The great Irish sell off

A question for the good people of the Pin:

I don’t particularity share the outrage regarding the ‘vulture’ funds shown last night on RTE. One thing I was wondering about is whether there was a particular reason to target foreigners- to recapitalise Irish banks with foreign money?

If this were true, Irish people could not be targeted as investors as ( from an Irish banking financial perspective) they would just involve rearranging deckchairs on the Titanic.

Was there any particular reason for getting foreign money in?

We were broke and had no money off our own to take the debt off of the Bank’s books

I think this is a myth. From what I recall there was 80bn in bank deposits, although I’ve no idea how much of that was available for property investment.

Possible reasons…

  • Nama staff were more like asset managers than auctioneers. They did what they knew how to do.
  • If they’ve have disaggregated the portfolios, the cherries would have been picked, nobody would have bought the shit and it would have stayed on NAMA books until they end of time,
  • In 2011 only the most risk-loving vultures would have considered buying in Ireland. That doesn’t explain why NAMA is using the same model now.
  • A wave of repos was expected and the govt wanted the backlash to be directed at an external actor. “Vultures” fit the bill perfectly. Wave hasn’t materialised.
  • Govt wanted to get the cash in before the Eurozone imploded.
  • The big boys (Troika) made them do it.

That covers some of the cock ups. Then there’s conspiracies…

That said, hindsight is a wonderful thing. I could have raised the cash to buy a few apartments but genuinely thought the govt was going to default and exit the Eurozone so kept the cash outside the country.

it was the big boys I tell ya, they ordered Lenihan and Baldy to hand over the goodies.

The beneficial owners of lots of Irish property is abroad. Half of the supermarkets for example.

Likewise, Irish people and companies own property all over the world.

I know this is an increasingly nationalistic age, but is this really a problem?

Do people really prefer Canny as a landlord over a foreign-owned asset management company?

that foreign -owned asset management company owns the whole block and then some. They can dictate to the govt any policy they wish from rental controls to immigration.

By 2010 there was another 40bn in bank deposits off-shore - least we forget the the only people buying land from the Irish were the Irish.

The poor people of Ireland were so broke that there was no point in even *offering *the property to them.


Not trying to rewrite history here but 4 or 5 years ago, if you suggested that Irish Bank/Govt should borrow to buy up Irish property assets off of NAMA as they were great value…well, you’d have been carted off by the men in white coats

Nobody should trust anybody from Wall St. They must have had a field day dealing with the Paddies. :frowning:

At the end of 2010 there were total deposits of 170B. 94B from households, 33B from companies and 40B from pension/insurance funds etc. Companies owed the banks 92B and households owed the banks 131B. Pension/insurance owed the banks 38B.

NAMA owed the banks (with no deposits to support them) about 70B.

The gap in funding was filled by 132B of ECB funding through the Central Bank.

Apart from the kind of impossible scenario as to how would one organise using household and company deposits to “buy” the loans (without much sniggering I’m sure Brian Lucey would have an answer to that) we did not have the domestic wherewithal to solve the banking problem.

Looking back it was a pretty shit state of affairs where we all thought financial armageddon was impending (and until Draghi said he was going to do whatever it takes to save the euro, not an implausible outcome (ref Malta/Greece)). Of course that was when lone star rode into town and laid the foundations for serious gains by buying stuff from the old BOSI book. … istics.pdf

The Brian Lucey reference is very apt here Grumpy. The thought had crossed my mind on some of the posts that referenced the large desposits held in Irish banks

Personally I thought the first half of the show was over dramatic,with an almost Jaws like soundtrack, plus the lad at the start whose company loans were sold the line used was " Mick says they only missed 2 payments" now maybe I’m nitpicking but it should have been simple to CONFIRM Mick only missed 2 payments.
A general question which was asked on twitter. Assuming Mr X had a loan from say BOSI and the interest rate on his mortgage was e.g 4%, the loan is then bought by LoneStar or whom ever, is there any firm evidence that other than getting nastier letters or phone calls that the rate had risen or that the conditions attached to the loan had disimproved markedly

Overall, it’s a good thing for the country that the vulture funds invested here and made a profit.

+1. The more money they take out of the country the better because we just wouldn’t know what to do with it.

It’s not a good thing that they dont pay tax. It’s not a good thing that many of these properties were not offered to struggling Irish people to buy at reasonable prices (and yes there was a market). It’s not a good thing that many of these deals were not brought to market. It’s not a good thing that people’s basic tennancy rights have been trampled all over by aggressive faceless Wall St types. It’s not a good thing that many of these peoperties will be flipped back to the Paddies at very inflated prices just in time for the next crash.

Perhaps you could break your argument down a little for us?

Is it? I had/have money available to buy a modest property but NAMA was selling them to us outside the circle. I can’t be alone in having had some spare money available to clear a lot of the backlog.
Some of those known to me are spending over 50% of their income on rent as this Government was intent on keeping the prices up and supply artificially constrained.

Even small-time predatory landlords would be struggling to avoid/evade paying tax on their income or spending their income in the local economy on income they gain from houses\apartments which could have been sold to them instead of property funds with absolutely no presence in the country who remove the income direct from the economy without it ever having a chance to have a multiplier effect.

I am still not entirely happy that I understand is there was a valid ( or at least understandable) reason to prevent this- is it that this type of Irish money was already within the system ( and therefore doesn’t improve the banks as a whole) and they needed external money pumped in?
Or was it political ( prevent cherry picking and “They took my house Joe” )

I and my Cousin are living overseas. NAMA weren’t talking to me when I was making my enquiries and the NAMA property they were enquiring about was advertised at top dollar and to this day still remains unsold.

I still reckon the Government didn’t want to oversee Irish punters picking up cut price properties where potentially their neighbour had paid twice the amount. The potential for resentment and then the clamour for mortgage write downs would have increased.
Better to have some anonymous codenamed fund reap any spoils.