Super Tuesday – NAMA & Live Links

NAMA First Loans

47% discount across the board (1st Tranche).

€81bn worth of loans (in total).

Cost of NAMA haircut = €38bn (estimate).

Update Adding the haircut and the recapitalisation costs together doesn’t make sense, so I’ve removed that calculation.

Consensus view seems to be €32-33bn recapitalisation costs. Per Philip Lane at Irish Economy.

The current projection is that the State injection into the banking system will soon stand at €33 billion or so …

€33 billion is about 22 percent of GDP (26 percent approx of GNP).

This is broadly in line with doomsayer Morgan Kelly’s estimate of €30bn in September 2009.

RTE Radio
RTE Live
NAMA text tracker
NAMA on thepropertypin

See also http://www.sluggerotoole.com/index.php/weblog/comments/nama-fit-for-purpose-the-banks-or-biffos-governmentGreenflag recommends

David McWilliams on the Keiser Report

  • Justin Case…

    Mack,

    No offence, I know you are still quite new to this, but this is a very poor way to blog.

  • Mack

    Justin all sites have moderation – spend some time on any forum (thepropertypin, politics.ie, askaboutmoney etc) and you’ll find that your comments will be moderated when you are not adding to the debate, drifting off topic and not being constructive etc. I’ve experienced it myself, it doesn’t feel good, but overall it is beneficial for the site.

    If you got something to say on NAMA, feel free to say it by the way. If you find it boring maybe another thread would suit you better.

  • Justin Case…

    This is a site for blogging and debate, however all you have done in this thread is post a couple words and then pressed enter behind them. That is what is commonly known as lazy blogging. Therefore I have every right to note my disapproval, and in the case boredom.

    Just so I know, what experience did you have before you became a blogger on slugger? Did Mick ask you or did you ask him for blogging rights? Do you think you have added anything to the site so far?

  • Mack

    Ah right – so it was the lack of detail in the post that riled you? Your criticism would have been more constructive if you made that clear from the offset. I’d certainly welcome constructive criticism.

    Tbh, I think short posts highlighting breaking news distilling the most important points (i.e. with NAMA the cost) and providing live links is fair enough. It’s worth pointing out that just because you don’t find it useful doesn’t mean that others won’t.

  • Cynic2

    They clearly need advice from our own First Minister who seems to have remarkable facility for property development and assessing the true value of development land as in this alleged case

    http://news.bbc.co.uk/2/hi/uk_news/northern_ireland/8595547.stm

    I suggest that the Irish banks immediately co-opt him as a Director. With Peter and with Iris’s contacts they’ll sort out the bad loan book in a fortnight

  • Impartial Reporter

    Which large Northern Ireland developers or properties have been ‘adopted’ by NAMA?

    Any truth in the rumours that Anglo Irish are sticking a landmark Belfast development into the programme?

  • Drumlins Rock

    justin, the only time short bullet-points like this are acceptable is for “breaking news” on a major issue, NAMA is a major story, for NI as well as the south, and these are the major details as released about an hour ago, therefore in my opinion it is perfectly acceptable exception in this case.

    Mack, scale fo 1-10, is it much worse or better than expected?

  • Alias

    So, are the banks now lending money to Irish businesses (as such is the declared purpose of forcing taxpayers to assume responsibility for the debts of private corporations) or have the government simply ensured that the systemic risk to reckless lenders within the eurosystem is averted, as is the actual purpose of the theft?

    These banks are bankrupt, and will continue to lose tens of billions a year for the foreseeable future. They are not in any position to lend money to new businesses, and so the enterprise economy will continue to slide back into the post-war era.

    What the State should have done is allowed failed businesses to fail, with the lenders assuming responsibility for their own losses, and either form a new bank (with 5 billion capitalisation and contingent leveraged funding of 50 billion) or allowed successful banks to take over the running of the failed banks.

    This is simply digging a deeper hole…

  • Greenflag

    mack,

    Thanks for the links and a belated thanks for that link to McWilliams and the Keiser report a week or so back . Night be no harm in reposting same link to give some ‘context’ for the NAMA .
    I assume you’ll be posting your considered ‘review’ when the dust up settles . Will comment tomorrow as I’m on the road .

  • Justin Case…

    Mack,

    Any luck with answering the other questions re previous experience?

  • Drumlins Rock

    shut up justin, most of macks posts are pretty good giving us a view of whats going on in the economy down south, its hard to work out just what state they are in, and I still dont know if todays news id better or worse than expected, maybe you can give us your opinion on NAMA justin?

