist (he is), he's actually also an excellent businessman. As such he knows his market.

I have no doubt that he was perfectly aware how much was in the NPRF, and that he really didn't fall off his chair. But for many people, for various reasons, his twittering appeals to them.

HellFireClub

later10 wrote: »

That's fine. I realise that many people feel that way I'm simply saying that not only is David McWilliams a decent economist (he is), he's actually also an excellent businessman. As such he knows his market.

I have no doubt that he was perfectly aware how much was in the NPRF, and that he really didn't fall off his chair. But for many people, for various reasons, his twittering appeals to them.

Yeah and when there was an absolute KILLING to be made here in property, he didn't get behind the bullsh*t cheerleading and property pushing that his peers such as the likes of Dan Mc Loughin and Austin Hughes were getting very hansomely paid to put their shoulder to...

I think you are confusing Mc Williams with the kind of people that he has been trying to warn us about for many years, however that's your own view that you are entitled to.

Scofflaw

HellFireClub wrote: »

Well it seems to me that he has been the only person in this country to see through the rubbish and the spin and the absolute crap and say it like it actually was, for that reason alone he has my good opinion.

Given that people here knew we were spending down the NPRF, it really wouldn't say a lot for McWilliams if his surprise were genuine - and if it isn't, it doesn't say a lot for him either.

cordially,
Scofflaw

Sand

Well, its a good thing we wont have any pensions to cover in 20 years so we wont need the money :rolleyes:

Even focusing only on the short term, the NPRF was literally a critical strategic asset which gave us some room to make policy. They have pissed it away on the stupidest set of policies the financial crisis has seen.

We're utterly at the mercy of the ECB, Sarkozy and Merkel. If theres any renegotiation the Irish delegation will be left to wait outside until the terms of surrender are ready for them to sign. I dont know about David McWilliams, but Im at the point where Fianna Fail needs to be outlawed as a subversive criminal organisation - government this consistently incompetent cant be anything other than an organised conspiracy to destroy the state.

later12

HellFireClub wrote: »

Yeah and when there was an absolute KILLING to be made here in property, he didn't get behind the bullsh*t cheerleading and property pushing that his peers such as the likes of Dan Mc Loughin and Austin Hughes were getting very hansomely paid to put their shoulder to...

I think you are confusing Mc Williams with the kind of people that he has been trying to warn us about for many years, however that's your own view that you are entitled to.

I'm not sure why you are defending an argument which nobody is making, i.e. that of the property industry. Like I said he knows his market.

Anyway, to get back to the point, I would also point out that ireland does not rely on the NPRF to run the country, we rely on taxes and external borrowing. It was always the case. All that has really happened in relation to that is that we have a new lender who, unlike sovereign wealth funds and other bond investors, have actually put their lending requirements down on printed paper instead of having them laid down by implication.

Anonymous1987

HellFireClub wrote: »

Well it seems to me that he has been the only person in this country to see through the rubbish and the spin and the absolute crap and say it like it actually was, for that reason alone he has my good opinion.

David McWilliams is the spin. There is far more credible commentary than McWilliams. Karl Whelan, Colm McCarthy and Philip Lane are more astute commentators. Take Whelan's commentary here on how long the bailout will keep us funded for, note that he was perfectly aware of how much remained the NPRF as are many people are who keep up to date on the issue.

Permabear

This post has been deleted.

femur61

Permabear wrote: »

This post had been deleted.

Adams seemed to ignore that one fact when he kept saying we don't need the loan, we've no money. If we had 19bn in the NRF last Jan now 12 months later we have 4.5bn and exactly how much did we get from the EU/IMF already and how much has the ECB already given us already. Has anybody noted how much we've actually spent in the last year from PS to banks?

chicken fingers

Morgan Kelly is probably the most credible. McWilliams is a celeb pop-economist. They started getting very popular in the USA in the 1990s and this is just an Irish take on the concept.

RichardAnd

McWilliams knows how to play the populist card and he plays it very, very well. The basic run of his articles is that the innocent and unfortunate Irish people were duped by their leaders into a bailout for the said leader's mates in the banks. I don't accept this, rather I believe the bail out was a mistake that was the result of misinformation, ill experience in economic matters and foolishness from politicians, I don't think it was anything malicious.

