Anybody with credible figures and definitive confirmation of better alternatives ?

Drumpot · 08-09-2010 05:32PM #1

Right so . .

None of us like a penny going into Anglo or any of the other banks. .

But, can anybody objectively discuss what has to be done without reverting to populist rants about how its ridiculous that we are pumping billions into the banks?

Do these people have definitive figures and a proper SWOT (strengths, weaknesses opportunities, threats) analysis to back up claims that there are more credible alternatives ?

I dont for a second think that everything that FF have done since Sept 2008 has been correct, but what concerns me is the wanton disreguard the people of this country seem to have for disecting facts over populist drivel they are fed from the opposition . . ie - liking to listen to what they want to hear - "Banks are bad" - "Down with that sort of thing" :rolleyes:

One way or another the Irish taxpayers would be lumped with billions to payback, directly or indirectly. I wouldnt pretend to have all the answers or all the alternatives, but what concerns me is that any information provided by any particular person has always had some sort of vested interest in giving a certain viewpoint and as such we have never had a proper debate on all the options on the table.

Is it possible for anybody to objectively look at the way things have transpired and make an objective call/recommendation based on hard facts and proper analysis ? I fear not . .:(

RichardAnd · 08-09-2010 05:42PM

It's my honest opinion that at this stage, we're committed to bailing out Anglo whether we like it or not. The blanket guarantee has tied us into this.

IrishTonyO · 08-09-2010 05:43PM

Drumpot wrote: »

Right so . .

None of us like a penny going into Anglo or any of the other banks. .

But, can anybody objectively discuss what has to be done without reverting to populist rants about how its ridiculous that we are pumping billions into the banks?

Do these people have definitive figures and a proper SWOT (strengths, weaknesses opportunities, threats) analysis to back up claims that there are more credible alternatives ?

I dont for a second think that everything that FF have done since Sept 2008 has been correct, but what concerns me is the wanton disreguard the people of this country seem to have for disecting facts over populist drivel they are fed from the opposition . . ie - liking to listen to what they want to hear - "Banks are bad" - "Down with that sort of thing" :rolleyes:

One way or another the Irish taxpayers would be lumped with billions to payback, directly or indirectly. I wouldnt pretend to have all the answers or all the alternatives, but what concerns me is that any information provided by any particular person has always had some sort of vested interest in giving a certain viewpoint and as such we have never had a proper debate on all the options on the table.

Is it possible for anybody to objectively look at the way things have transpired and make an objective call/recommendation based on hard facts and proper analysis ? I fear not . .:(

The government and the board of Anglo don't have definitive figures, so how could anyone else?

zootroid · 08-09-2010 05:54PM

RichardAnd wrote: »

It's my honest opinion that at this stage, we're committed to bailing out Anglo whether we like it or not. The blanket guarantee has tied us into this.

+1

That and nationalising it. The damage has been done. We're f*cked

SkepticOne · 08-09-2010 06:16PM

Drumpot wrote: »

I wouldnt pretend to have all the answers or all the alternatives, but what concerns me is that any information provided by any particular person has always had some sort of vested interest in giving a certain viewpoint and as such we have never had a proper debate on all the options on the table.

Here's the arguement that people have put forward in favour of the current course of action that has brought the country to its knees:

"There is no alternative...there is no alternative...there is no alternative...there is no alternative...there is no alternative...lalalala..."

And I am being charitable here. That is the best of the arguments.

There were plenty of alternatives suggested, here and elsewhere, and most of them were far better thought out than the rubbish that the government decided on of protecting foreign investors at whatever cost to those who had nothing to do with bankers and developers.

Unfortunately the time for alternatives is now past. We have to let this thing run its course.

RichardAnd · 08-09-2010 06:26PM

SkepticOne wrote: »

Unfortunately the time for alternatives is now past. We have to let this thing run its course.

Pretty much my frame of though too. Eventually, the government documents relating to all of this will become accessible to the general public and then we will be able to see what could have been done. Right now, we've chosen one path and turning back isn't an option. Posterity will be the ultimate judge of this mess.

