Well, this is painful… NAMA March 30, 2010
Posted by WorldbyStorm in Economy, Irish Politics.trackback
The National Asset Management Agency is to apply an average discount of 47% on the first loans it will acquire from the five financial institutions involved in the scheme.
This means the agency will give the banks just over half of what the loans were worth on the banks’ books.
This is well ahead of an average figure of 30% estimated by the Government last year.
So much for that then.
Speaking in the Dáil, Minster for Finance Brian Lenihan has said that the country is now fiscally stable and credible. He said the scale of the damage is now known.
Well, that’s not okay then. And what of this for a self-exculpatory statement…
Minister Lenihan also said that senior figures in banking had made appalling decisions, which the taxpayer will pay dearly for, for years to come.
Senior figures in banking? Oh them. Yes, indeed. But by no means restricted to them.
And what of this?
Meanwhile, NAMA chairman Frank Daly said its guiding principle had been to safeguard the interests of taxpayers by taking a ‘scrupulously objective view’ of the value of the assets and the security attached to every loan.
Mr Daly said the process has been rigorous and tough and that he was surprised at the lack of security on some of the loans.
He said the level of co-operation NAMA has received has varied.
Surprise at a lack of security? A varied level of co-operation? Well I never.
The Cedar Lounge Revolution 
“Minister Lenihan also said that senior figures in banking had made appalling decisions, which the taxpayer will pay dearly for, for years to come.”
And senior politicians have made appalling decisions which resulted in the taxpayer paying dearly for the appalling decisions of senior bankers.
Like most others on another thread here, my initial reaction to the public sector deal was anger that the union leadership had sold out their members (including myself). Now, with the NAMA news and the collapse of Quinn, I wonder might they not have saved a tiny something from the wreck of our state and our lives. We are giving fifty thousand million euros (and counting) to a bunch of criminals, we weren’t asked in any way about it, and we don’t have the money.
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It’s utterly stunning. I was reading how some were blaming Sean FitzPatrick for the state of the place and thinking, well, that’s hyperbole. But it isn’t in a sense. A very very small group of people, arguably including those in government today, were privy to decisions that have got the entirety of the citizens of this state paying, not just this year, but next year, and the year after and so on across a decade or more for their self-indulgence, their fecklessness, their ideological predisposition to ‘free’ markets and no regulation.
It is truly criminal. And it dwarfs the unions stupidity in agreeing to the deal to the point, as you say, that that seems almost reasonable.
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Agree. It’s back to the Golden Circle.
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The Chinese were considering the death penalty the other day for some Rio Tinto executives who are accused of fraud and corruption on a grand scale. Barbarism of course, not to be condoned, but at the same time it does put the enormity of the fraud and corruption in this state into stark contrast, where the government was and is a willing collaborator and where the criminals will walk away unscathed and still consider themselves to be patriots and heroes who were doing it all in the national interest. Sickening.
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Barbaric maybe but a counterpoint to self-regulation or ‘light touch’ regulation, eh? 😉
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You have a point there.
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The Unions have done a crap job on this.
They should have shouted and organised when the first round of cuts came, when services were being shut, class sizes increased and so on.
Instead they waited until it hit them in the pockets rather than their actual working conditions. I only know of the Education and Health sector and with the various cutbacks between services, facilites for patients, for special needs children and so on. Then of course the reduced staff numbers has added to the pressures.
Their jobs are far harder today than they were two years ago and they are on 20% less with feck all chance of promotion.
So we are left where to many of the public, cuts = cuts in public sector pay rather than cuts in services.
They are having this banking enquiry, why though when it appears that the crux of the whole thing took place the day after the investigations remit ends.
And the added Anglo bailout wont help the Unions sell this.
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That’s very true. I was talking to a CPSU member last year who had thought more or less exactly the same. Once the unions shifted it from cuts to pay that was a big problem because whatever the reality the perception develops.
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I’ve been working in the public service since 1983. I was fairly active in my union up to about 2000. During that time 90+% of members were not active at all – didn’t turn up for meetings or engage in any real way. But I got a bit disillusioned with the time I was spending in union activity when I saw that greed and self-interest was at the heart of an awful lot of what the union was doing. Members may have agreed with calls for improved service to the public but their primary concern was what the union could do for them – in terms of the few bob.
