Yeah, the zombies are still hanging in there. Things looked completely knackered in terms of surviving on their own. BOI paid a huge rate on 3yr snr bonds recently. Note that this is with a government guarantee (I think the cost to boi would add the cost of ELG cover + coupon = c. 6.75% on 3yr funding ). There’s not a hope in hell their lending margins can cover these types of costs. The ECB is keeping these banks going. And BOI is supposed to be the good one
Given the dire straits of the government finances, the strength of the guarantee is no longer valued. It’s no great surprise that other private banks won’t accept NAMA bonds as collateral.
So by every criterion on which NAMA was set up, it has singularly failed – it hasn’t restored confidence in the banking system, it hasn’t got the banks lending again, it hasn’t demonstrated any LTEV and has no chance of turning a profit, it hasn’t saved money on administration, it may even be legally challenged.
So, why not disband NAMA and give the toxic loans back to the banks, in return for the NAMA bonds which turned out to be no use to the banks anyway. Toxic loans become bank liabilities once again. While we’re at it, let’s demand some of our recapitalisation money back. Then with bank debts once more privatised, let’s leave the whole stinking pile of them to face the senior bondholders on their own – the way it always should have been.
Actually NAMA has been a huge success, according to the original aims of those who created it. It was never supposed to be a Bank Resolution Trust. It was supposed to be the stroke to end all strokes. A dig out for the very wide range of VI’s who found themselves insolvent and bankrupt in 3Q, 2008. It was never supposed to fix the problem of a completely collapsed banking system. It was supposed to give an opportunity for the VI’s at the front of the queue of people with the ministers ears a chance to cash out and for those further back in the queue a chance to either ameliorate their losses or else transfer them indirectly onto to the tax payer. And with the ECB underwriting the bonds in the interim.
But most importantly of all, NAMA was supposed to bury all the evidence and to protect the guilty. And it that regard it has been a stunning success. NAMA has been a huge success at burying the evidence of widespread felony fraud and of professional malfeasance and incompetence on a truly staggering scale. Think 10 billion euro plus for starters for an idea of just how much money has “disappeared”.
As with all great plans things have not quite worked according to plan. Those at the front of the queue have mostly cashed out, but not at the rate they had hoped for. For those further back in the queue NAMA has been less of a success in facilitating a cashing out of their bubble gains. In fact a lot of the ruling elite are nursing huge losses at the moment. But NAMA is well on the way to socializing most of these losses so that the tax payer will end up paying for the personal losses of most of the affluent class. Its just a race against time to see how many NAMA can bail out before it fails apart under its inherent contradictions.
The wildcard is the whole story has been the EU/ECB. They have almost sunk NAMA on several occasions and the good ship NAMA is currently holed and listing precariously. Those lovely clean diagrams in the original plan have been ruined by the ECB refusing to directly underwrite the NAMA bonds. Most maybe parked there at the moment but they will be chucked out into a cold hostile world sooner rather than later. Then the real fun starts.
Maybe when NAMA finally falls apart, which it will, you will finally see some kind of Bank Resolution Trust set up to actually reconstruct the Irish banking sector. Which is what would have been set up in any normal country at the end of 2008. But hey, the greedy and the guilty will be cashed out and safe from any legal recourse by that stage so where’s the problem.
Did you actually expect the Irish ruling class to act in an statesmanlike manner and actually make wise decisions for the greater good of the people?
That’s nice rhetoric, if you don’t mind me saying so, but for a simpleton like myself can you tell me which VI’s have cashed out, and how? And in particular, what evidence is there for conspiracy theory over cock-up theory.
We went through this whole subject in very great detail on the various Anglo and other threads over the last two years as hard data escaped in drips and drabs. Search for my name and some of the other high post count contributors in the financial forums here and you will find pretty much everything that will be written about Anglo, the who, the why and the what, when the definitive book about the bubble and the collapsing of the Irish banking system is written in 10 or 15 years time.
For me the only questions left to be answered is just how small were the original investment amounts whose protection precipitated the Anglo guarantee? Probably only a bil or two of highly leveraged money. Just how serious was the law breaking implicit in those investments? What percentage of the IFSC operations are pure tax / regulator evasion? 50%? 70%? Just how much of the 200B plus of non IFSC activity was lost due to 3Q/2008? 50%? 80%? And finally, just how much cash has Bertie stashed away? Six figure? Seven figure? And just how big where the “deals” he had an “interest” in? Eight figure? Nine figure?
Everything else is just bookkeeping…
None of this is conspiracy theory. This is how Ireland really works. I got to see all this close up last time around during the Haughy era thirty years ago. People who were paying the slightest bit of attention back then knew exactly what was going on, sans some of the finer detail which came out later. The fact that the majority were willfully blind to what was going on and then acted all horrified when it could all be finally published in excruciating detail 20 years later (due to libel law) reflected very badly on the majority and their political culture of grasping short sighted stupidity. The complete scoundrels they vote into office decade after decade less so.
So I’ve seen it all before 30 years ago. And based on the completely supine public reaction to the utter recklessness and venality of their ruling class, we will see it all again in 30 years time.
Thanks. I did a very quick browse of your posts, but for a relative newb like myself it’s a bit difficult to catch up. I did note a few things like viewtopic.php?f=46&t=32149&p=415614#p415614 and the associated link to namawinelake. But – again, forgive my limited understanding and possible naivety – I’m not seeing how, even if there was wrongdoing at Anglo, how NAMA specifically represents a bailout or opportunity to cash in for VIs.
Btw, what did you make of the Garda claims in the news today that investigations are at an advanced stage and they will make known in December if there are going to be prosecutions against Anglo management. Will we be hearing that no, everything actually seems to be in order after all? Does the grand conspiracy extend to the bankers, the government, and the police?
But regardless of likely criminal activity in the banking system, what hard evidence is there that government actions post September 2008 result from anything other than naivety, monumental incompetence, and ignorance about the insolvent state of the banks which, in fairness 99% of the Irish population seem to be still struggling to comprehend.
Thank you. I will read those threads in detail a.s.a.p. However, at the risk of jumping the gun, from a speed-read of the first couple, some of the speculation there has already not come true – Anglo sub debt holders are being burned, the mid-range (5-20m) loans previously heading for NAMA no longer are, etc.
Well, look how ‘burned’ the voluntary buyback sub-debt holders were. The mid-range loans are only not being transferred from AIB and BoI; they still go from Anglo, AFAIK. At various other points in the whole debacle, you can see cunning strategies falling to pieces. The closing of the bond markets to AIB and BoI and continuing capital flight have left it impossible to save all, at least at this time. Anglo and INBS are the most systemically important to the aristocracy…