Sadly, and I don't mean to be cynical, 50 years down the line, I wouldn't be surprised if the people of ireland view this crash as they did the great depression during the boom. An historical curiosity that can't ever happen again

SkepticOne · 08-09-2010 07:11PM

RichardAnd wrote: »

Pretty much my frame of though too. Eventually, the government documents relating to all of this will become accessible to the general public and then we will be able to see what could have been done. Right now, we've chosen one path and turning back isn't an option. Posterity will be the ultimate judge of this mess.

I don't think alternatives were ever really considered. It was crisis leading to a panicked decision leading to further crisis. There was never any understanding.

Even with NAMA that had several months in the planning, the alternatives that Peter Bacon were asked to consider was basically a continuation of guaranteeing the banks and doing nothing (which would have led to disaster) and what essentially became NAMA (which is actually leading to disaster). Nothing else was even considered and there were alternative proposals.

Now we must face the consequences.

Drumpot · 08-09-2010 08:15PM

SkepticOne wrote: »

Here's the arguement that people have put forward in favour of the current course of action that has brought the country to its knees:

"There is no alternative...there is no alternative...there is no alternative...there is no alternative...there is no alternative...lalalala..."

And I am being charitable here. That is the best of the arguments.

There were plenty of alternatives suggested, here and elsewhere, and most of them were far better thought out than the rubbish that the government decided on of protecting foreign investors at whatever cost to those who had nothing to do with bankers and developers.

Unfortunately the time for alternatives is now past. We have to let this thing run its course.

Ive never seen a definitive alternative discussed in detail . . Im serious . I agree they have been suggested, but nothing has been intricately debated . . We only ever seem to get either pro FF or Anti FF ranting here which sidesteps the issues . .

The opposition party has consistantly claimed that there were better alternatives, but even now we still dont know exactly what the correct figures are . . Whether it was FF or FG/Lab in power, none of them would have definitive information to make the RIGHT decision. With this in mind, Im just surprised that anybody (govt or opposition) were able to make so many bold predictions and assumptions on the correct choice to take.

SkepticOne · 08-09-2010 08:54PM

Drumpot wrote: »

Ive never seen a definitive alternative discussed in detail . . Im serious . I agree they have been suggested, but nothing has been intricately debated . . We only ever seem to get either pro FF or Anti FF ranting here which sidesteps the issues . .

The opposition party has consistantly claimed that there were better alternatives, but even now we still dont know exactly what the correct figures are . . Whether it was FF or FG/Lab in power, none of them would have definitive information to make the RIGHT decision. With this in mind, Im just surprised that anybody (govt or opposition) were able to make so many bold predictions and assumptions on the correct choice to take.

It is a bit rich, imo, to demand figures when the current government have gone to great lengths to ensure that the public only have very minimal access to information. It would have been far better to guarantee just deposits and let the bold holders hang. It is true that for a time, banks would not be lending due to lack of access to wholesale funds, banks are not lending now and this was one of the stated aims of NAMA. And now the cost of state borrowing is spiralling with the real possibility of default. We don't know how much the country has lost protecting bank bond investors but it is likely to run into the tens of billions.

Even FGs proposal of setting up a good bank would have been preferable to what has happened. Let the failed banks fail and let the shareholders and bond holders take the hit instead of bankrupting the state as the current plan has done.

Why do you need detailed figures (that are being kept secret) to see that the current option is the worst of any that have been proposed?

johnnyskeleton · 08-09-2010 11:27PM

Drumpot wrote: »

Is it possible for anybody to objectively look at the way things have transpired and make an objective call/recommendation based on hard facts and proper analysis ? I fear not . .:(

My views on why I opposed NAMA explained in more detail here - http://www.thepropertypin.com/viewtopic.php?p=293478#p293478

But the short answer - No. No one can give you such an analysis. The government have covered up the true extent of the banking crisis from day 1 and have, in conjunction with the banks, refused to allow any independent analysis (or even a limited access for the opposition parties) of the banks' loan books on the basis that it would breach confidentiality.

The calls that were drowned out during the whole debate were not for one solution or another, they were for letting us know the true extent of the problem.

It is quite clear as well that the reason why the government didn't want this information getting out is that they are beholden to certain parties who are customers of the banks.

johnnyskeleton · 08-09-2010 11:44PM

RichardAnd wrote: »

Right now, we've chosen one path and turning back isn't an option. Posterity will be the ultimate judge of this mess.

AAAAAAGH!