But of course, and this is going on a slight tangent here, a mistake like the bailout was bound to happen eventually in Ireland. How could it not when most of the government know nothing about economics until they find it under their auspice?

Taxi Drivers

The c.€4 billion is what has not been used to recapitalise the banks - AIB and BOI. It is difficult to know what the exact value of the NPRF is. The accounts published by the NTMA are not very useful in that regards.

A lot of the money in the NPRF was used to recapitalise the banks. This was done via the purchase of preference shares. There is no primary market for these and they are hard to value. In the NMTA's accounts these are valued at par, i.e. they are in the books at whatever price they were bought at. We have a couple of billion of preference shares but we know the banks are only worth a fraction of that.

The €4 billion referred to here is money held in other assets. These could be sold and the €4 billion used for 'strategic' purposes. They NPRF hasn't been wipe out - yet!!

jimmycrackcorm

Permabear wrote: »

This post had been deleted.

It totally wipes out SF economic policy as there aren't enough chips for them to play Russian roulette with now.

Nody

jimmycrackcorm wrote: »

It totally wipes out SF economic policy as there aren't enough chips for them to play Russian roulette with now.

It never was viable to some how get another 20 Bil in additional tax income from workers to replace a property tax driven boom of income instead in one year.

And the first who asks why one year the answer is simply that there would be no market to borrow any noticable cash from (and Ireland would have been happy if they could keep their old soverign debt rolling over at a ok rate after defaulting on any part of the debt).

maninasia

Scofflaw wrote: »

Given that people here knew we were spending down the NPRF, it really wouldn't say a lot for McWilliams if his surprise were genuine - and if it isn't, it doesn't say a lot for him either.

cordially,
Scofflaw

Give him the benefit of the doubt, it's certainly stunning the speed it has been used up and that only 4 billion is now left.

maninasia

Taxi Drivers wrote: »

The c.€4 billion is what has not been used to recapitalise the banks - AIB and BOI. It is difficult to know what the exact value of the NPRF is. The accounts published by the NTMA are not very useful in that regards.

A lot of the money in the NPRF was used to recapitalise the banks. This was done via the purchase of preference shares. There is no primary market for these and they are hard to value. In the NMTA's accounts these are valued at par, i.e. they are in the books at whatever price they were bought at. We have a couple of billion of preference shares but we know the banks are only worth a fraction of that.

The €4 billion referred to here is money held in other assets. These could be sold and the €4 billion used for 'strategic' purposes. They NPRF hasn't been wipe out - yet!!

So what you are saying here is there is less than 4 billion in the kitty and that it is not quickly accessible and that we can write off the rest of the money as the banks have no actual value now or even if they do find private investors they will have had their debts written down first.

Nody

maninasia wrote: »

Give him the benefit of the doubt, it's certainly stunning the speed it has been used up and that only 4 billion is now left.

Except that the spending and reduction of the fund has been publically available and other Irish economists picked up on it as it went along. I.e. either a) he's a poor economist and did not do his homework properly or b) more likely he's playing the audience with a populistic view and outrage.

Endymion

HellFireClub wrote: »

So, we have what is without doubt the most credible economist on this island...

HellFireClub wrote: »

I'm no economist but...

The first comment is directly related to the second.

ZYX

Endymion wrote: »

The first comment is directly related to the second.

Is he really an economist at this stage? Wouldn't his job description really be, broadcaster who has a degree in economics? By my rough calculations he is now 11 years as a broadcaster, journalist and panel show host, compared to 10 years working as an economist.

gbee

jimmycrackcorm wrote: »

It totally wipes out SF economic policy as there aren't enough chips for them to play Russian roulette with now.

I, for one was expecting them to use chips, and I don't think chips would fit in a revolver's chamber either, for Russian roulette. ?

whiteonion

I have never paid into a pension fund as far as I know. Pension funds are ripe for theft by politicians at any time. Confiscation of pension funds happen all the time all over the world.


Moral of the story is, don't get a pension fund.

wyndhurst

I am with Pres Obama when it comes to economists.....