  • Justin Case…

    Drumlins – chilax.

    I am only trying to figure out what Mack’s previous experience was.

    You may not remember, but I posted here manys a year ago, and the class of blogging as well as comment was far superior to what it is today.

  • Alias

    Justin Case, then why don’t you provide us with an example of what you consider to be worthwhile comment. So that our lowly ilk can aspire to it? Hopefully it amounts to more than whinging about the quality of other contributions…

  • Justin Case…

    Take a look through the archives.

  • Panic, these ones like it up em.

    Should the banks be required to fly the Hammer and Sickle standard or adopt it as their new logo.

    Is it socialism or communism that the Banks require to bail them out.

  • PJM

    The discount NAMA is taking off the value of the debts is much larger than originally expected. This is theoretically good for the taxpayer as it makes it easier for NAMA to make a profit at some time in the future (your guess is as good as mine whether or when that will happen). Unfortunately it also means that the banks need more recapitalisation money right away.

    I have no expertise in finance but the experts looked and sounded grim on today’s news. One also pointed out that the gap between what it is costing to keep Anglo-Irish Bank (not AIB)open and what it would cost to shut it down is narrowing.

    It is clear that Lenihan’s initial guesstimates as to what it all would cost were optimistic – something his opponents claimed at the time. The big question is whether this really draws a line under the crisis or whether we will have to inject more cash later. If so the fears that Lenihan was pouring money into a pit will have been realised.

  • George

    Impartial Reporter,
    “Which large Northern Ireland developers or properties have been ‘adopted’ by NAMA?”

    None from the first tranche apparently but that’s just the top developers. They will come further down the line I suppose.

    Mack,
    although it is possible the haircut on subsequent tranches will be less.

    Not necessarily. There is no guarantee that the smaller developers have invested more wisely. For example, the recent case in Athlone where the land was devalued by over 90%.

    The haircut could increase quite significantly “going forward”.

  • Mack

    Hey Justin – I thought this was fun

    http://www.googlefight.com/index.php?lang=en_GB&word1=site://http://sluggerotoole.com++“Justin+Case”&word2=site://http://sluggerotoole.com++”mack”

    I’ve not answered your question because it was delivered in a pretty obnoxious / condescending way and you haven’t made a single comment on topic. All my contributions are also available in the archives, unless you went by a different handle I couldn’t find many older than a month or so from you..

    George – absolutely. It’s bad enough as it is, so let’s hope not.

  • old school

    It was estimated up to 2 billion in property in the 6 Counties could be “dopted” by NAMA.
    This will be thrown onto the market someday en masse, and will knock down the value of every house or apartment in the North.
    This will have a serious effect on property values.

  • aquifer

    So when do we invite the nice Saudi and Chinese bankers in to lend us some real money?

  • Impartial Reporter

    Is there any truth that Anglo Irish are into Odyssey for almost £60 million?

    Will it enter into NAMA?

  • Mack

    I’m pretty sure the O2 (the new revamped Point Depot) & the new Grand Canal Theatre are / will be in NAMA. They’re profitable going concerns and the loans will be repaid in full.

    All loans over €5 million have to be NAMAised (I think) to prevent adverse selection.

  • Mick Fealty

    George, any chance of getting you back into harness?

  • The country is up to its ears in debt. The banks are still not lending to deserving businesses. There is a freeze on employment in the public sector, and the brainiacs on Slugger are arguing about style over substance.

    No doubt about it – we’re doomed…

  • jtwo

    As all Anglo property loans will eventually transfer to Nama then the Odyssey will end up on their books unless Sheridan can refinance with another lender. Other northern developers who are Anglo customers include PBN, Jermon and the Hegarty family in Derry.

  • jtwo

    Ewart, which is one of Belfast’s biggest property firms, also has business with Anglo – last big deal they did with them was to refinance their German portfolio- though I think Ulster is their main bank.

    Ewart are also the proud owner of the Soloist a ‘super prime’ office block near the Waterfront Hall which has no immediate prospects of getting a tenant at the rate they would like to charge. Similarly the amount of space pre let in the commercial part of the Obel is close to zero.

  • jtwo

    Michael Herbert had also been an Anglo client. The below gives an example of Anglo’s rigorous lending practises which have left us all heading for the sunlit economic uplands.

    http://www.tribune.ie/archive/article/2005/may/22/northern-tycoon-builds-on-chicks-and-mortar/