End the guarantee at the end of september, wind down Anglo right now, let the other banks stand or fall.

It's never too late to do the right thing, although most of the damage has already been done.

Liam Byrne · 08-09-2010 11:48PM

Drumpot wrote: »

Do these people have definitive figures and a proper SWOT (strengths, weaknesses opportunities, threats) analysis to back up claims that there are more credible alternatives ?

If the government had "SWOT", then it would be fair to request that from those who disagree with them.

But considering that the government has done absolutely zero cost/benefit analysis, and considering their figures get worse every time we hear them, then a dart thrown at a dartboard of options would just as valid as their bull****.

johnnyskeleton · 08-09-2010 11:49PM

Drumpot wrote: »

Ive never seen a definitive alternative discussed in detail . . Im serious . I agree they have been suggested, but nothing has been intricately debated . . We only ever seem to get either pro FF or Anti FF ranting here which sidesteps the issues . .

The opposition party has consistantly claimed that there were better alternatives, but even now we still dont know exactly what the correct figures are . . Whether it was FF or FG/Lab in power, none of them would have definitive information to make the RIGHT decision. With this in mind, Im just surprised that anybody (govt or opposition) were able to make so many bold predictions and assumptions on the correct choice to take.

Better alternative:

When the banks came to government looking for the guarantee, instead of simply giving them what they wanted without question (buying a pig in a poke) they could all have been taken into temporary administration. Then, in a public and accountable manner, their balance sheets could be considered - not based on a "best international advice hem hem" soundbite but real figures drawn up by real accountants giving real best and worst case scenarios for each bank and if they are negligent in that task then they can be really sued for that.

If such was done, we would have been able to assess whether it was worth saving BOI (exposure €min-max / worth the risk) Anglo (exposure €min-max / not worth the risk) etc.

ei.sdraob · 09-09-2010 06:28AM

theres a detailed list of proposals here

http://trueeconomics.blogspot.com/2010/08/economics-27810-manifesto-i.html

whether you are politically left or right quite alot of these would make sense since they mostly target the root cause of most our problems, our taxation and political system

Drumpot · 09-09-2010 10:22AM

SkepticOne wrote: »

It is a bit rich, imo, to demand figures when the current government have gone to great lengths to ensure that the public only have very minimal access to information. It would have been far better to guarantee just deposits and let the bold holders hang. It is true that for a time, banks would not be lending due to lack of access to wholesale funds, banks are not lending now and this was one of the stated aims of NAMA. And now the cost of state borrowing is spiralling with the real possibility of default. We don't know how much the country has lost protecting bank bond investors but it is likely to run into the tens of billions.

Even FGs proposal of setting up a good bank would have been preferable to what has happened. Let the failed banks fail and let the shareholders and bond holders take the hit instead of bankrupting the state as the current plan has done.

Why do you need detailed figures (that are being kept secret) to see that the current option is the worst of any that have been proposed?

Ok .. So we dont actually know the figures needed to make an objective decision, yet you know for sure that FF did things wrong and that FG's proposal was better ?? Its this kind of talk that makes me wonder do people actually want to know the figures or is it actually easier on them that they dont know it so they can just lambast the government without actually knowing the facts.

That aside, what exact cost would it of been to let the banks fail ? Surely if you are so confident of the outcome, you would have some sort of projected costs? Or is that a hunch aswell ?

Drumpot · 09-09-2010 10:29AM

johnnyskeleton wrote: »

Better alternative:

When the banks came to government looking for the guarantee, instead of simply giving them what they wanted without question (buying a pig in a poke) they could all have been taken into temporary administration. Then, in a public and accountable manner, their balance sheets could be considered - not based on a "best international advice hem hem" soundbite but real figures drawn up by real accountants giving real best and worst case scenarios for each bank and if they are negligent in that task then they can be really sued for that.

If such was done, we would have been able to assess whether it was worth saving BOI (exposure €min-max / worth the risk) Anglo (exposure €min-max / not worth the risk) etc.

I dont think many people/economists question the speed at which the government had to make a decision on what to do with the banks. It was the decision taken that has caused so much derision. Its all good and well and saying that we will take our time and assess all options. But the bondmarkets wait for no country. While the government were deliberating all options, the country could of gone to sh*t.

