The Legacy of Brian Lenihan

tweedledee

Anglo had no ATM's,most of their clients were wealthy people,they didnt give loans to Joe Soap so why were they protected??????and protected well.
85 TD's,along with other wealthy business people had accounts in Anglo.
Do you think that made Anglo a priority??

yosser hughes

DexyDrain wrote: »

If it's true, stick around and make your point.

Sigh!You are quoting Mr.Honohans report like it has credibility and independence. It's laughable:D:D
I would stick around and debate with someone who actually had a mind of their own.You on the other hand? Nah!:p

yosser hughes

later10 wrote: »

Can you look back into your tea cups, Madame Diogenes, and tell us what our status would be without a banking sector, and further what the implications of no bank guarantee might have been for household savers and the average worker?

Oh and the lottery numbers while youre at it.

jaysus! another one! :rolleyes:

Di0genes

later10 wrote: »

Can you look back into your tea cups, Madame Diogenes, and tell us what our status would be without a banking sector, and further what the implications of no bank guarantee might have been for household savers and the average worker?

Oh and the lottery numbers while youre at it.

There's a guarantee of savings in Irish banks and guarantee of bondholders in Irish banks.

You do understand the difference?

DexyDrain

yosser hughes wrote: »

Sigh!You are quoting Mr.Honohans report like it has credibility and independence. It's laughable:D:D
I would stick around and debate with someone who actually had a mind of their own.You on the other hand? Nah!:p

Don't be afraid, it really is my own mind. I had it checked last year. You obviously haven't read the Honohan report, would I be right? Who do you believe? Just want to get a measure of your insight.

DexyDrain

Di0genes wrote: »

There's a guarantee of savings in Irish banks and guarantee of bondholders in Irish banks.

You do understand the difference?

You do know what Bank Capital Ratio is, don't you?

tweedledee

God the Irish have no idea about banks or money,probably why my accountant is British.

K-9

The very reason Anglo is costing us soooooooooooooo much is because it was systemic and contagious. It became far too big for its boots, saying it shouldn't is pointless, it did with it's billions of profits.

In other words, THE WORST CASE scenario came true.

My problem is when this became clear and became clear pretty quickly after the guarantee, Anglo should have been dealt with quickly, definitely not sending a business plan into Brussels that was rejected and THEN sending a revised one in!

Personally I think the Govt. and Lenihan thought they'd come up with some magic solution, the main proponent of which was McWilliams with not much evidence otherwise and when it back fired, there was no quick fix.

Di0genes

DexyDrain wrote: »

Tell me how NAMA works, as you understand it.

NAMA buys property development loans from Irish Banks in return for Irish Government Loans.

The guarantee prevented the closure of the banks within 24-48 hours. If you keep your gold bullion stashed in the garden pond, that's no problem. Read the Honohan report.

I have read it. There's a difference between guaranteeing the savings in Irish Banks, and guaranteeing the people who gambled on Irish banks.

DexyDrain

Di0genes wrote: »

NAMA buys property development loans from Irish Banks in return for Irish Government Loans.






I have read it. There's a difference between guaranteeing the savings in Irish Banks, and guaranteeing the people who gambled on Irish banks.

Without bondholders, the banks do not meet capital adequacy ratios (why would they pay these investors interest at all if they didn't need the cash??) if the banks do not meet capital adequacy ratios, the taxpayer has to put even more money in or the bank is dead, dodo, gone. Do you want all this private funding as a crutch, or should we have closed a few hospitals and schools?

tweedledee

NAMA plans involve a huge rise in property prices or we doubly screwed.
Its very basic,a disaster of an idea,again to protect the messed up wealthy,by guessing prices will rise,its all gone Pete tong.

Di0genes

DexyDrain wrote: »

You do know what Bank Capital Ratio is, don't you?

Yes I do. And I understand that your claim about banking in Ireland falling apart and how wages not getting paid is absurd when you talk about Anglo.

You're making two claims. That we needed to protect Anglo otherwise peoples wages wouldn't have gotten paid. What you fail to understand is that you're not talking to imbeciles. Anglo wasn't a bank that was involved in liquidity. Had the government refused to bail out Anglo people still would have been paid and employers would have cash.

tweedledee

God this tread is mind numbing.ciao.

later12

Di0genes wrote: »

There's a guarantee of savings in Irish banks and guarantee of bondholders in Irish banks.