He is searching for that all elusive one-handed economist. The most common answer he gets from them is "well on the one-hand x could happen but on the other hand it could be........"

My opinion is that most econimists are hoares to their paymaster - their opinion and outlook is totally tainted depending on who is paying the bills (banks, unions, ISME, universities, etc, etc).
McWilliams is a 'celebrity economist' who benefits from sensationalism. Books have to be sold you know.

HellFireClub

HellFireClub wrote: »

So, we have what is without doubt the most credible economist on this island f....................

Was he not in favour of the bank guarantee back? Of course he reckons it was a temporary guarantee, ah yes.

Solnskaya

I was hired as a pension adviser(salesman), attended the training courses etc and then went into the "field" to sell pensions. I quit after 2 weeks as I could not wilfully rip people off in my conscience, and that is what was required. The figures, as many private pensioners are now realising, simply did not add up. A freiend collected his CIF pension lump sum upon retirement, after 13 years of contributions, and was staggered at what he received. Both he and his wife rapidly abandoned their comfortable plans for their retirement. Scandalous.
Not nearly as scandalous as the rape of the NPRF - brings home why the Govt were pushing so hard for everyone to be compelled to acquire a private pension, they had plans for the money in the public pot, and those plans did not include handing it out to the deserving elderly. I firmly believe that unless you have a corporately funded mega pension, you are better using the money you would contribute for some other purpose. My sister has contributed >100K to her private pension fund, checked in the last fortnight, its value stands at <16k. Go figure.

wyndhurst

Solnskaya wrote: »

My sister has contributed >100K to her private pension fund, checked in the last fortnight, its value stands at <16k. Go figure.

Would be very interested to know what fund that is with....cause it must be the worst performing fund in the history of pensions. Do you know?

Solnskaya

Really, the worst performing fund ever?? Looked at the value of many private pension funds lately have you? I'd say it doing about average/slightly better than average. Anyway, glad yours is doing so well, or have you checked lately? Probably performing a lot better than those funds that invested heavily in the Irish Banking sector with their pensioners cash.

wyndhurst

Solnskaya wrote: »

Really, the worst performing fund ever?? Looked at the value of many private pension funds lately have you? I'd say it doing about average/slightly better than average. Anyway, glad yours is doing so well, or have you checked lately? Probably performing a lot better than those funds that invested heavily in the Irish Banking sector with their pensioners cash.

Jaysus, it was a simple question.

BTW....I know a lot about private pension funds. From your answer, you clearly know shiite all about it.
The vast majority of funds have had a very good 2010 and are running on average at zero return for the past 5 years. That is why I asked about the structure of your sisters pension.


Anyway, it's clear you have'nt a clue and are just caught up in the usual populist BS.

Solnskaya

wyndhurst wrote: »

Jaysus, it was a simple question.

BTW....I know a lot about private pension funds. From your answer, you clearly know shiite all about it.
The vast majority of funds have had a very good 2010 and are running on average at zero return for the past 5 years. That is why I asked about the structure of your sisters pension.


Anyway, it's clear you have'nt a clue and are just caught up in the usual populist BS.

And I am going to presume that you are being serious here. A good 2010- I hope the suckers swallow that one. You conveniently fail to mention the effects of management fees, entry fees, sales bonus amortization and Inflation, all of which would probably take a little nip out of that average 0% return. I bet you told everyone how well these were doing, by golly lads, we made almost 0%, how smart are we. I love the way your post leaps to the conclusion you are speaking to a bunch of suckers, as you probably are, there are an awful lot of pensioners, and a lot of fund managers driving very large cars back to very nice houses, on the back of their skill in regarding a 0% return as good(which it is for them-the fees flow regardless). OPM is great, isn't it, it never hurts when its lost.
Oh, and just in case, here goes-"the NPRF has been invested in strategically important systemic institutions, the better to free up the flow of capital and credit to our SME sector, thus ensuring that we retain our competitive edge and can further the national programme of export led expansion and further our goal of achieving a smart economy model, going forward. We fully expect to achieve a healthy return for the taxpayer on these funds,based upon international best practices."