Some people here seem to think that its all so simple and that there are no ramifications for choosing differant options, without considering external impacts. How would differant options of made our reputation abroad ? This effects how much it costs to fund our loans and the potential job creation by oversea's investors (who wants to invest in a whiney nation like Greece that doesnt take responsibility for its own actions?). That aside, while we may of paid the most for the bailout, only time will tell how much having a positive reputation abroad is worth.

Not just that the information we have now, was not available then. Despite the hindsight posters/parties that know exactly what should of been done, the information to make the right call was not immediatley available. Its ok to lambast the government for making the wrong call, but its hard to listen to this argument when some people are saying "the figures arent available" but "we are sure this would of been cheaper". . It just doesnt make any objective sense . .

wowa · 09-09-2010 10:33AM

I am assuming the ECB will eventually come calling and insist at looking into the circumstances and gross mismanagement of the irish banking system. Won't this surely make things more apparent and hang the system out to dry? Just curious.

SkepticOne · 09-09-2010 10:34AM

Drumpot wrote: »

Ok .. So we dont actually know the figures needed to make an objective decision, yet you know for sure that FF did things wrong and that FG's proposal was better ?? Its this kind of talk that makes me wonder do people actually want to know the figures or is it actually easier on them that they dont know it so they can just lambast the government without actually knowing the facts.

That aside, what exact cost would it of been to let the banks fail ? Surely if you are so confident of the outcome, you would have some sort of projected costs? Or is that a hunch aswell?

I think to be honest that the onus is on those defending the government's course of action to prove that the alternatives would have been worse and not the other way round. If it were the case that we had turned around the economy and were looking at some sort of recovery then yes, you may have had a point here but that does not seem to be happening.

IrishTonyO · 09-09-2010 10:47AM

johnnyskeleton wrote: »

AAAAAAGH!

End the guarantee at the end of september, wind down Anglo right now, let the other banks stand or fall.

It's never too late to do the right thing, although most of the damage has already been done.

The bank guarantee was already extended to the end of year, yesterday

Drumpot · 09-09-2010 11:08AM

SkepticOne wrote: »

I think to be honest that the onus is on those defending the government's course of action to prove that the alternatives would have been worse and not the other way round. If it were the case that we had turned around the economy and were looking at some sort of recovery then yes, you may have had a point here but that does not seem to be happening.

I dont think any alternative would of turned around the economy at this stage. Every economist worth their salt will openly admit that any other way would of cost us billions. The problem everybody has is working out exactly which was the cheapest. And while it sounds like an excuse, its a fair point to say that the world is going through a recession that is compared to the great depression by many. While FF have done alot to screw us, we cant really blame them for that and it was always going to have a huge knock on affect to a country that relies heavily on Exports (doing well cause of Euro) and foriegn investment (jobs and monetary).

If the government had of let the banks go, I for one do not know exactly what the cost might of been.I dont for a second think that the government was motivated by anything other then trying to do the right thing for the long term stability of the country (conspiracys about them trying to protect their "banker/builder friends" are ridiculous and baseless). That doesnt make their decision correct, I just wanted to get that out of the way.

With that in mind, I dont believe that they just turned around three times and while blindfolded picked one of three envelopes on the table as some people hint at. I do believe they considered alterntatives, but for whatever reason they chose not to take them. I would love to know why.

When people come on tv and say that "the government should not of saved the banks" etc. . I have no problem and want to believe its the case. But when they are subject to closer scrutiny they appear to have less answers (like conspiracy theorists who cannot discuss their conspiracys on closer inspection). It sounds nice to the ears, but is based on a desire to let the banks rot as opposed to a comprehensive analysis of the alternatives.

I think (I will stand corrected on that) a major part of the blanket guarantee was to protect our credit rating. Surely somebody could project the potential cost of borrowing money longer term with a bad credit rating ? This coupled with our international reputation and all the direct and indirect costs that might increase our woes. . I dont know how much this may of cost us, but neither does anybody else

ei.sdraob · 09-09-2010 11:16AM

@Drumpot as i mentioned in another post

if we went Icelandic

* we would be growing by now
* the incompetent government would have been replaced (hurray!) with one that has an uptodate mandate from the people
* investigations would have been carried out
* eu and neighbouring countries would extend a hand to prevent a spread to their countries

I never thought I say it, but going Icelandic in hindsight is much more preferably to the current slow rot that is getting worse after 2 years

Spacedog · 09-09-2010 11:17AM

Implement a 4th Parnell stylee land act. basically making every citizen the owner of the roof over their heads, no mortgages/landlords or banks for another couple of decades at least. invest in education and restore Ireland to a self sustaining knowledge based economy. piss easy.

it seems stupid that we sell the government owned services, phone telecom transport, that makes money, and nationalise the failed business seconds before they hit the wall.