My experience is that most members only get angry when their pay is cut or there is a threat to their pay. That’s when they’ll take action. They may be against cuts in service to the public but they won’t take action against them.
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[…] What a fucking day. Started with the unions’ unconditional surrender, continued with the unimaginable, incomprehensible, unconscionable extent of the government’s economic sabotage becoming evident, and it’s ending with national […]
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But, a deep cynicism, and wariness, and weariness is found in most union members. The attacks haven’t helped either.
I think that sort of puts a finger on something I’ve been struggling to identify: it seems as if much of the response to the crisis from the unions, and from workers in general, has been less political, in the sense of identifying and taking on an enemy or class of enemies, and more pathological: the response of a traumatised patient.
The government have successfully sold the notion that this is less the fault of human actors, or more accurately, classes of actors, and more of an impersonal illness, affecting our society as a whole: a view which is helped along in turn by our tendency nowadays to see illness as our own fault, a matter of unwise ‘lifestyle choices’.
And in turn, this pathologising of experience helps the govt. with its lovely, inclusive talk of the mistakes ‘we’ all made to share the blame from the woman who took on a mortgage that she couldn’t afford all the way up to Seanie F. -and somehow render them commensurate – a trick which in turn makes the incantation that the pain must be shared more seductive; for just as a cure can have side-effects on ‘innocent’ parts of the body, so will all of us have to suffer perhaps disproportionately…..
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Insightful, SofS.
Patients are expected to behave in a particular way, to earn our sympathy. They must suffer bravely and not complain too much. In particular, the man with the broken ankle can’t complain if he’s in the same ward as the man with two broken legs: hence the public sector worker can’t put up any resistance because ‘at least he has a job’.
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Saw this somewhere else, in another context (and from a surprising source, if you click through):
Most often, there’s some good reason for blaming people. After all, mistakes were made. But people aren’t the core reason why strategies fail. They are part of the dynamics, but failures are not simply isolated human missteps that can be avoided in the future by replacing one or two individuals. Instead, the issues are subtle variations of systemic problems. The same few problems crop up, over and over again.
http://www.businessweek.com/innovate/content/mar2010/id20100315_022580.htm
Something that cannot be emphasised enough?
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Cowen all hurt by being called a traitor by Gilmore….
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Will somebody pinch me, I think I’m dreaming this. 47%.
Our children will love us for this. Could’ve been worse I suppose, BUT..
Lenihan actually had the nerve to state that the country is “fiscally stable and credible”? . What planet is he living on? We’ll be lucky to get a loan from the mafia our credit rating is so bad.
Write off 47% of our mortgages then, please.
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That’ll never happen. It just won’t. And interest rates going up as well. What a state.
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Has there been any analysis of the comparable cost of the 2 options:
a) NAMA & bank recapilatisation.
vs
b) allowing the banks to fail, with the resulting bad credit rating and therefore higher premium on future borrowing by the state (assuming the Irish banks won’t have any future borrowings as they’ll be gone, and the resulting vacuum will be filled by foreign banks who’ll come into the market as a result, but who will borrow at rates determined by their country of orogin).
Maybe it’s a foregone conclusion even in orthodox terms, but I’d be curious to see even some back-of-an-envelope numbers.
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David McWilliams is the man to watch for this info.
However, obtion b) might not reduce credit ratings, it might actually improve them if DMcW is to be believed; NAMA is far more likely to damage Ireland’s reputation abroad.
I would also been keen to see the numbers.
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I just noticed that Finian McGrath voted with the government for this Nama motion.
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Hmmm…
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Isn’t that part of the price for his local deal?
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What’s happened is this: we’ve replaced a zombie bank – or banks – with a zombie state. And, while the phrase ‘zombie bank’ has entered the language, it has usually been taken to mean a moribund, non-functioning institution. Maybe though, the metaphor ought to be taken more literally – as anyone who knows the Romero films can confirm, a zombie isn’t simply ