Very difficult to resist the urge to thrash about in a lunatic fashion while alternately laughing and screaming hysterically.
The concept of the bail-out skip known as NAMA -the fail-safe mechanism created by the State with guaranteed bottomless pockets, designed to do creative-bookeeping and maintain the status quo, running out of cash, is just too funny for words. We’el probably all die laughing.
As I put in the other thread (commercial rents):
There is a huge danger that NAMA will start to sell assets to pay current costs. Leaving it reliant on extraordinary returns from low quality assets (as the high quality ones will be sold first). NAMA could end up finishing its work without paying back much in the way of NAMA bonds. Who would be arguing with S&P then, Mr. Corrigan?
On then other hand as Morgan Kelly might put it… NAMA’s difficulty is not a liquidity problem … it has simply bank-rolled too many toxic properties…too many ‘bad loans’ on its books… it is insolvent … broke…
Should have read the Sunday Trib last Sunday week. About 30% now performing, increase due to Nama asking for the money whereas the banks hadn’t bothered collecting the rent roll. The E200k story is incorrect, as affirmed by Indo today. Instead as Trib revealed last week developers will be get a set amount to run their office, including employee salaries. The six business plans in 10 also was in Trib. Also Nama will show a profit for second quarter. The drop off in performing loans is more than offset by the higher than expected discounts- ie lower amount to be paid out in bonds. In fact that’s probably the reason they haven’t had to go looking for extra money.
They’re not going to announce individual sales afaik, they’ll be announced in the quarterly reports.
What is the economic case for working with developers versus foreclosing on them?
To me, the latter would lead to higher recoveries. I can’t see how you can access developers pledged assets/personal guarantees if you don’t foreclosure. Also, by continuing projects other creditors will be paid (again lowering recoveries). And the is also greater potential for fraud - making flows of money available increases the possibilities for rainy day funds.
So other than cronism, what is the case for working with developers?