SkepticOne · 09-09-2010 11:29AM

Drumpot wrote: »

When people come on tv and say that "the government should not of saved the banks" etc. . I have no problem and want to believe its the case. But when they are subject to closer scrutiny they appear to have less answers (like conspiracy theorists who cannot discuss their conspiracys on closer inspection). It sounds nice to the ears, but is based on a desire to let the banks rot as opposed to a comprehensive analysis of the alternatives.

What you are doing is taking a simplistic version of what some people may have said and arguing against that. Now why not take one of the serious alternatives, for example here:

http://trueeconomics.blogspot.com/2009/08/nama-30-more-weight.html

You need to prove that this would fail worse than than the current governments actions have failed.

Drumpot · 09-09-2010 11:35AM

ei.sdraob wrote: »

@Drumpot as i mentioned in another post

if we went Icelandic

* we would be growing by now
* the incompetent government would have been replaced (hurray!) with one that has an uptodate mandate from the people
* investigations would have been carried out
* eu and neighbouring countries would extend a hand to prevent a spread to their countries

I never thought I say it, but going Icelandic in hindsight is much more preferably to the current slow rot that is getting worse after 2 years

Hey Ei,

Im all for people going to jail and this government getting what it deserves, but that doesnt solve the problems of the country.

Are we comparable with Iceland (in terms of similar economic factors - interest rates, ability to make fiscal decisions within the EU etc) ?

When you say they are growing , didnt they fall much much further then us ? Their interest rates were 18% and are still around 8%?

Also, they have a populaton of 316,000. Less then a tenth of ours.

I agree with the principle points of your post, but are they actually truly comparible with us ?

ei.sdraob · 09-09-2010 11:40AM

Drumpot wrote: »

Hey Ei,

Im all for people going to jail and this government getting what it deserves, but that doesnt solve the problems of the country.

Are we comparable with Iceland (in terms of similar economic factors - interest rates, ability to make fiscal decisions within the EU etc) ?

When you say they are growing , didnt they fall much much further then us ? Their interest rates were 18% and are still around 8%?

Also, they have a populaton of 316,000. Less then a tenth of ours.

I agree with the principle points of your post, but are they actually truly comparible with us ?

Of course there are other difference like their banking problems being even bigger

what im trying to say they had short and sharp shock but the problems that have led them there are now mostly behind,
they had elections + proper investigations + referendums

basically their people got justice and got to vote and decide on their future, they also analysed the situation and are leaving it behind, we on the other hand have a government who are in denial and are refusing to acknowledge the severity of the situation, "sure its all ebbs and flows as we turn more corners!"

we are also falling deeper into a hole 2 years later with no glimmer of hope on the horizon and frustration from the electorate

Drumpot · 09-09-2010 11:51AM

SkepticOne wrote: »

What you are doing is taking a simplistic version of what some people may have said and arguing against that. Now why not take one of the serious alternatives, for example here:

http://trueeconomics.blogspot.com/2009/08/nama-30-more-weight.html

You need to prove that this would fail worse than than the current governments actions have failed.

I dont have to prove anything. Im not defending the government. I am asking to be convinced by the alternatives.

I read the blog and tried to post following :

Hi Professor,

I am interested in your presentation and would prefer anything that saves the taxpayers money. However, can you please elaborate on the costs to the taxpayer (directly and indirectly) in taking your approach? My understanding is some of the less desirable acts by the government (protecting subordinate bondholders etc), was more about protecting our credit rating and keeping the costs of borrowing down (v Greece, Iceland etc). Can you please clarify if this is wrong (and if so, why the government are choosing to take this stance).
What is generally agreed by most people in this debate, is that the taxpayer will have to bear some sort of cost. I usually like to hear what the downfall is, as there is no credible way of preventing some sort of loss to the taxpayer. Would you have any projected costs with your suggestion ?
You see, people here seem to think questioning alternatives is defending the government. I think it would be stupid to go headstrong into an alternative because it sound nicer . . Every way that could be explored will have a cost to the state. What I want to know is, which is the cheapest.