You do understand the difference?

I undertstand that depositors are on an equal legal footing as senior bondholders, yes.

Nobody is suggesting that there should have been a guarantee for junior debt. But commercial deposits? Yep. Personal deposits? Yep. Senior bonds - by default - yep.

So go ahead - back into your teacups - what would the ramifications of burning the banking sector be?

later12

Di0genes wrote: »

Anglo wasn't a bank that was involved in liquidity.

Do you even know what you are talking about

Di0genes

DexyDrain wrote: »

Without bondholders, the banks do not meet capital adequacy ratios (why would they pay these investors interest at all if they didn't need the cash??)

Bondholders are gamblers. They aren't entitled to anything.

if the banks do not meet capital adequacy ratios, the taxpayer has to put even more money in or the bank is dead, dodo, gone. Do you want all this private funding as a crutch, or should we have closed a few hospitals and schools?

You're making this overly simplistic, a claim you happily throw at those who disagree with you.

You can't have it both ways.

K-9

Di0genes wrote: »

Yes I do. And I understand that your claim about banking in Ireland falling apart and how wages not getting paid is absurd when you talk about Anglo.

You're making two claims. That we needed to protect Anglo otherwise peoples wages wouldn't have gotten paid. What you fail to understand is that you're not talking to imbeciles. Anglo wasn't a bank that was involved in liquidity. Had the government refused to bail out Anglo people still would have been paid and employers would have cash.

Was Anglo some sort of standalone bank in the middle of nowhere?

Not exposed to AIB, BOI, PTSB or the Irish Central Bank?

Di0genes

later10 wrote: »

Do you even know what you are talking about

Wow what a eloquent and well thought out rebuttal.

Anglo wasn't a bank in which people drew down their paycheck from. The suggestion that the entire Irish banking sector would collapse if we didn't guaranteed Anglo's bondholders completely is absurd

later12

Di0genes wrote: »

Bondholders are gamblers. They aren't entitled to anything.

Senior bondholders enjoy a pari passu status to depositors.

I cannot help but think this conversation happens in the *What happened????* thread. Seems to be a lot of confusion about some basic events.

DexyDrain

tweedledee wrote: »

NAMA plans involve a huge rise in property prices or we doubly screwed.
Its very basic,a disaster of an idea,again to protect the messed up wealthy,by guessing prices will rise,its all gone Pete tong.

A recent analysis:

NAMA just needs a blended average increase of 12% in prices to break even at a gross profit level.

http://namawinelake.wordpress.com/2011/02/21/nama%E2%80%99s-impairment-loss-for-2010-likely-to-be-billions-of-euros/

12% blended average increase over 10 years is not 'huge' by anyones measure.

beeftotheheels

later10 wrote: »

I undertstand that depositors are on an equal legal footing as senior bondholders, yes.

Nobody is suggesting that there should have been a guarantee for junior debt. But commercial deposits? Yep. Personal deposits? Yep. Senior bonds - by default - yep.

So go ahead - back into your teacups - what would the ramifications of burning the banking sector be?

You are so missing the point. He made a mistake so the only possible comparable is the "non-mistake-making" world. Say that there were 5 possible outcomes in September 2008, 1 good, 1 taken and 3 other bad ones, the only possible comparable right now is the good one, not the three other bad/ worse ones!

Di0genes

later10 wrote: »

I undertstand that depositors are on an equal legal footing as senior bondholders, yes.

Nobody is suggesting that there should have been a guarantee for junior debt. But commercial deposits? Yep. Personal deposits? Yep. Senior bonds - by default - yep.

So go ahead - back into your teacups - what would the ramifications of burning the banking sector be?

I'm not suggesting some kind of SF esque burning all bond holders but there's a reason why the rest of world is staring at Ireland in blind horror.

later12

Di0genes wrote: »

Anglo wasn't a bank in which people drew down their paycheck from. The suggestion that the entire Irish banking sector would collapse if we didn't guaranteed Anglo's bondholders completely is absurd

Please... continue... do you smell that? Quantitative analysts and risk managers all around the continent are burning their programs and their textbooks as you type...

help, I am having an epiphany. The meaning of systemic risk has been changed!!!!!!!!!!!!!