The above quote has impeccable sources, it was culled in its entirety from the bull5hit bank of Solenskaya. That bank has 22 Bn bytes in reserve.

Scofflaw

Solnskaya, wyndhurst, enough of the off-topic spat, thanks.

moderately,
Scofflaw

Solnskaya

Back on=topic then. The bank recapitalisation and depletion of the NPRF are simply part of a transfer of wealth. Wether you regard this transfer as good or bad depends on your position and which side of the equation you are on. If you are a net beneficiary, it is a good thing, and to be welcomed. If you are a net contributor, it is a bad thing and to be decried. If you are either unaware of your position in the equation, or are a neutral, it is either a mystery or a non-event. Peoples opinions, and therefore their umbrage or approval/mystification/neutrality depend on their position, and all opinions offered require filtration depending on the source of that opinion, and the position in the equation of the opinion holder. Personally, I'm neutral/marginally miffed. Others may well be outraged. Others may well buy a new Yacht. Others may well be simply complict non-beneficiaries, facilitators if you like, who will therefore rationalise what they have done as best they can. FF would be facilitators, you can fill in the rest of the cast yourselves.

southsiderosie

RichardAnd wrote: »

McWilliams knows how to play the populist card and he plays it very, very well. The basic run of his articles is that the innocent and unfortunate Irish people were duped by their leaders into a bailout for the said leader's mates in the banks. I don't accept this, rather I believe the bail out was a mistake that was the result of misinformation, ill experience in economic matters and foolishness from politicians, I don't think it was anything malicious.

But of course, and this is going on a slight tangent here, a mistake like the bailout was bound to happen eventually in Ireland. How could it not when most of the government know nothing about economics until they find it under their auspice?

Sorry, but I think this is BS. "Lack of experience" should not be an excuse when it comes to economic policy. Ireland has plenty of experience with bad policies (i.e. rampant government spending and cronyism) coming to the same sorry result: economic collapse and mass emigration. Except this time around it is much much worse, since the government cannot devalue its way out of the hole.

Ireland also has experience with economic policies that work: the 1990s saw tight fiscal control, low corporate tax, and an influx of investment. Seemingly all sense went out the window with the introduction of the euro and access to cheap credit. But it is not as if a new cast of characters had just arrived on the scene; Bertie was in the inner-circle of FF in the 1990s when times were good; he just let things deviate from the relatively successful model in the name of political gain.

Finally, even if everyone in government were naifs (and they weren't), there are plenty of successful models of small countries using export-led growth as a path to prosperity. If political leaders were truly starting from scratch, then they could have looked to countries such as Denmark, Hong Kong, or South Korea for inspiration. But of course, the Irish are different, and have the magical ability to avoid the cycles of boom and bust that have plagued every other credit/commodity mad economy in modern history. :rolleyes:

femur61

Solnskaya wrote: »

And I am going to presume that you are being serious here. A good 2010- I hope the suckers swallow that one. You conveniently fail to mention the effects of management fees, entry fees, sales bonus amortization and Inflation, all of which would probably take a little nip out of that average 0% return. I bet you told everyone how well these were doing, by golly lads, we made almost 0%, how smart are we. I love the way your post leaps to the conclusion you are speaking to a bunch of suckers, as you probably are, there are an awful lot of pensioners, and a lot of fund managers driving very large cars back to very nice houses, on the back of their skill in regarding a 0% return as good(which it is for them-the fees flow regardless). OPM is great, isn't it, it never hurts when its lost.
Oh, and just in case, here goes-"the NPRF has been invested in strategically important systemic institutions, the better to free up the flow of capital and credit to our SME sector, thus ensuring that we retain our competitive edge and can further the national programme of export led expansion and further our goal of achieving a smart economy model, going forward. We fully expect to achieve a healthy return for the taxpayer on these funds,based upon international best practices."

The above quote has impeccable sources, it was culled in its entirety from the bull5hit bank of Solenskaya. That bank has 22 Bn bytes in reserve.

We're with New ireland and in 2009 we lost money on our pension but it gained upto nearly the value it was in 2010. We meet our advisor every 6 months - 1 year to go through it.