As my "comment" on his blog says, what will be the knock on costs of his proposal ? Interested to see if he posts the comment and gives a reply. I just dont understand how anybody can confidently provide an alternative without discussing the potential costs ! !

Drumpot · 09-09-2010 11:58AM

ei.sdraob wrote: »

Of course there are other difference like their banking problems being even bigger

what im trying to say they had short and sharp shock but the problems that have led them there are now mostly behind,
they had elections + proper investigations + referendums

basically their people got justice and got to vote and decide on their future, they also analysed the situation and are leaving it behind, we on the other hand have a government who are in denial and are refusing to acknowledge the severity of the situation, "sure its all ebbs and flows as we turn more corners!"

we are also falling deeper into a hole 2 years later with no glimmer of hope on the horizon and frustration from the electorate

Can I ask you, do you think that its more difficult for us to objectively debate our own country ?

I have a friend (Irish), working in New York for the last 6 years. Wouldnt you know it, he works in banking, but ironically enough he had advised the bank he was working with 3 years ago to reduce their loanbook (among othe things). He feels that the reputation of Ireland abroad has been enhanced by the decisions the government have made and have made Ireland a more attractive place for people to invest in.

Now, before you start giving out that "of course a banker would say that", isnt it still an important fact that we are indeed in some way stuck in a capitalist system that wants to see countries look after the financial markets ?

2 years ago, people on boards.ie were convinced the IMF were a dead cert. Now 2 years on, even Greece,Spain and Portugal havent needed an intervention, so why would we ? I believe that alot of the decisions made by our government have been done so, more so to appease the EU. As a country on its own merit , didnt Iceland have the room to take whatever course of action they wanted ? Did Ireland have the same scope , or would it of involved leaving the EU?

Your argument may be correct about Iceland, but did we actually have the choice to do what they did (in terms of taking the pain now) ? Im genuinley asking, not preaching!;)

SkepticOne · 09-09-2010 12:04PM

Drumpot wrote: »

My understanding is some of the less desirable acts by the government (protecting subordinate bondholders etc), was more about protecting our credit rating and keeping the costs of borrowing down (v Greece, Iceland etc). Can you please clarify if this is wrong (and if so, why the government are choosing to take this stance).

How does burdening the state with private sector screw ups help Ireland's rating? In fact didn't S&P state that bailing out the banks was one of the reasons for lowering Ireland's rating.

SkepticOne · 09-09-2010 12:06PM

Drumpot wrote: »

2 years ago, people on boards.ie were convinced the IMF were a dead cert. Now 2 years on, even Greece,Spain and Portugal havent needed an intervention, so why would we ?

Greece has had a combined IMF/EU intervention recently.

Drumpot · 09-09-2010 12:09PM

SkepticOne wrote: »

How does burdening the state with private sector screw ups help Ireland's rating? In fact didn't S&P state that bailing out the banks was one of the reasons for lowering Ireland's rating.

As I said in my "comment", why would the government bail out the private Bondholders if there was no financial incentive to do so ?

Every decision they made (rightly or wrongly) was to try to reduce the cost of this mess to the state. If there was no financial plus to bailing out the bondholders, why did they do it ?

johnnyskeleton · 09-09-2010 09:28PM

Drumpot wrote: »

Ok .. So we dont actually know the figures needed to make an objective decision, yet you know for sure that FF did things wrong and that FG's proposal was better ?

We KNOW that the government hid the figures and we KNOW that what they told us about the figures was incorrect. That is enough to KNOW that not releasing the figures was wrong.

Therefore, we KNOW that FF did wrong by the Irish tax payer. Maybe the FG proposal was better, maybe not. But it probably was because it meant that lending would be restored and that at least some of the losses would have been to the bondholders and not to the taxpayer. So yeah, it is possible to know that FG's proposal was better for the taxpayer, would definately have saved money and would probably have increased lending.

Anybody with credible figures and definitive confirmation of better alternatives ?

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