K-9

I've got to love the "but Irish banks aren't Irish" line.

One thing everybody should have learned from the crisis is yes, the markets do view banks as nationalities! Anglo would have affected "Irish banks", whether we like to pretend it wouldn't or not.

DexyDrain

Di0genes wrote: »

Yes I do. And I understand that your claim about banking in Ireland falling apart and how wages not getting paid is absurd when you talk about Anglo.

You're making two claims. That we needed to protect Anglo otherwise peoples wages wouldn't have gotten paid. What you fail to understand is that you're not talking to imbeciles. Anglo wasn't a bank that was involved in liquidity. Had the government refused to bail out Anglo people still would have been paid and employers would have cash.

I never assumed I was talking to imbeciles, just people who don't know an awful lot about banking, global economics, what systemic means, that kind of thing.
Ireland has relied very, very heavily on our own domestic banks, we have very few foreign banks trading here and those that could got out. Do you fancy bartering spuds for haircuts? Letting Anglo fall would have wiped out any possible source of affordable funding, from the EU or the markets.

later12

DexyDrain wrote: »

I never assumed I was talking to imbeciles, just people who don't know an awful lot about banking, global economics, what systemic means, that kind of thing.

The objectionable thing is that nobody needs a degree in any of these things to understand their meaning. You dont need to have studied Junior Certificate Business to comprehend the crisis. You need a few hours to kill, and an average grasp of the English language.

I cannot help but think that the most unreasonable and trenchant opposition to some of our policies have not been down to a lack of understanding at all - but an unwillingness.

Of course, unwillingness to understand another viewpoint is something we should all be wary of. But some things are just so stark, in black and white, like the reason why a bank might be systemic, the reason why we have to observe the law on distributing haircuts, the potential downside of destroying a banking system, or kicking out the IMF, that it really is difficult to see how barefaced opposition to these things can be reasonably advanced.

Of course there are grey areas - there always are - but I do not see burning the banking sector as being a grey area.

DexyDrain

Di0genes wrote: »

Bondholders are gamblers. They aren't entitled to anything.




You're making this overly simplistic, a claim you happily throw at those who disagree with you.

You can't have it both ways.

Seriously, how complicated do you have to make this to get it to work? Bondholders are a source of funding for banks to ensure they keep their capital ratios steady while having maximum flexibility with deposit funds and loans etc. If a bank does not meet it's capital adequacy ratio, it is not fit to trade. Deposits were leaving the banks all summer in 2008, making bonds even more important, not less.

It might interest you to know that a very large chunk of bonds are investments made after the guarantee, these then were not gamblers. They know what the Irish government said it would stand over.

Pal

gerryo777 wrote: »

Pathetic, cookie monster. Hope it makes you feel better now you've spewed your venom!!

Thanks.

This person lets himself or herself down.

why does boards.ie permit this rubbish ?

Pal

later10 wrote: »

Senior bondholders enjoy a pari passu status to depositors.

.

Refreshing to find somebody who actually knows what they are talking about.

Sadly there's a lot of ill informed people here spouting pathetic nonsense and that in itself says a lot about where we are now.

Brian Lenihan went to great length to understand how finance works. Plenty here haven't got a scooby do.

Scofflaw

DexyDrain wrote: »

Seriously, how complicated do you have to make this to get it to work? Bondholders are a source of funding for banks to ensure they keep their capital ratios steady while having maximum flexibility with deposit funds and loans etc. If a bank does not meet it's capital adequacy ratio, it is not fit to trade. Deposits were leaving the banks all summer in 2008, making bonds even more important, not less.

It might interest you to know that a very large chunk of bonds are investments made after the guarantee, these then were not gamblers. They know what the Irish government said it would stand over.

I think you'll find that in the black and white world, those are 'parasites', because they knew they'd be getting a return "at our expense". 'Twas the other ones were 'gamblers', but all bondholders are bad.

cordially,
Scofflaw