Lenihan: Nama is there to "establish a floor in the market".


#1

This is what Lenny told the Oireachtas Committee today. So we’ll have one big reluctant seller. Will it work and to what extent will it slow down/halt the decline in property prices?

Mods feel free to move this to the SS???


#2

Just like anglos golden circle !


#3

No it wont work.

Buyers will want a proper return and funding that will cost a whole lot more depressing prices further.

Japans prices went down to their economic value, nothing else can happen here.


#4

If youre gonna fix a market you dont broadcast it.

Is this guy fuckin high or something?


#5

Id say it’s just politicospeak for the average voter who wants to feel that their house will not slip into negative equity
(or worse negative equity as the case may be). You know once NAMA is up and running there will be stability and hey presto things will start to go up again… Yeah right… :unamused:


#6

Wake up lenihan, how can one afford a house at current prices with no job…

Your not living in Andorra!!!


#7

Got a transcript of this anywhere?


#8

Of course while people who don’t own property are entitled to vote, they are discouraged from doing so.

It would be interesting if we could try out a system, the opposite to the old english system, whereby you can only vote if you don’t own property. There’s some academic support for this notion - Plato argued that politicians should not be allowed own private property.


#9

Video:
dynamic.rte.ie/av/230-2602100-512-288.smil - Real Player required

Floor comment is at 3:05:11

Transcript should be up on the Oireachtas website within a week:
oireachtas.ie/


#10

I’m truly saddened reading the detail of what went down yesterday.

Jones Lang La Salle saying that the drops are unprecedented in his 39 years of experience but neglecting to mention that the preceding 10 years have seen wholly unprecedented increases.

Saying that market has dropped 50% and bottomed and that we can expect 88% to 96% increases over the next 7 years, basically taking us back to boom levels or close.

This is truly depressing.


#11

Putting a floor under property prices is, however, music to the ears of a whole swathe of the electorate. Saying that this is what NAMA will achieve is the card Id be playing if I was Lenihan


#12

The problem here is that most of the people facing Leni during questioning really didnt know how to roll up the crap he was spouting and throw it back at him. Its shameful the level of stupidity amongst our elected officials. :unamused:


#13

+1, Damien O’ Riely was on live line a couple of months back saying “I can’t believe some people who want houses to fall, I just can’t believe it”. That’s pretty much the norm around the country. Tell everyone if the price of houses falls that its cheaper to live here and we can compete against our European neighbours for the betterment of society, and they’ll have tuned out as soon as they hear the price of their house might fall.
You also have a lot of prominent people who invested in bank shares. THe BOI/AIB/TSB index must be over €10 now. It will be a hard fight.


#14

He did not say that, he quoted a study that found that trough to peak recoveries averaged that type of increase. He or Lenihan never said that they were using this study in their calculations in fact Lenihan categorically refuted it when pressed on it by Bruton.


#15

Then why mention it? if he’s not using it in some capacity.


#16

From the Zoe examinership thread:

This is clearly the kind of floor Lenihan is dreaming of.


#17

Indo today sez:

I think you can appreciate the difference between that and “Nama is there to “establish a floor in the market”.”

I hope somebody can prove that Lenihan’s actual words are the ones used in the thread title, as if the Indo’s comment is the correct one, this thread might not be in accord with libel laws.


#18

This is how it works. There has been only one property bubble in Ireland in last 40 years. There have been 4 in the US and UK. The Irish bubble was far bigger than any of the UK or US bubbles because the Irish bubble consists of two bubble, the first 1995-2001, the second blown on the back of the first 2002 - 2007. The first bubble was larger than almost all bubbles in the US and UK.

So they define 1971 - 2001 as the mean rather than 1971 - 1995. They use nominal rather than real to establish the trend and then use nominal with an over high expected inflation rate to extrapolate out 7 years. Adjust with a positive return to mean fudge factor extrapolated from the UK / US trends and that is your long term economic value.

In real terms this number is probably at least 30% / 50% greater than the most probable market value in 7 years time. That is the amount they plan to over pay by.

The fact that this was the first (and last) property bubble in Ireland in over 200 years, and that property bubbles have had a habit of disappearing for a generation of two in both the US and UK during the last 200 years completely invalidates the valuation premise behind NAMA. For example there were a whole series of property bubbles in the US during the period 1880’s - 1920’s. The last bubble burst in 1928 and the next property bubble in the US did not happen until the late 1960’s. What just happened in the US market is more like what happened in 1928 than 1903 (for example). Except for certain regional booms the last bubble was probably the last property bubble in the US in my lifetime.


#19

It was a long committee meeting yesterday and the transcript is not available yet but if Lenihan did not use these exact words in a reply then he and his advisors used words that expressed essentially the same concept. That was the impression his words gave me and if did not intend to give that impression he did not correct those who made more definitive statements that gave that impression. Thats good enough for a good faith defense. Plus we have a public interest question. And yes I do know that Ireland is the only western country that has not quite got the hang of the concept of ‘public interest’ in libel cases.


#20

I gave the link once already in this thread with the timecode
viewtopic.php?p=293492#p293492

  • but seeing as no one wants to do it themselves then here is the relevant transcript: