September 2, 2009

NAMA money pit could be our economic Stalingrad

Posted in Banks · 275 comments ·

banks_indo_385817nThe collapse in property values, the fact that the market here is in free-fall and developers and banks are bankrupt presents the single biggest opportunity this country has had in a generation.

With so much prime land now available to the State for a song, the obvious thing is for the State to profit from the bankers’ and developers’ stupidity and greed by buying the land for next to nothing and then putting it to public use.

This will mean the orderly winding down of some banks over the course of the next year. In almost every banking disaster we have seen in the past two decades, the obvious thing to do is let banks go. The State guarantees deposits, transfers these deposits to a new bank and the economy starts again. From the Swedish crisis of the early 1990s to the Asian Tiger collapse and the USA today, banks go bust and the countries recover.

The banking system and the economy are not the same. Our government has migrated from a logical position of trying to save what looked like it might possibly be a good banking system, to trying to preserve what we know to be a bad banking system. This makes no sense and, more crucially, investors don’t like what they see. Investors want to share in success not be party to a policy which is neither credible economically nor clever financially. It is for this reason that no institution bar the ECB will touch the NAMA bonds.

Before I explain why letting a bank go will encourage money to flow into the country (rather than flow out of the country as the Government seems to think), let’s appreciate why this is an opportunity, not a crisis.

Potentially, this could be a one-off windfall gain for the people and the first step towards economic recovery. Yet for some reason, instead of raising a bond to buy cheap land at this once-in-a-generation fire- sale price, the State wants to protect the people who got us into this mess so they can hold on to some gains in the chaos.

Where is this analysis coming from? Think about it, in the boom we couldn’t build infrastructure at a decent price because the price of land was artificially inflated. So the people transferred billions of euros to landowners and developers to allow us to build bridges, schools and roads on hugely expensive land. In effect, this was a tax on the average person to subsidise the very rich.

Now the opposite is the case. We can subsidise the poor by taking the land back now. But instead of seizing the opportunity to buy this land for the State’s use for the next generation, we are being asked to put the interests of the corrupt, greedy and plainly stupid bankers over the interests of the average citizen.

We are being asked to stump up for NAMA based on the reasoning that if we don’t do this then investors will flee the country. This line is hilarious for anyone who has worked in international finance during a banking crisis; it implies that international investors are prepared to risk their money in a country that is being turned into a large debt-servicing agency for old debts.

One of the most depressing aspects of the present policy disaster is that people who are constructing it have clearly no idea how traders or the financial markets think. It is policy framed by civil servants and lawyers, not by traders and as such it scares proper investors who might be willing to take a punt on Ireland. At the moment the place doesn’t seem safe because the State is trying to prevent the inevitable and as long as it does this, money will stay on the sidelines. (The promises made in the good times look silly now when everything has changed and trying to keep them looks incredible.)

In every episode of debt-induced crises, governments break promises made in the boom and the simple reason is that is what they have to do. They don’t have the money and they are not prepared to put the interests of investors above the people.

Most proper investors realise this, which is why money flooded back into Sweden after it let a bank go bust. It is why money flooded back into Finland, the US and Ireland (in 1993) after we broke our promises to bond and currency investors and devalued our currencies. Likewise, in the Asian crisis, investors took their losses on banks and moved on.

When investing, you take the rough with the smooth. You win some you lose some and only the naive believe that they will never make a loss. Having worked in international banking in various countries which experienced banking crisis throughout the late 1990s and early 2000s, I know that no country reacted as we have.

Our desire to protect all bank investors is the behaviour of fanatics. By this I mean that trying to pretend we have the money and the resources to bail out the banks when we do not is the economics of Stalingrad. We are trying to throw everything we have into the banks, exhausting our resources in the process. When investors see that we are being ruled by financial fanatics, they stay miles away because they know investing is pointless.

Inexplicably, NAMA is our economic Stalingrad and it scares all sensible people. It is based on the “big lie” that to lose here would spell disaster. In fact, the opposite is the case. Why wouldn’t you want to invest in Ireland once the banks are wound down? You get a smart population, that isn’t being mortgaged for the mistakes of the few.

The reason we must fight NAMA at every turn is because it is the economics of fanatics and the whole world can see this. It will keep money away from the country, not the other way around.

  1. How would the state benefit from owning development land, hotels and office blocks? Even if there was a possibility of getting some use from said assets, do we really want the state sitting on a huge property portfolio? I can only imagine one outcome in such a scenario; a feeding frenzy among interest groups.

  2. I think of Stalingrad for other reasons. Are you not advocating financial revolution by opposing NAMA? Does NAMA not at least give us a chance to reform with a minimum of bloodshed (read, jobs etc.)? With the likes of yourself and Lee and others opposing this so strongly, I begin to doubt my thinking on it, but I’m just trying to picture how the international markets would react to us in the morning if we said, O hang on, we’re not going ahead with NAMA – we’re going to make sure the banks carry the can. Is our economy (& pensions) not so internationalised, that to take down the establishment ‘pillars’ would just ending up crippling taxpayers immediately rather than making them suffer less pain over a longer period of time?

    • wills

      question,. why do you assume you as a taxpayer should pay for someone else’s greed.??

      • Just because I don’t see a viable alternative. I don’t like it. I resent the people who are most repsonsible for the mess, but I fear the idea of cutting them down to size. In some ways THEY are the wire by which we are plugged into the global economy. Are we to pull the plug? (Ditto for Lisbon.)

        • StephenKenny

          Taking a look at the attitudes of banks, over the past 20 years, it is apparent that they are *far* more pragmatic than they have been held out to be, over the past 18 months or so.
          No bank is actually ‘too big to fail’, that is merely a highly effective piece of PR, put about, quite understandably, by people hoping to have their fortunes saved by the tax payer.
          As an economy, we could all get by very well, with little more than the now famous 3-6-3 model, staffed by essentially honest, but not so very clever, people.
          Financial services is, if you consider it, a support service for the real economy; like the people who do the drains, but not so important (no, that’s not a joke – just think it through).
          Banks simply borrow and lend money, taking a turn in the middle.
          The finacial markets enable investors to invest in companies that want to borrow money.
          Commodities markets enable consumers of commodities, and producers of commodities, to ‘do their deals’ in an efficient manner.
          All markets benefit from a degree of speculation (there’s always some wacky guy who wants to buy when the world’s selling), but not too much.
          I think that the fact that every barrel of oil is sold, on average, about 27 times between being dug out of the ground, and hitting a refinery, might go some way to explaining the total disconnect between the oil price, and supply and demand.

          One of the great achievements of recent months, has been the creation of the total misconception that the fact that we need ‘some’ banks (we do) means that we need ‘these’ banks (we don’t).

    • Gary

      Why do you think the NAMA proposal is any more viable, than the other options i.e. Nationalisation, Good Bank, Direct government loans to get credit moving in the real economy. I dislike NAMA and from a logical perspective it can only be viewed as a bail out for builders and bankers Why are the banks that are participating in NAMA so willing to help out Liam Carroll and his €1.2 billion euro debt. While ACC a non NAMA participant view there plans as a complete fantasy, with little hope of success. The banks will obviously pass Caroll’s bad debts onto NAMA, rather than letting the so called free market take its course.

  3. wills

    David,. “…the state wants to protect the people who got us into this mess”. EXACTLY.

    So, our democratic republic is an illusion.

    Ireland is in the control of a secretive crony capitalist network.

    • Fergal73

      It is not in the control of a secretive crony capitalist network. The network is open and proud. It is called Fianna Fail. Will the Irish ever realise that they consistently vote against their own self interest?

      DeValera and his vision of a Gaelic nation ensured the emigration poverty and misery of the 50′s.
      Haughey’s unexplained wealth, expensive shirts, wine, a yacht and a private Ireland was not wealth generated – it was wealth stolen from the people through backroom deals we will probably never know about.
      Bertie’s dig-outs and “horse” wins – do people really think these were cost-free to the nation?
      The Fianna Fail Galway Races tent stood proudly and was there for all to see.

      The corruption is not secretive, it is entirely public and everyone who voted Fianna Fail holds a degree of responsibility.

      • Deco

        Fergal – I disagree. A powerful network of cronies are in control of the main oligopolistic commercial concerns that run the country.
        Fianna Fail are not the governing party of Ireland. IBEC are the real power. Fianna Fail are political party, with a leadership of corrupt amateurs at the top pretending to administer democracy. But the real power is the so-called social partnership between the IBEC, ICTU and the state.

        There is pervaisive corruption in Irish society. And is goes well beyond FF. Though with Bertie Ahern, this corrupt element found one of their own to run the country. I would say that a lot of it started with the career of CJH. In Ireland in the 1960s, Ireland moved from being controlled by the bishops to being controlled by the oligopolists. We now need to free Ireland from the oligopolists. It is as simple as that.

        I recommend that you read the analysis of Senator Shane Ross on the ethos of Irish business life, especially concerning IBEC, and the ISEQ companies. IBEC are the unelected corporate governing body for Ireland. They have a dangerous level of influence on national policy. If you want a critique of IBEC price rigging culture, just go to Enniskillen and observe who is doing the shopping. Or take note of why Eddie Hobbs was never allosed onto RTE to do RipOff Republic – Series 2.

        Don’t expect to get the truth from RTE either.

        • Fergal73

          Economics almost always lies behind the political power.

          Where that is not the case is for true idealists (idealism is not always a good thing, see Taliban fundamentalists who are pro Sharia Law), Sinn Fein was/is the political wing of the IRA.

          Behind GW and George Bush was oil. Behind the US republican generally are big phrama, big tobacco and big oil.

          FF is the political wing of the corrupt cabal. They’re out in the open, but the stupid stupid Irish electorate arose and followed Charlie (despite the mysterious wealth) and then followed Bertie / Cowen. Reynolds, wasn’t dirty enough to last as leader. FF corruption and favouritism for the elite has been public knowledge since the 80′s. The Irish love of martyrdom and suffering or else Irish electorate stupidity is the only reasonable answer to why Ireland is where it is.

  4. Tim

    David and wills, 100%
    Joined-up thinking: We have a budget deficit as a result of our democratic deficit.

    The cronies are running the country, not the government. A board-member of Goldman Sachs was only, ever, going to come up with a plan to bail out banksters, instead of our society. Always chasing the money…. a leopard and his spots…….

  5. David, perhaps the extremes are not altogether the best solution. NAMA or nationalised banks.

    Why not consider a State supported bank that is 30% owned by the government as they inject 30% of the equity and the private sector inject the remainder?

    Then allow the banks who got into the mess go bankrupt. However there could be legislation that would allow them to enter into a scheme of arrangement with their bond holders and they write down the debts themselves.

    If the bond holders don’t agree to the arrangement then let the bank go bankrupt and the new State Supported private banking system would buy any of the property that comes on the market.

    The very fact that Private Equity was willing to come into te Irish market and indeed the Canadian Bank interested in the AIB remains suggests that there is an appetite that some alternative (not nationalised) banking system could be worth consideration.

    NAMA is a finger in the Dyke…. At the end of the day the flood water of the excess debts will not allow the economy to rebound as the overhang of debt is just too great.

    The bank(s) investment institutions could buy up the outstanding mortgages and renegotiate the debt between themselves and the existing mortgage holders (subject to some safety net)

    Has this option been considered or is it all NAMA, a new State bank or nationalisation? Here is another option

  6. Excellent piece David.

    You have an uncanny ability to coin the most appropriate of phrases!

    Nama is indeed our economic Stalingrad – and like the German 6th Army we are surrounded, defeated, starving, with no supply lines and trying to fend of the vicious winter cold whilst a valiant Red Army continues to attack us………..

    I always said that Fianna Fails approach to handling this economic crisis is ” gombeenism masquerading as economic policy” :-)

    Looking forward to reading your new book………….

  7. Puschkin the Black and White Cat

    Excellent piece,

    One of the previous comments spoke of the undemocratic actions of NAMA. This is in fact the root of the problem. In the 34 years, 1979 to 2012 (the end of this current Dail) the same party (FF) will have been in power for 27 of those years. Ireland is in effect a one party state. These people are now so powerful that they answer to nobody, they can do what they want. See how the courts will even defend their (property developers) interests, this is frightening.

    They bought power in many ways, most notably by the benchmarking exercise. There never was a “Celtic Tiger” during these years our exports fell and manufacturing contracted the fuel was borrowed money.

    I believe that democracy is the real problem. I think we are in for a very hard time until democracy can be restored.

    The Lisbon affair is also undemocratic, it is true that a majority of politicians have passed the Lisbon treaty. However in many countries it would have failed if put to the people. The British public was told they would get a referendum but the Labour government changed their mind because they knew it would fall. The people of France and the Netherlands have already rejected the European constitution which we all know is Lisbon by another name.

    NAMA and Lisbon, well David they are just the same thing!, all manifestations of power gone wild and democracy cowering in the dark.

    • wills

      it’s not all focused on FF, it is a network involving corrupt money grabbers in politics, banking, business, civil service, legal world and meeja.

  8. wills

    The people of Ireland have been locked onto the land and forced into a serf neo feudal system transferring their wealth upwards into the coffers of the nobility of vested interests behind this crony capitalist network in control of the republic of Ireland.

    • wills

      The implementation of NAMA is a giant leap forward for the money grabbing nobility and their co-horts
      in strengthening their grip on power and control over the common folk
      of the Rep of Ireland.
      Social engineering rounding up the lesser well off into a debt pit while the moneyed elite
      who are the orchestrators of the banking property scam stand aloof
      staring down into the pit p1ssing down
      on our heads.

      • wills

        a parasitic system waging war against reality, freedom and justice, in retreat and desperate, desperate to stop the breakdown,
        the collapse of their control over the serf toiling class.
        They are the elite, the cool dudes, the hip to be square all wisht to be,
        at least in their own omnipotent minds,
        and don’t understand the system of lying cheating and conning of old
        is over for them and the more they pull
        this NAMA stroke and Lisbon stroke the more the masses
        will see the truth behind the surface.

  9. The Eye

    Anyone interested in going on a street protest Re: no to Nama followed by a no to Lisbon again march?

  10. Puschkin the Black and White Cat

    There is an anti NAMA march on in Dublin on Saturday the 12-Sept-2009 starting at 14:00 from the garden of remembrance to the Dail. I am not aware of the times of any anti Lisbon Marches but if there is one I’d like to go.

  11. gibbonm

    I would be interested in marching. who is organising the march?

  12. Thanks David. Today we’ve had the benefit of you and George Lee contibuting big time to the debate on how best to find a way out of the biggest mess any of us have ever known.

    Whatever form of words we use to describe the cabal who’ve ruled Ireland, the one thing I’m sure of is that they are fighting hard to preserve as much as they can of their vested privileges.

    You have to admire the ruling class establishment for its ingenuity. It threatens to commit future generations to a system which conserves their power and wealth. You can be sure that every intervention is being carefully choreographed, leading towards a point where citzens will be presented with “Nama – the only show in town.”

    Mr Lenihan purchased Alan Ahern on behalf of his team. The senior civil servants are working overtime to produce the required collection of spin. The Fianna Fail party intelligentia are converting one lot of spin into another, so that TDs will have a script to trott out.

    This is a show. The authors are working for the ruling class. They are writing lines like “of course NAMA won’t pay too much for the loans… Just you wait and see, all will be revealed in a couple of weeks…” Lines like “long term historic values” invented to obscure the reality that there is no such thing as a method to determine the value of land apart from the price at which it is exchanged for money. Land is worth whatever someone pays for it. But the script-writers are working their butts off producing arguments to persuade the general population that there is objective intelligence behind government moves.

    We all know in our heart of hearts that this is a game. One team has held all the cards, and it has fowlly screwed up. But it has no intention of letting go of the reins and trappings of power. The other team has hardly ever played together. Citizens (let’s call the other team) are all over the place, feeling let down, betrayed, suspicious of all leaders.

    Citizens find it hard to abandon their old leaders because they are the only ones they’ve known. Should we trust David McWilliams to lead us out of this mess, or George Lee, or Shane Ross? The ruling class team are buying up playing right left and centre. It’ll be hard to beat them.

    In the old days, citizens would never have had a chance. However, one thing has changed: there are now loads of educated people unemployed, struggling to survive. The citizens’ team is no longer completely blind to spin. Many have travelled abroad and acquired the skill of suspecting motives.

    NAMA is a stinking trojan horse. I know that. Not because I’m a brilliant economist. But because I know where it’s come from.

    • gadfly55

      The citizens are now blinded in the headlights of the oncoming train wreck, and cannot listen or think or act. They, their children and grand-children are being mown down like the serfs their ancestors were for the sake of the Masters of Liquidity with 12 thousand billion in off-shore private banking who can keep the Irish economy floating in this wreckage of just about every citizen still living here. I for one, am quitting this puddle of misery and babbling idiocy because the Fianna Fool party is having the last laugh as they know that they won’t be in office for the next decade, and will have left a bankrupt public purse to whosoever inherits this catastrophe of their making.

    • “NAMA is a stinking trojan horse. I know that. Not because I’m a brilliant economist. But because I know where it’s come from”


  13. wills

    The NAMA Deception,,,,,,,,

    The moneyed elites are forcing NAMA own Irelands throat.

    It’s all about taking the truth away from people to live in a culture of lies and deception.

    A chilling effect ‘cos that is the only way the moneyed elite know how too rule.

    NAMA is a chilling efect.

    Chilling on the people learning to trust their own analytical thinking. It’s kafka.

    The moneyed elites are freaked, they want people to give up trusting their own minds.

    They know they can’t lie too us as easily as before and are desperate to re – equate power melting away.

    NAMA , massive house prices, Lisbon, Swine flu hype scare tactics are classic shock and awe tools of intimidation,,,,,

    …too stop people seen the tyranny they live under for what it is.

    The emperor has no clothes,. gameover gameover gameover

  14. adamabyss


  15. adamabyss

    Subscribe, sorry guys.

  16. htzSdLSkV

    A very good article, thanks

  17. Riggs


    I am somewhat concerned that you are now apparently anti-NAMA which correct me if I am wrong was not your recent stance.

    NAMA as we currently know it is both thrillseeking and alarming for the same reason. Nobody and I mean nobody has any idea of where it is going and what it might produce.

    However in principle it is worth exploring as a framework but within strict parameters and obviously a major amount of tweeking, especially with regard to the proposed asset evaluations. Time unfortunately is not on our side and all players (political and otherwise) need to become accountable and focused.

    “Politics” has got to take a back seat.

    I actually believe that Brian Lenihan is working with this mind set but his boss is frighteningly absent from the scene of the crime.

    It is NOT yet time to sing “Nearer my god to thee”!

  18. finbarr

    Its like trying to pick between a kick in the nuts or a head butt. However I think the kick in the nuts is the FG good bank proposal. I listened to George Lee on the Radio today and some of the things he said are completely unquantifible. How could AIB or BOI survive if you removed only their good ‘parts’ AND continue to work and do the front line administration or effectively be the branched for the new ‘good bank’. Thats nonsense!
    Nama is only slightly better but I have to go with the head butt as it will heal quicker and could do less damage than the kick in the nuts, with it’s horrible delayed pain.

  19. Philip

    As I see it, we are running out of cash and fast. We still have to cut public service costs and deeply simply becasue we are spending money faster than the private sector can replace it. The ECB will only go so far in financing us and NAMA does nothing in redressing the balance. The mantra is that NAMA’s 90bn gets the banks lending which gets the money flowing which gets the taxes flowing. The time dynamic is simply too long as I believe we’ll have a cash problem in a 10th of the time before NAMA benefits might flow through. This is what the foreign traders see and are worried about.

    To understand the cash problem, bear in mind that for every euro we borrow, we’ll have to earn about 2 euro over 10 years to pay it back at about 6%. Our current 1.5Tn is a 3Tn payback in 10 years. Now while we are busy destroying our productive output with NAMA soaking taxes, someone in the ECB who is ultimately authorising the footing of this bill, will be told to take a hike. Investors like to see the business plan…guess what, I think they see it’s nonsense.

    3Tn is 300 bn/ annum or 300,000 per private sector worker per year (there’s only about a Million of them). The traders want cash, not aspirational house prices. Now, I do not know how many of you guys get paid 300K plus. But if you do, I suspect, Ireland is the last place you want to be.

  20. gadfly55

    Clearly stated, but the Fianna Foolers are stampeding us off the cliff to stay in the good books with the major investors, so they say, who will never ever ever lend any money at all, at all to the Irish banks. As effectively, it is the ECB doing the lending anyway, in what sense are the banks Irish, and if the bankers look after the bank’s survival, how can it possibly benefit the real economy in the short, medium and long term. The people should withdraw their money from banks and deposit it in credit unions. The major banks have conspired to shock the cabinet into a guarantee of deposits which is now compelling the government into NAMA bail-out at the cost of the taxpayers directly and indirectly. Let the banks wind down their operations, and the investors and shareholders take the losses. Capitalism is not a one way bet. As flies to the gods, is this Irish government to big money.

  21. liam

    Riggs, David can speak for himself, but I’m not aware of anybody outside of the “Government” the banks and the developers proposing or advocating anything like what the Irish are now facing. Setting up a toxic skip to work off the debts is one thing (and a number of schemes have been proposed by many others) but putting the taxpayer on the hook for every cent is an entirely different matter.

    Whatever happens will mean pain, that is simply unavoidable. finbar’s analogy is a nice one. I can’t comment on his conclusions though, I don’t have the knowledge or the background. But, I think I know a stinking pile of dogsh!t when I see it.

    Crises and boom are all essentially the process of transfering large amounts of capital from one part of the economy to another whether you measure it by industry sector or income demographic and we’re about to sell the country to pay for the banks.

    And I think we discussed this already, oh, right about here (sparked by an insight from jim):

    “A Government of laws, not of men” is what is required.

  22. Surely also, that if we do spend a packet saving the banks, they will have to pay us, the tax payer back for our investment, rendering them very uncompetitive on the market place for years to come. What will stop other foreign banks coming in and totally under-cutting them, thus taking away their ability to pay us back, or stay afloat themselves for that matter…I’m not an economist…it’s just an innocent observation.

  23. swift

    David, thank god you’re back. As one of the very few people who had the balls to publicly predict what is now happening, I believe your creibility now is beyond question.
    I wrote to Fianna Fail and Fine Gael expressing my outrage at the NAMA plans – I believe the people in responsible positions in this country have no idea what they are doing and just hoping everything will work out. In fact, it all feels very sinister to me. Rabobank must be wondering how its possible to appeal a Supreme Court decision. I’m wondering that too.
    I firmly believe that the only thing we have to fear is fear itself (Good old Roosevelt). That is one reason why I 100% agree with your article today. But unfortunately, the fear is ruling our government at the moment and they have also guaranteed all liabilities of our banks aswell until next year.
    What morons……..

  24. Tim

    Folks, they are runnin’ for the hills……. the Alps!

    What is troubling, too, is this: some people named in that article and elsewhere in terms of inflating the bubble, are the same names I have heard mentioned on radio as being the ones meeting at the Diaspora business meeting at Farmleigh that David wrote about.

    Are the great and the good now jsut going to pick a diasporic country to escape to with their smash-and-grab riches, leaving the great unwashed to pay for it?

    I wonder how many other such individuals will become tax exiles before NAMA bites?

    Deco, this could be the true meaning of your quip the other day about “the Tax-Diaspora”.

  25. connolp5

    Thank God that David McWilliams is back from sabatical and that George Lee has found his voice again. NAMA is going to be our “Stalingrad”. But how can we the ordinary people ensure that it is stopped dead in its tracks.
    Fintan O’Toole suggested that a march on the Dail should be organised. I fully agree with this approach. Let people power show our politicians what they think of the NAMA lunacy. Perhaps the Greens will find their nerve and save our children from economic oblivion. I appeal to David McWilliams to call for a march in Dublin prior to the MAMA leglislation. I predict that it will make the PAYE marches of the 80,s look like a garden fete.
    People must voice their opposition to this lunacy and what we need is a focus to enable us to express our concerns if not outrage!!
    It is time for the ordinary people to take control of our democracy again and banish the remaining fools (The FF part of this Government) who are responsible for our current situation.

  26. Tim

    Folks, here is O’Toole’s quite forensic look at NAMA proponents Alan Ahearne and Frank Fahy in IT yesterday, in case you missed it. (I had, until Paul O’Mahony mentioned it today – thanks again, Paul.):

    Although some of us, at this stage, may feel like running mad, singing “nama nama nama nama na…. Batman!”, we must persevere and read everything we can about this and spread the word as far as possible, so that as many people as possible can understand as much about it as possible, before we let the decision go through.

    As for a protest march, BrendanW said it above: simply search Facebook for “no to NAMA” and the information is there about the 12th of September.

    When 120,000 workers marched last February to try and get the govt to protect jobs, it was an insufficient number of people, so the govt just laughed from inside Leinster House and proceeded, not to protect jobs, but to fire a few thousand teachers and Special Needs Assistants from our schools and our own children with Batty Batte’s cuts.

    To effect change, we will need a much bigger turn-out on the 12th, or they will just be laughing at the complacency of the Irish people again. Over 300,000 were unemployed by last February….. where were they on the day of the March to defend them?

    Over 4,000,000 people will be affected by NAMA; where will you be, on the 12th of September, when there will be a march to defend you?

    I know where I will be.

    • You are right about the complacency thing. I know some taxi drivers who have seen their livelihoods decimated by government policy but when it comes to marching its a good day if 600 of the 27000 odd in the country can be brought out on the streets.
      Only the old age pensioners have shown up the rest of the population for their amazing apathy.

  27. Deco

    I watched a documentary on this last year. They quizzed military historians, archivists, and former combatants.

    One comment that I remember now in the context of the current problem here came from a former German Army soldier. He explained how in the lead up, over the course of the campaign from the previous Summer, the propagandists had everyone hyped up. He stated something like this…. “we were full of our own importance arrogance, and were encouraged by our leadership to be really arrogant and to enjoy it. We really thought we were something. Yes, we were being told – you really are something fo great significance. It blinded us. We believed all this nonsense. We were killed because we believed in this stupidity. Then we were able to make the most stupid mistake.”. The old man was explaining the human problem of a buildup of arrogance. There was an abscence of dissent or reserve. It was all one way traffic intellectually speaking. Like Ireland’s property boom that was supposed to last forever. Until it ended. And that was everybody else’s fault (‘the unprecented crisis in the international environment’ as that creep Michael Martin kept saying.)

    Sound familiar ? Et tu….Bertosconi !!! The Pride Problem. We love our own significance. No need to apply intelligence, when you can talk about your significance instead. And the higher up the social scale, the greater the significance. And what better way to express your significance than in a massive pile.
    Pride, the Green flag, and a bottle of Guinness. The real troika that are leading Ireland to a massive hangover. Look around you to see what is really crippling Ireland, right now, right here. It is directly in our midst. It is what we have seen in the last two decades. And it kept building in a cruscendo until the Joe Duffy Bank run. And then it stopped and started to teeter. And the society was thrown into shock.

    Blind arrogance, obedience to a failing system, and substance abuse making Ireland into a failed state. Why fix the system, when you can chicken out of your responsibility as an individual and as a community ? It seems as chickening out is even cool. Just look at An Ceann Cearhairle. No better man to enjoy his pints, press the green button, and be full of his own arrogance. In fact, we have seen no evidence that he can do anything well, apart from these three activities. And he has all the stylistics of ‘a safe pair of hands’ in Irish politics.

    Lenihan is blinded by the need to restore the country’s superficial image. He thinks it can be seperated from the underlying reality. In reality the country’s image is a reflection of the underlying reality. Lenihan baffles me. Here we have a member of the establishment, and who believes everybody else in the establishment. He seeks to sell the concept of Ireland to foreigners the way it sold to most of us, by the establishment. But the depiction is in complete contradiction with the reality. The game is up. It is hard sell Ireland Inc., and nobody is buying it. The idea is to build a good name, and then we can go back to selling any old rubbish to foreigners….maybe even Anglo Irish Bank !!! We even had it two weeks ago with RTE and the Irish Times telling us a Canadian Bank wanted to take over AIB. Clearly Dermot Desmond did not want to get in their way when he threw his shares back on the market last week. It came to nothing. Not even a comment from the Canucks. Which is a polite way of waying ‘not a chance’.

    We have to reform our business and legal system. Cut out the pretence. There is no other way. The D2/D4 cronyism at the top in Ireland needs to be undermined and replaced. Ireland needs to be opened up, allowed to be meritocratic, allowed to be more honest, and competitive.

    There is a reason why NAMA is being called VietNAMA. It is a top down policy quagmire. The real tragedy of Vietnam was the way JFK, LBJ and Nixon all believed that if they put more in, they would be able to quickly pull out. In the end the only option was simply to walk away. If they walked away in the beginning the lesson would never have need to be learned.

    But politics is never about leaving well enough alone. Unfortunately. As exemplified by everything Bertie Ahern ever did in the past decade. The media never complements a politician for staying inside his own circle of competence.

    • Deco

      …. you will be all relieved to know that Bertie Ahern has now decided to stay within his circle of competence….writing about Man Utd for a trash newspaper……if only Rupert Murdoch had talent spotted him before he started out as a politician…..

    • wills

      Deco,. I’m very suspicious on this canadian interest, it quickly fell away from the news.

      The vested interests/crony capitalists network/bankster oligopolies/IBEC are prepared too spoof and punk us
      the serf taxpayer with whatever it takes too
      tide us over into the date set for NAMAs lift off.

    • wills

      tim, what exactly is this link too..?? thks,..

      • Tim

        wills, it is the list, for the last twelve years, of who gave money (and how much) to TDs and ministers and Taoisaigh…….. kinda tells a story…… From which we can formulate extrapolations of cronyism, I would say.

    • Tim , you have lost the plot ! , you are F. F. , remember or this season are U , too changing sides ?.,,, Even that list doesn’t have Every body , can’t find you yet though …. I’m moving to Argentina as There Superior Court ruled weed as non criminal . Here it is only a game if your a player .
      If I become THE SAVOR OF IRELAND , ( THEE EX PAT ?RAT ! ) , as a reality TV show , I would also have you shot , just for being in the party !

  28. Optimistix

    I agree totally NAMA is a disaster for us all. I’m an Entrepreneur who has invested, not in property but in the knowledge economy which means investing in people smart people with Ph.D’s, MSc’s and basically decent smart Irish and non Irish staff and I want to say I dont want NAMA because NAMA is not good for the new economy. This is not out of spite or bitterness but based on pure common sense.
    What we need now is a real debate which thankfully your column stimulates in spades. We need to ask why NAMA, why should we save the banks, why would we want to want to revert to higher property prices. The real question or debate is what kind of bank do we want to have? What kind of people should staff them, what risks should they take? what should they invest in? How should we fund this new bank? and who should they lend to?

    Its really sad to hear all the noise in the press about NAMA which to me is just a real spin by those vested interests who want to revert to the old days. When you go to these old cronies who bankrupted the country, their shareholders you will find that the only collateral they understand is YES land, property, deeds to the farm and of course cash on deposit. These banks are bankrupt not just financially but they are bankrupt of ideas mentally broke- They don’t understand the new world, the knowledge economy, the value of patents and most importantly they dont want to take the time to learn or even invest in the specialist that would understand. Instead they want the establishment to frighten the ordinary folk that we must go back to the good old days where they can handout loans to first time buyers- “safe as houses” banking model.
    The sickening thing is that we the people are being taken for fools. The lack of vision, of ideas, of a plan is just frightening. The spin by the government is get NAMA into play quickly, pay above the market rates so that these old fashioned lazy bankers can then see their old reliables land and property rise which then allows them to give out new loans based on the good old fashioned bricks and mortar banking model.

    Well I say No I say stop the con stop NAMA and change the guard. As a new world risk taker who doesn’t have the luxury of bricks and mortar assets. ( Don’t get me wrong I’m not knocking those lucky to have them) Instead I want my children to live in a country that values and understands this new world, thats values IP and that recognises this by being willing to lend against IP, patents and who cares about people who will take a risk and invest in Ireland and in its children.

    I totally agree with your point of view I say kill off NAMA, Kill off these bankrupt banks and retire the old fashioned bankers. For that matter we need to purge the civil service, the old brigade who want want to save the old world and go back to their old ways. I say NO.

    Instead lets start the real debate. l want a new bank, a new breed of banker, a new start. I want a future and NO NAMA need apply! Welcome back.

  29. MaxKeiser

    Oh Dear, has it come to this…but a great article & amazing comments posted. Well done one & all.

    2 things spring to my mind:

    1) “Taxation without representation is tyranny.” ~
    (Let’s face it & face it fast NAMA is more additional taxation & where is our representaion?)

    2) “Follow the principle that when one lies, one should lie big, and stick to it. They keep up their lies, even at the risk of looking ridiculous”
    [Joseph Goebbels]

    Or if you prefer the longer version:

    “All this was inspired by the principle–which is quite true in itself–that in the big lie there is always a certain force of credibility; because the broad masses of a nation are always more easily corrupted in the deeper strata of their emotional nature than consciously or voluntarily; and thus in the primitive simplicity of their minds they more readily fall victims to the big lie than the small lie, since they themselves often tell small lies in little matters but would be ashamed to resort to large-scale falsehoods. It would never come into their heads to fabricate colossal untruths, and they would not believe that others could have the impudence to distort the truth so infamously. Even though the facts which prove this to be so may be brought clearly to their minds, they will still doubt and waver and will continue to think that there may be some other explanation. For the grossly impudent lie always leaves traces behind it, even after it has been nailed down, a fact which is known to all expert liars in this world and to all who conspire together in the art of lying.
    [Adolf Hitler , Mein Kampf, vol. I, ch. X]

    I think really the more you look at the whole mess we are in be it the Economy, NAMA, Lisbon, ACC v Zoe Group, Fingleton & Irish Nationwide ~ it all the same thing…it sure aint capitalism rather a big “undemocratic” lie…

    For the first time in my life I will be marching against something (NAMA) Saturday, Sept 12th 2009, lunch time.

    • Josey

      The real Max Keiser is a legend…great post.

    • severelyltd

      Our unelected leader is polling at 15% approval. I think people are beginning to see through the lies. What frightens me most about NAMA is the that the legal responsibility for recovering the loans will be passed to the state. After the nonsense we have seen with ACC v Zoe I think this could bog down our justice system for 20 years providing an unending money supply to Solicitors and barristers, Lenihans homies. The net effect will be the developers will get away without having to pay a red cent or spend one day in jail and the taxpayer will be stuck with the bill as usual. The cost of tribunals will be a drop in the ocean compared to NAMA. Fianna Fail have already robbed this generation and are now attempting to rob your grandchildren. NAMA must be stopped. Roll on the protest on the 12th of September. Max Keiser is a legend. I highly recommend his podcast.

      • Only one crooked irish developer ever went to jail.His name was Gallagher.He didnt go to an irish jail,he was extradited to the UK and sent for trial to Belfast where he had defrauded thousands of small pensioners out of their life savings.
        I gather he is happy and doing well in South Africa or somewhere nowadays.He probablt met Seanie Fitzpatrick out there for a chat when Seanie was having a photoshoot handing over a small amount of Anglo Irish Bank’s cash deposits to Bishop Tutu to help him build a few better shanty homes for the poor.
        at least we would not have that problem if Brian Lenehan opened the doors of his new acquisitions to the poor and the homeless here at home..

    • The Eye

      PROPERTY TAX ?????? What about that huge ball of stamp duty you took from me already. Double Taxation anyone?

  30. Tim

    Folks, you may be interested in this guy:

    … he helped to create the spreadsheet I posted above. He is spreading information – useful to us all.

    • wills

      tim, excellent link,…

      • Tim

        wills, Yes. This gentleman seems to have a big horn for our Ceann Comhairle, but he has very interesting info on other matters; I think, from my communications with him on twitter, that he is using FOIs all over the place.

        About time someone did!

  31. Malcolm McClure

    In the context of NAMA it is instructive to consider how Spain is dealing with its parallel development bubble so that we can better understand what NAMA and Irish banks are doing behind the scenes to deal with excess housing stock at home and the multitude of flaky Irish investments in Spain.

    Spain has over 1,000,000 unsold homes, as many as the US, even though the US economy is about six times bigger. With roughly 10% of the EU GDP, Spain accounted for 30% of all new homes built since 2000 in the EU. Most of the new homes were financed with capital borrowed from abroad, so Spain’s housing bubble will generate a financial crisis like ours to add to our own. It is estimated that Spanish real estate losses will be over €250 billion when all is said and done. Yet Spanish house prices are down little more than 10% from their peaks rather than the 90% that is conceivable.

    Why have Spanish banks not experienced the same fate as American, Irish and UK banks? Clearly Spanish and foreign banks are unwilling to admit to the size of the problem and write off the debt. That is why the losses are being hidden.

    Spanish banks are now the biggest real estate holders in the country because they have had to ‘buy’ many developments from developers for the price of the mortgage. Thus they had converted a non-performing mortgage into a property ‘asset’. However, the bank is now the owner of a development it cannot sell and is unlikely to for a number of years and has a debt of its own in the purchase price ‘paid’. Spanish banks, like NAMA are not experienced developers/property marketers and thus are building up problems for themselves. Alternatively, there is the potential that they are then bundling these discounted properties on to friends or holding property companies with notional loans and interest being rolled up until the property is sold.

    Spanish banks have realized that instigating a bankruptcy process when developers can’t roll their loans or sell houses isn’t good for developers or for themselves. They now try to give as much rope to developers as possible so that they don’t have to report large defaults. Since the banks are fed up with taking on more assets they provide a line of credit so that the builders can at least pay interests on their existing debts. This gives them room for two years to see if things fix themselves and if they can pay the loan back.

    Ireland now has the highest rate of deflation in the world. Prices here are falling at an annual rate of 5.9%, well ahead of the drops in other countries. Ireland’s experience is what Spain will see more of in the months ahead as the economy slowly adjusts to new realities. Spain will become more like Ireland than any of its European neighbours.

    Spain and Ireland can solve their problems either through massive productivity gains, which is highly unlikely, or through a reduction in wages and prices in the order of 20-30%, which is what will happen slowly and painfully. Such an internal devaluation will imply large losses to domestic banks and to external creditors.

    Lisbon-a-sera señorita, its time to say goodnight in Inishfree.

    • Tim

      Malcolm, Thank you.

    • gibbonm

      Malcolm. You should credit your sources!.

    • Deco


      Your points are very instructive. They also point us to some fascinating questions.

      I have a theory on Spain. It goes along the lines that the Madrid is being very economical about telling the truth. There are some statistics that cannot be lied about. The number of people queueing up at the welfare offices. The collapse in house prices and rents. The collapse in spending by Northern Europeans-especially from Britain, on tourism.

      But the authorities can tell lies about the state of the banking system. And this is exactly what is happening. In fact I read an article in a British newspaper (The Sunday Times ??) after last years crisis, that Spain is broke. And that the ECB is bailing out Spain massively. And that the media is not supposd to cover this.

      Spain does not need NAMA, it has the ECB already doing it on behalf of everybody else. The ECB jumped in last year and bought worthless bonds off the Spanish banks – exchanging this for Euros that you have to sweat for every day. This effectively plugged their cash hole problem. And it prevented any of the Spanish ‘ANIB’s from going the way ANIB. Officially the ECB is supposed to be above politics. And officially the ECB is not supposed to favour domestic countries, or the banking systems of domestic countries. But this is clearly no longer the case. There were smaller bailouts of Hungary and
      Latvia. And then there is the current ECB support for the beleagured Irish banking system.

      This whole episode asks serious questions about the ECB. The argument that the ECB was supposed to be strict on certain misbehaviours is nonsense. There is no moral hazard principle in the ECB. The ECB will intervene to protect the rich. But this comes at a price. And this is real conundrum. We are supposed to think that we are getting something for nothing. Well that is not the way economics works.

      Currently there seems to be common aggreement not to discuss the Spanish banking system in the media, in the economic establishment in the Euro zone, and in the political establishment.

      Maybe David could write an article on Spain – and the fact that we are being forced to go ahead with NAMA, while for reasons that nobody can understand, the Spanish banking system is floating on a mountain of Euros. This has implications for the Euro project. Quantitive easing, as it is practiced in the US, and in the UK is transparent. But in Europe it seems to be some kind of big secret that nobody is talking about. The ugly truth about the state of Europe’s banking industry. Austria is another country in a serious predicament. And then we have other countries that have already attained full basketcase status, like Hungary and Latvia – in spite of ECB bailouts.

      There are an awful lot of people who think European banks are more secure than those of the US. They reassure themselves of this, as some kind of source of institutional and cultural superiority.

      If the truth was told, would this really be the case ?

      • Yes I was amazed to learn from an Austrian friend that their banks had loaned too much to eastern european banks/developers and cant get the money back.German money went west-Austrian cash went east!
        I believe even Switzerland has been imbroiled in the lent-but -cant-get-back madness!

      • Malcolm McClure

        Deco: The Economist had an interesting article on the Spanish property bust and how their banks are dealing with it:
        If the Spanish Central Bank have relaxed accounting standards once they can do it again and how an anyone believe anything a B Santander annual report says any more?
        The mirrors are broken and the smoke is clearing away. The notion of banking as an honest business activity is gone for good.

  32. wills

    Bloggers, check this link out for an example of irish politico ‘inside job expenses’ extravaganza melding into family business networking.

  33. Tim

    Folks, look:

    The Anglo 10 named

    August 24, 2009 in Anglo Irish, Irish Politics by Gavin Sheridan | 3 Comments

    Via the Sunday Times business section:

    1. Gerry Gannon, owner of the k-club. (Profile)
    2. Joe O’Reilly, developer.
    3. Seamus Ross, developer. (Profile)
    4. Jerry Conlan, healthcare. (Profile)
    5. John McCabe, builder. (Website)
    6. Patrick Kearney, developer. (Not sure which P Kearney this is)
    7. Paddy McKillen, investor. (SBP profile)
    8. Brian O’Farrell, developer and auctioneer. (Website)
    9. Gerry Maguire, developer. (Can’t find much on this)
    10. Sean Reilly, builder. (Website)

    Another interesting angle today too (seems like a newsdump). Brian Cowen/FF allegedly received a total of €65,000 in donations from member(s) of this group and others, a few weeks before the 10 met to arrange the Anglo share support operation. Cowen is said to have received it in €5,000 tranches for Fianna Fail, the Mail on Sunday reported.

  34. Tim

    Folks, I am listening to Garret Fitzgurgle (repeat on Newstalk) and cannot understand why he is taking his current stance. He is using jesuitical semantics to try and discredit the 46 economists who oppose NAMA in the press. Is this, at all, related to the £200,000 write-off he got on his mortgage in the early ’90s?

    I Dunno.

    But allow me to ask this:

    If you had £200,000 of a “pressie”, no strings attached (he claims), in the early ’90s (when £200,000 was a helluva-lotta money), would you not try and help that friend when they got into trouble in 2009?

    I dunno about you folks, but I know that I would, definitely, speak-up for my buddy!

  35. Tim

    If you pay rent, and your Landlord is a tax-exile or “non-resident”, the Revenue Commissioners” will pursue you for an extra 20% tax on top of your rent?

    What? Why?

    This is nuts!

    A provision introduced in 1997, apparently….

  36. pauline

    It seems to me it’s time to think about people starting their own banks, and letting the big ones fail….when they firesale the Irish mortgages we can buy them cheaper and correct everyone mortgage.

    In Australia, there is the Bendigo banks, basically community owned entities aided by Bendigo bank central.

    In 1998, Bendigo launched an innovative program to return branch banking to communities disenfranchised by the numerous branch closures across Australia during the 1990s. Community Bank® sees local communities form a company to purchase from Bendigo the right to operate a franchised Bendigo Bank branch. Bendigo provides banking support and revenue is shared with the locally owned company. By the end of 2006/07, more than 200 of these branches were operating.

  37. Gerald (Gerry)

    It is frightening to me that someone (ie David McWillaims) who has the privilege of being in a position to influence public opinion on matters of grave importance to Ireland and its people that he has the temerity and lack of responsibility to make cavaliere comments about NAMA and the possible other solutions to the banking/property/corruption crisis is Ireland today.

    And the use of emotional words such as “economic Stalingrad” futher compound his irresponsible approach. There is NO comparision of Ireland’s position and the tragic events that occurred in Stalingrad (for both Germans and Russians). This is a classic mususe of media journalism, at its worst.

    And , let us be honest, Ireland has recovered many times in history from tragic events where the comparison with Stalingrad can be more legimate eg The Famine, The Civil War, The economic downturn of the early 1980′s (and remember: we are much better off now economically than 1983-1987),

    So let us have responsible, non-emotive comment.

    David’s arguments against NAMA have been refuted byThe European Central Bank, A former, and extremely well respected, honest former Taoiseach & Min Finance Garrett Fitzgerald, An eminent barrister and committed public servant Brian Lenihan, and a very experienced, brave, also committed public servant Brian Cowan.

    Does David really believe they are so wrong and stupid that they would risk Ireland’s future and their individual public careers & reputations ?

    Or is he just a Performing Monkey dependant on making contentious comments that will generate replies from the public, thus raising his journalistic profile?

    Well, he has certainly succeeded in the later area – but look at some of the replies he has engenred -many of them bordering on a facist , anarchist thought process.

    Media people, journalists etc, have a huge responsibility to be careful about the effect their comments have on public opinion.

    Yes, it is quite legitimate to express their point sof view, but not if they have an ulterior motive other than the content of that viewpoint ; by this I mean that I have observed many times comments made in the media that are obviously designed to generate responses purely to stir-the-muck. There are points in history where this is patently irresponsible, and potentially dangerous.

    Ireland is at such a point in history – so please, no deliberate negative comment just to stir-it-up! We do not have the luxury!

    Gerry Clarke, Rathgar, Dublin

    • Tim

      Fascinating! Truly fascinating!

    • wills

      ‘David bordering on fascism’…………………!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

      slightly emotive don’t you think.

      • Gerald (Gerry)

        reply to WILLS:

        Did you not notice that the original comments that started this online debate included emotive words; but mine were not meant to be emotive – I was merely commenting on the tone of many of the responses that were engendered by those initial comments.

    • liam

      Remarkable. “So let us have responsible, non-emotive comment.” well I couldn’t agree more. All this talking down of the economy is so dangerous you know… honestly!

    • The Eye

      “Thank Heavens we are living in Rathgar”

    • Dilly

      “David’s arguments against NAMA have been refuted byThe European Central Bank, A former, and extremely well respected, honest former Taoiseach & Min Finance Garrett Fitzgerald, An eminent barrister and committed public servant Brian Lenihan, and a very experienced, brave, also committed public servant Brian Cowan.”

      I am sorry Gerry, but I would not even buy a second hand car from any of these organisations or people. It is time to end the charade that has been ongoing now for 80 odd years. Time to kick the old landlords to touch. I don’t care if they are household names, they are still rotten to the core. This crisis is an opportunity to get rid of the lot of them. Maybe then, people will take the Irish seriously.

      • Gerald (Gerry)

        Reply to DILLY:

        Come on – Garrett Fitzgerald “rotten to the core” – I would remind you that he is probably the only politician for many decades who would be considered “honest to a fault” by the majority of thinking people in Ireland, and indeed, internationally.

        Your reply reminds me of the catch cries of the French revolution – and you probably know the outcome of such emotionaly charged suggestions.

        • wills

          G. fitzgerald is a softie easily led and preyed on by slicker operators in the shadows.

        • Dilly

          I wouldnt trust him to sit the right way round on a toilet. He did not have much to do when he was in power, as Fianna Fail had already forced entire generations of Irish people to emigrate.

    • DavidIreland

      You mention the famine.

      One view of what happened was that the government of the time was so beholden to the merchant class that they let the country go down the tubes protecting them. Sounds terrifyingly like what’s proposed by Fianna Fail for Developers/Bankers.

      Speaking of Irish History:
      This NAMA business is the biggest payoff since the 12th century equivalent of Fianna Fail gifted half of Leinster to the Normans.

      Cromwell to his son: “Talk not down the economy of mercy here”

    • Well Gerry from Rathgar ( let me check on google are you up shot or Heroin alley ) …. I agree on your angle regarding the stirring and band wagon but the words of these men been worried about their careers ?..Get real you fool . This country has been rode quite literally the last decade and a half , forget our your priest and teachers riding and beating you . The third generation are useless and defuncted of Ideas , while we did pay silly money in Rathgar , ( we ) had moved out of Bray to Dalkey back in 89 . Mate why is that same house now worth 6 big figures ? ..It isn’t . I travel and have done consultancy work for Blue Chip Irish firms like Guinness and the ‘Dubs’ then rode the new Orish Publicans , Finna Fail have to be run out … And ( WE ) need a new political force with a salary of 40,000 and a two year project dead line.
      You while I’ve never met are part of this problem …look at Google , your a spec on the planet , you want to live in Florence , Italy or Amsterdam , Holland …. Dublin would have done fine for your address.

      • Gerald (Gerry)

        In Reply to BrendanW From Gerald (Gerry).

        Calling me a “FOOL” , saying I am a “spec on the planet” and obviously resenting that I live in Ratghar (where I moved to only in the last year) is a perfect example of the prejudiced, emotional reaction that a debate started with inflammatory words such as STALINGRAD and FANATICS can engender.

        As for implying that you have some experience through travel and working as a ‘consultant’ with Blue Chip companies qualifiies you to make informed comment on the matter under discussion – well, I have lived in the USA, China, Australia, The UK and Good Old Ireland (my favoutite and much loved country/home) ; I have worked for Blue Chip companies, and I can safely say that I would not engage you to work as a consultant for any of them, or give merit to any comment you might make on any issue of importance given the tone and content of your reply to my comments.

        • Gerald , we live in a technocratic age where global communication and commerce is the route we should be taking . So I’ll keep this reply brief as I don’t want to get too personal here as now the issues in hand are above personalizing, apart from questions that have to be asked such as Garrett Fitzgerald who got his AIB loan simply written off , it does not matter when this happened , it’s fact.
          We simply do not have the right people presently leading Ireland , the whole front bench of F.F. have no experience working in the ‘real’ world and are surrounded by paid ‘monkeys’ who you will find are generally there through family connections and not their credentials, Brian Cowen been paid more than the German Leader is simply wrong when you consider he has a direct staff of 210 in his Office. Leadership was needed this past summer and none was shown , why ?, because ‘they’ were taking their holidays so much about the greater country! Your examples of where we were before and how we survived these are all weak to from the famine ,the civil war and the recession of the 80′s , the general population is not better off today than then.
          We need David Mc Williams and other journalists to stay stirring the pot , as we have a chance here to change the system. I was at a conference in 2007 where we listened on the slow down in the American market and the under lying worry then of de faulting loans coming down the financial year, beside me sat a civil servant working for Board Bia , who laughed at this American smirking ‘ he’d want to come see how ‘we’ run a country as he’d got more for his house than his three estate agents had estimated !. the same man was laughing when I told him I was staying at a motel , if I’d been one of the government gang I would have of course been staying four stars …. now since again it’s sunny here in Malaga I’m off for a round of golf !

    • pawl

      Hello Gerry, it’s time for some non-emotive comment from someone who has a background in service and construction, I am very much a lurker here on this site but your comment compelled me to register, cheers.

      You know up to a year ago I would be have considered myself totally ignorant on world economics, however with the global credit crunch taking stark effect I naturally started to take a closer interest, The Internet provides plenty of choice, a vast abundance of information concerning world banking and economics and I Love it dearly, now let me share my shocking realization (without emotion) with you, It is that a clever basic economics graduate would have known the end was nigh for a property bubble that had to burst therefore brian cowen with his department of finance would have seen it coming too, right? and so as a precaution cowen could have taken preventive action to lessen the harm to this nation, he did’nt. He did ignore basic economics wisdom to facilitate elite greed. Regarding reputations his is in tatters but not with the elite if he can swing a successful nama.

      Many in this nation can be thankful to david and the commentators for providing valuable information and very well informed opinion, Gerry we have freedom of speech and will use language in any colour we choose, some of us yell out loud when we feel pain and will yell louder at brians promised pain, believe.

      So you say media people have a responsibility to be careful about the effect their comments have on the public?

      This is where you would prefer halftruths and lies to the facts?

      The public will react to comments anyway they choose, the commentator can hardly be blamed for public reaction to information.

      David Mcwilliams is not a commentator on the six1news you would do well to remember he provides a completely different style of journalism.


  38. MaxKeiser

    Thanks Josey & amazing post Malcolm McClure.

    There is a bit of feeling that we are on the brink here with:
    NAMA, Lisbon, the constitutional status of the Supreme Court’s decision being final – which the Zoe Group (ACC v Zoe Group – Liam Carroll) has been able to subvert.

    Put simply the legal system allows you a hearing & an appeal, the Supreme Court is the final court of appeal & they have already rejected Zoe’s application.

    Would you or I be allowed to go back to the Supreme Court with the same case? ~

    The judge has said that it will take him a week to deliberate which brings it right up to the NAMA D Day, ops sorry that should that be Stalingrad Day.

    Most curious timing me thinks…

  39. mcsean2163

    The way I look at it…

    The NAMA loans in total are about 90billion. The state will pay about 65billion for them. A considerable amount of these loans are not impaired and all loans will pursued, (the developers are not let off the hook). Take McInerney, who wroite down 50% of the value of their assets and dot the same so the loans are now worth 45 billion. Say half of them are impaired, that leaves a 10billion loss.

    Big deal!

    Break up the banks and there’s about another 35,000 people unemployed. I don’t even believe it’ll be as high as 10 billion. Stop the nonsense, do NAMA, life goes on and the economy recovers.

    • wills

      “the state will pay”, “the state”, whats his address i must give hime a ring for a few bob…………….

      • mcsean2163

        Haha Wills. You are funny. Maybe you should have a television show!

        “the state”, whats his address i must give hime a ring for a few bob…………….

        Very funny, haha!

        As, I’m sure you’re aware the state is you me and everyone else in ireland.

        At the end of Q2, national debt stood at 65billion and rising. My estimate gives a worst case scenario of 10 billion loss. Our debt will have doubled in two years, who gives a **** about an extra 10 billion on top of it.

        Move on. If take a population of 4 million, (it’s more), that an extra €2500 per woman, man and child, what’s the alternative, howmuch will it cost?

        The important thing to do is stop spending all the billions we don’t have and get the economy going again. Pronto. I for one certainly do not wish to throw a spanner in the works and derail a potential recovery.

  40. mcsean2163

    I would like to organise a march in favour of NAMA and notions such as, “a serf neo feudal system transferring their wealth etc.”.

    I am an electronics engineer and have notjing to do with building but surely it’s obvious that most of the developers are self made millionaires?

    Go NAMA!

  41. brenr6


    Nobody in this country could not be cynical about politicians and their possible motivations and yet we continue to vote the same people in because there is little or no viable “sane” alternative. This has aways been the way and its an experience that is shared in other democracies I have no doubt. Thats life I guess.

    Despite this cynicism, I still find it hard to get my head around the fact that an entity like NAMA would be pushed through to protect a limited number of priveleged individuals at the expense of generations of ordinary Irish people. I am no lefty paronoid anti- everything looney but could this really the case?

    Lets face it we will pay while those reponsible have already insulated themselves from the terrible affects of their excesses. While our children may not be in a financial position to go to college, the children of these people will go to the right schools, get the right qualifications and create yet another generation of an elite who cannot be held accountable by the system because they are in fact the proprietors of the system

    Like many people, I am seriously terrified of what is to become of this country. I feel inside me a bubbling rage at the situation we find ourselves in. Rather than it being our Stalingrad, it could in fact be our holocaust and we are all waiting in line to meet our fate.

    If NAMA is in fact a tool to preserve an elite then we can all truly despair of this country. The State has betrayed its people, why would anyone stay if they have an alternative?

    • Malcolm McClure

      brenr6: NAMA may be a tool to preserve the elite, but remember:
      “What’s good for General Motors is good for America”.
      –Until it wasn’t.

    • Dilly

      I have a wealthy uncle, and I met him recently. He is hard to like, but he always speaks his mind. He wants NAMA to succeed, his reason is simple, he is a Bond holder. He doesn’t want to lose, because he is used to the win win politics of the last 20 years. He knows all about the brown envelopes, and openly admits that it still goes on despite the tribunals. To him, that is just they way things are done in Ireland. But, he does not want to lose, and NAMA is his golden ticket.

  42. MaxKeiser

    brenr6 ~ very well said, the State has betrayed it’s people & it’s a case of leaving this country ( you’d not be the fist nor the last) or getting a viable alternative in place fast.

  43. It is frightening the sensationalist views being expressed by media and academia of late – and sorry to see David McW is now part of that band wagon.

    NAMA is a workable solution – and no alternative (other than red herrings) has been put forward – so we have to go with it. The trick will be to get the valuations at point of transfer to be as realistic as possible. It will mean significant dilution of shareholder value, particularly with AIB. This process has thus far worked well for the UK Government where it has (on paper) doubled its investment in Lloyds and RBS – and it still has a fluid exit mechanism in place through the existing listing on the stock exchange of these banks.

    Can you picture full nationalisation of the Irish Banks! How is the Irish Government going to take over the banks; and even more terrifying – how will they exit them!! Tempory nationalisation – dream on….


    • Tim

      PhilRuss1, “NAMA is a workable solution…..”

      Ah, yes, Mr investment manager, sir! It is a workable solution…… but for whom? to whose problem? At what cost to whom?

      I will be very interested to read your answers to these questions, for a start.

      • wills

        tim,,, don’t you know tim…???? we’re all in this together..???/ we all gorged on easy credit../// we all ate at the trough…. ???/

        Chr!st these pro NAMA loons are in serious denial,..

        amazing how hey refuse to accept some of us where sticking to virtue over gluttony.

        • Tim

          wills, just click on PhilRuss1′s name there in blue…… you will then see his investment company’s web site.

          Of COURSE they would be pro-NAMA…..
          It will transfer our children’s future earnings to them.
          It is a sort of pro-spective income-abortion.

    • liam

      I don’t believe anybody is stupid enough to believe that this won’t come at a massive cost in the short term whatever approach is taken, but NAMA as it is currently proposed will give the exchequer and the taxpayer zero comeback on this pain, as well as the opportunity cost of implementing NAMA. Nobody outside of a psychiatric institution actualy believes that the bubblicious asset values of the last ten years will ever return to close to what they were, There is absolutley no precedent in history for the kind of fantasy numbers of ‘long-term economic value’ the Brians are talking about.

      “Can you picture full nationalisation of the Irish Banks!” -yes, if the assets are bought at real market rates (not the ones inflated by the existance of NAMA and the taxpayer’s bottomless pockets), then the debt for equity arangements of the resulting recapitalisation will leave the exchequer as majority shareholder in the banks anyway, plus it means we have an asset to colateralise the recapitalistion costs: the Banks themselves. So we might as well cut to the chase.

      Can somebody please explain to me what is wrong with this plan, before my head melts… seriously, anybody?

  44. “The Developers Party” gave tax breaks to their cronies to build apartments/houses in the middle of a boom bubble.
    Now nobody can afford to buy them (even at half price)
    The Developers Party”, then gave tax breaks to their cronies to litter the country/city with surplus hotels & golf courses.
    Now nobody stays in them.
    “The Developers Party” then proceeded to give the same cronies more tax breaks to buy and build private hospitals everywhere.
    now the VHI is haemorraging (unemployed) clients.
    Thus nobody will ever cross their doors either.! and many will be thankfully be mothballed.
    The Developers party” gave their builder pals tax breaks to build/ buy /convert properties into old peoples nursing homes.
    These appear to be the most resilient speculators cash cow on the list despite an apparent cartel in nursing home prices all of which still range from 4000-5000 Euros monthly.
    Then again once your loved one is ensconced,it is very hard to pull her out again (unless you are unememployed and have the time on your hands to care for them in your own home)
    if you do- no way will you Mr Ordinary citizen get a subvention of 500 Euros per week from the Black Madonna (Ms Hearney) for your trouble.
    Now after the plethora of tax avoidance incentives for their pals has
    destroyed the whole financial system,and left the country bankrupt- NAMA will mothball the developers assets and hope they will- Larry Goodman like- rise like a flock of Phoenix-like vultures rise from their own ashes and resume business as usual within the next decade.
    David is absolutely right about the opportunity which has presented itself-but only for an honest government who do not owe their souls to builders,&farmers/landowners

    • wills

      Tirnanog,… gem.

      One thing, these crony gombeen money grabbers are above bankruptcy and make no bones about it have stashed the billions
      in secret far from the reach of the law when properly enforced.

  45. Mother Lenehan, the surrogate mother hen is readying her nest for the new eggs.
    We are told that there will be around one hundred very fat chicks, and another 1400 smaller birds in the first brood.!
    There was great trepidation that they would all turn out to be bad eggs. They will will be succored and nourished and carefully cared for by Farmer Cowan.
    They are all fat, healthy chicks and will continue to cosy up under the wings of Mother Lenehan for a period of indefinite duration.
    Details of the chicks, their general wellbeing, and their new nest, will be kept confidential. This is necessary to protect them from predators (creditors) and the wrath of impoverished citizens.
    A new 60 billion Euro aid fund mirrored on the CAP (Common Agriculture Policy) called DAP (Developers Aid Policy) will be set up to ensure their welfare.
    It will be supervised by the Soldiers of Destiny, and funded by most of the 4 million odd peasants on the island of Ireland.
    The lucky chicks will continue forage for scraps until it is deemed opportune for them to range free, and go out into the wide world of property one more.
    Enough of the NAMA nestlings.
    My letter in the Irish Independent yesterday:
    “Many thousands of those people (single or married) —now unemployed-who have purchased apartments/homes at the height of the property boom have the interest element (90% or more) of their substantial mortgages paid for them by Social Welfare.
    This of course encourages them to retain their negative equity assets and not walk away from the bad deal, thereby avoiding total meltdown of a crucial cash flow into the banks & other lending institutions.
    Some questions worth asking are:
    What is the monthly exchequer bill for such payments —for example the past 6 months.
    Are such payments (obviously still increasing monthly) sustainable in the long term ?
    If not what will happen when the supports are withdrawn.?
    Will house/apartment owners be allowed to remain in their homes in a situation when the support is withdrawn by the state and the banks are no longer getting paid by impoverished house owners ?
    Are such payments a “stealth” support propping up the financial institutions and —in the light of the forthcoming NAMA takeover of large toxic assets- hiding a dreadful scenario which will worsen the banking institutions dilemma in the long term, and require a second NAMA bailout of the many thousands of “single toxic asset” holders.?
    Are the payments made by the state to many thousands of now- unemployed house buyers,in order to finance the interest element of their loan repayments, sustainable in the long term ,and if not will these homes be re-possessed by the banks in due course?
    If Mr Lenehan pays the banks a price for their toxins twice the the generally accepted 30% of peak property values What new economic miracle is he expecting during the next decade, that will return the price of a tiny one bedroom apartment in the Dublin area to 60% of its peak value of cerca 320 thousand Euros.
    If Irish banks ever re-open for business again,they may find less customers applying for property purchase finance. .Government employees will be their main customers.
    Neither employment, nor peak wage levels will ever approach boom levels again.
    Taking on board the crippling taxation and spending cuts that will be required to redeem the banks, it is inconceivable that even well located house prices will ever rise above 50% of their peak prices. Small apartments and houses in towns and particularly in outlying areas may fall by much more.
    Does Mr Lenehan believe that previously desirable properties, such as small one bedroom apartments in good locations in Dublin which sold for cerca 320 thousand Euros at peak-and which some developers are currently marketing for 160 thousand Euros- will ever again fetch more than that price? “

    • wills

      T,.. this perspective on the property holding reality born out by the new flood of home owners on the scrap heap of joblessness is apocalyptic.

      The calculus on it is devastating and unsustainable. It is in my P.O.v the ticking time bomb sitting under the desk of the gov.

      There is no way in hell can this tax funding thru bond issuance thru ecb borrowing through too social welfare ballasting for these eejjittts who purchased homes at bubble prices keep flowing, it’s impossible.

      And the outcome will be tap off, and then this new unspoken of underclass will secure funds from where to pay mortgages 300% over real property value for another 25 years//….

      This is a tremendously significant point this newly created under class who are left with eggs on faces and in dire debt.

      The stress and worry 100’000s of these people are in now is very concerning.

    • Deco

      The Greens have given their stamp of approval to the project-on the basis that no flies were eaten, the henhouse was made from recycled timber, and the hens relied on organic oats for their diet. Go on Dan, Boyle us an egg !!!

  46. “The good the bad and the ugly”
    The legend of Black bart Ahern:

  47. Response to Tim and WIlls:

    Yes it is a workable solution: Because it frees up banks to lend (responsibly) to the economy – that is the point of NAMA. For the benefit of the country. Within a meaningful timeframe – as in as soon as possible. Time is not on our side….

    (With hindsight) the blanket guarantee given by the Government to the Banks set the agenda for the current policy. That was the time to let the banks fail – and it would have meant IMF support. The Banks were not let fail. And similar systems in England have (thus far) given a return to the taxpayer already.

    A significant shift in the arguements being put forward by Brian Lucey and Co is that they now accept NAMA as the way forward – however the concern is getting the valuations right. In January these same economists dismissed NAMA out of hand. Does that tell us something?

    The staggering thing now is that in all coverage including this forum there is hardly a mention of regulatory reform – the lack of which led us into this mess. Why is there so little of this subject being put forward by media and academia – rather they persist in sensationalism – why? Because it doen’t satisfy ego’s and career prospects etc.


    • Tim

      PhilRuss1, thank you. You did not answer the questions I asked, however.

    • liam

      Thank you Philip for bringing that up.

      I think you will find plenty of discussion on the problem of regulation or lack of it as a consequence of bad government. If you have some expertise in banking regulation to bring to the table then I’m sure that would be welcome.

      Most of us are here because we want to learn more, and nearly all contributors are anonymous. While I certainly don’t want to be surrounded by a harmonious chorus of my own opinions and prejudices, It would be really great if we could continue to debate the facts so far as we are able to determine them, and not attack each other’s motives.

      Happy Trails.

      • Liam:

        I would hate to attack an individual and hope my comments are not personalised – but if a David McWilliams; Brian Lucey; Brian Cowen have put themselves under the spot light – then I would refer to them in that light.

        Before your head melts – what is wrong in the scenario of ascertaining a workable valuation of the loans that are to be transferred to NAMA and the Banks go to the market with a rights issue (not discounted) underwritten by the Irish Government?

        It means the Irish Banks remain listed on the stock exchange even if for example AIB were 95% Government owned. It gives the Government (and taxpayer) the opportunity to stagger their exit over a period of time which gives them the best chance of maximising their return.

        Thus far this approach in the UK has worked extremely well for the their Government with their stakes in RBS and Lloyds. So much so that the Government doesnt want to sell any of its shares – despite having doubled its investment over 6 months!


      • liam


        Understood on the comments, I missinterpreted, my apologies. In which case, plus comments from us lot.

        i meant to point out that is exactly what the British are doing. In answer to your question, there is nothing wrong with this in princple, but there are two substantial risks.

        1: The valuation problem Others have debated this far more intelligently than I but I think you will have observed that I believe the Irish taxpayer will pay too much as things stand. Whatever the rate that is set though, there is a finite risk that the exchequer will lose, possibly substantially, on these assets. It seems therefore that in the face of such uncertaintly, the logical thing to do is to minimise exposure by paying as little as possible for the assets.
        The difference between a high or a low discount rate set for the bad debts NAMA purchases is not a zero-sum gain: what gets spent on the assets is dead money in the short term, what goes in to recapitalisation directly and immediatly stimulates the economy, keeps the credit starved mom and pop operations liquid, funds start-ups, etc etc. Even if the exchequer breaks even in real terms or makes a small profit on the asset investment, there is still opportunity cost, which brings me to my second point.

        2: The credit inertia problem. The less the exchequer spend on the assets, the more there is available for recapitalisation, which will go in to the economy as loans (and lower the opportunity cost of fixing this mess) and which will produce a direct return to the exchequer in the form of bank equity in the de-facto nationalised banks, realised through the exit strategy you describe, or by the refloating of the officially nationalised banks. The problem is how to compell the banks to stop hoarding cash and to lend. I take your word for it that a state-backed rights issue would do this, so long as the regulatory reform you mention is already in place, but how long would that take to set up? Nationalisation would certainly force the issue.

        No same person is opposed to the core concept of NAMA, even our host here proposed something similar last year. What is utterly wrong is the overpayment for toxic assets and the bail-out of commercial entities with taxpayers money, with zero oversight, that NAMA as it is currently proposed represents.

        • Well there we are Liam – our arguements are not too far apart at all – yet it has taken numerous comments; time etc on getting this far. And sadly that was really my original reason for contributing – the time being wasted by the better qualified people (as you mention) than you and I. These people should be working together – that includes David McW (*altho he is doing his bit in promotting this country abroad) – effective financial regulation being top of the agenda.

          I see the whole debate being politicised; being sensationalised – for whatever reasons. Out of all the contributors on this topic who would actually like to be in the shoes of any of the developers – seriously. Come to that who would like to be in Brian Cowen’s shoes? I dont think anyone is getting off lightly on this.

          And as has been pointed out by others – our course was set once we gave the blanket guarantee last October. That action may well turn out to be the most disastrous decision ever undertaken by this State – yet very few called it as such at the time.

          If we want a longterm solution then I suggest we make this country a nice and secure place to live – which will bring about immigration and sure dont we have the houses built already for them!


        • wills

          I am a fully against NAMA all the way down too the bone Liam.

    • wills

      one fiction after the next after the next to scaremonger the eejits into handing over their tax earnings to pay for the money grabbing slopz at the top orgiastic gross and sick price gouging and profiteering off the backs of the weak vulnerable and easily led.

    • wills

      You mean we have regulators….!!!!!?????????????????????????????????????????????????????????

      • Deco

        In Ireland we have a certain breed of regulator. Somebody put in charge or regulating a commercial sector, who has loads of pals in the sector, whose interests willnever be challenged.

        Like the way the consumer protection agency ‘employed’ the ‘skillset’ of the ex-Taoiseach’s ex-girlfriend. Or sNeary playing golf with the bankers, the same bankers that were throwing hundreds of millions at those dodgy high Octane developers….The regulators are an essential part of ensuring that there was no regulation.

  48. Deco

    In Ireland people can go a long way, achieve high position in the state, even if they know nothing about maths…..

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