Fallout from Zoe collapse poses problems for Nama

irishtimes.com/newspaper/fin … 47332.html

Posted this in the Liam Carroll Endgame thread . How does Liams position that he is down 75% correspond with an ‘assumed’ haircut of 20-30% for Nama loans .

The Times wants a recall of the Dáil and NAMA brought in before Liams 100 day examinership is up.

The title of this piece should have made reference to the Prisoners Dilemma, of which it is a classic example.
It was ***always ***going to end this way !

I’m not sure that Zoe is typical, but its breathtaking - 75% loss (Was it Alan kelly who predicted 80%). The whole Nama thing is ill considered, and yes the Irish Banks , applying this, are bankrupt.

I could write an essay on this but I won’t, too busy.

Rabobank has equity of EUR 35 billion and is rated AAA. AIB, as an example, has equity of EUR 8 billion or so and this is being dramatically eroded by the day. Its rating don’t look too clever either.

Why bother waiting around to see an Irish government that procrastinates on everything to only procrastinate further. Why bother waiting to see NAMA medium term fair valuation bull and all that. It will only stagnate for years, with no principal repayments and no interest payments coming into Rabo.

The Dutch, if anything, are pragmatic people. I believe that the Rabo board - having bought a relatively small agricultural bank here - are amazed at what has happened and have decided you get what you can and get out fast. It is so obvious.

The myopic government view here is that everyone can wait around for years and all will resolve itself. Rabo are having none of it - and quite right.

Could this be the event, the “ACT II” that drags us out of the eye of the storm sooner rather than later?

Yes, if:

  1. We can somehow leverage it to stall NAMA; and
  2. It either sinks NAMA totally or else forces a realistic haircut on the other “assets”.

While I’m hoping this will happen, I’m not holding my breath.

I don’t agree with the conclusions of John Mcmanus…

Good keep breathing you’ll need the shout! :slight_smile:

Couln’t agree more - Setting up NAMA in this environment is national suicide - assuming Carrol isn’t the worst then the difference for NAMA to make up in asset value will be €500m on him alone -

it’s not going to happen - we should let these crap banks fail and let ACC take over irish retail operations!

That article has done more for Rabobanks image of being the “straight talking” bank than any amount of ads… You’re broke, Mr. Carroll you’re assets are worth a quarter of what they were, Now, Wheres my fucking money?.. vs… the Irish response, we must bring NAMA forward or the truth will come out.

If anyone has any doubts where to put their savings, that should have cleared it up…

The other banks must be under immense pressure to offer ACC a wad of cash to assign its securities to them and walk away. There is a delicious catch 22 here where the banks have to argue for a greater mark down in doing a deal with ACC than they will want when dealing with NAMA. The pleasure of seeing the bankers squirm is somewhat dampened by knowing we are paying for their mistakes though.

My attitude to my own and my wifes savings has been to place them not where they gain the most interest but with the same institution that holds my mortgage.
Just in case.

I don’t see the logic Prof, as far as I know you can’t offset one against the other if the need arises. I think this is even the case for offset mortgages.

Ho hum. Somebody catches on to what we have been saying here. In a house of cards, each card is small. But the ones on the bottom, close to the middle, are quite important. Pull one of them away and then mark your house of cards to market…

The question to me is: what happens next? Suppose Zoe does fail and is liquidated?

  • there will be major losses for the banks on their loans and a readover to the rest of their developments
  • sub-contractors and suppliers will go bust as their outstanding invoices are worth pennies on the euro with no chance of recovery
  • will there be sales of assets setting a market price? If not, what will the banks value the repossessed properties at on their books? I presume ACC will offload anything they get given their current ‘let me outta here’ posture?

So, what does it mean for NAMA?
A harder edge to the bargaining? A lower base start for economic long-term value? This will, I think, be determined in Europe. From reading the other threads about the suspension of Anglo tier 1 coupons, it seems we already have a puppet government…

juts so I understand: zoe could be liquidated, the taxpayer take the 70 per cent hit and Carroll will be left with his personal; assets of over €100 million, presumably not counting whatver in wife own name etc?


Doesn’t work like that. If they collapse, you still owe that debt and must repay all of it. Offsetting is not allowed.

Quote from an earlier thread:
There’s a story in the Sunday Times (5th July 2009) that Michael Holland, owner of the Fitzwilliam Hotel is paying about 23 cents in the euro to acquire the mortgage book from Credit Suisse.

Spot a pattern?

I reckon you’re right here. The most likely scenario is that the Irish banks will buy the ACC debt. The potential losses on the relatively small amounts of ACC debt are much less significant than the potential benefits of having NAMA overpay for the rest of the shite. Smart move by ACC.

Yep. And will surely be backed by our FF Shower. Cant let the banks fail. Systemic you see. Meanwhile, the " Best Bank Around" is getting the fuck out and doesnt care how it gets out.

Result - Carroll and Co saved and the Taxpayer left with Another Bill.