Gumbo

femur61 wrote: »

We're with New ireland and in 2009 we lost money on our pension but it gained upto nearly the value it was in 2010. We meet our advisor every 6 months - 1 year to go through it.

I have a private sector PRSA from my previous job and it has gained steadily since I started it. It's up approx 15% on my contributions, and that's with AIB Ark Life. I nearly took out one with NI but went with AIB at he last minute.

Solnskaya

Amazed really that there is so little response to this thread from economics minded folk. This is the equivalent of a family forming a budget and planning to pay bills from their current account, only to log onto internet banking and discover that all their plans are shot because they have waaay overspent and the well is almost dry. In a family, a masive row would probably follow, with recriminations and stand up arguements about who the hell spent what, when. When as a nation it happens, we get....... well, pretty much nothing. How screwed are we.

Scofflaw

Solnskaya wrote: »

Amazed really that there is so little response to this thread from economics minded folk. This is the equivalent of a family forming a budget and planning to pay bills from their current account, only to log onto internet banking and discover that all their plans are shot because they have waaay overspent and the well is almost dry. In a family, a masive row would probably follow, with recriminations and stand up arguements about who the hell spent what, when. When as a nation it happens, we get....... well, pretty much nothing. How screwed are we.

It might be because the economic-minded folk here already knew it to be the case?

cordially,
Scofflaw

lmimmfn

Well the IMF/ECB bailout stipulated that 17 billion of the pension reserve fund had to be used first and our first draw down of ECB/IMF funds was a few weeks ago( over 3.5 billion if i remember ).

So wheres the shock in this?

ilovesleep

Solnskaya wrote: »

Amazed really that there is so little response to this thread from economics minded folk. This is the equivalent of a family forming a budget and planning to pay bills from their current account, only to log onto internet banking and discover that all their plans are shot because they have waaay overspent and the well is almost dry. In a family, a masive row would probably follow, with recriminations and stand up arguements about who the hell spent what, when. When as a nation it happens, we get....... well, pretty much nothing. How screwed are we.

Its no surprise really. FF - the dirty gangsters, are still in power. I'll bet my life that 4B will be gone before the end of next week.

lmimmfn

i wonder what the money was spent on though considering the EU/IMF deal was done in October if i remember correctly and we normally borrow 15 billion a year so in 5 months we've over spent a years borrowings lol when Lenihen said we're good until May/June, looks like he was 2 years worth of borrowings out lol

Scofflaw

lmimmfn wrote: »

i wonder what the money was spent on though considering the EU/IMF deal was done in October if i remember correctly and we normally borrow 15 billion a year so in 5 months we've over spent a years borrowings lol when Lenihen said we're good until May/June, looks like he was 2 years worth of borrowings out lol

€8-9bn of it was injected into the banks as capital in January, anyway.

cordially,
Scofflaw

lmimmfn

Scofflaw wrote: »

€8-9bn of it was injected into the banks as capital in January, anyway.

cordially,
Scofflaw

do you have a link( not for proof, just for more depressing reading ), FFS this is beyond a joke at this stage

maninasia

lmimmfn wrote: »

Well the IMF/ECB bailout stipulated that 17 billion of the pension reserve fund had to be used first and our first draw down of ECB/IMF funds was a few weeks ago( over 3.5 billion if i remember ).

So wheres the shock in this?

The surprise may be the speed it is depleting. That it doesn't shock anybody that the national pension fund has now evaporated tells us all how bad things are in Ireland right now.

jimmycrackcorm

Problem solved! Gerry Adams was just on 6-1 saying the NPRF has now got €15bn in it. I guess the Northern Bank money turned up.....

jdivision

HellFireClub wrote: »

So, we have what is without doubt the most credible economist on this island finding himself in a state of utter disbelief that this money that was being used as a buffer to run the country, has been almost complelely diminished to keep the Irish basketcase banks alive, while the ECB have also been forklifting pallets of cash into Irish banks...

LOL That you David???

K-9

jimmycrackcorm wrote: »

Problem solved! Gerry Adams was just on 6-1 saying the NPRF has now got €15bn in it. I guess the Northern Bank money turned up.....

LOL

Maybe it's the €10 Billion that Lenihan has deferred until after the election, to the next Government?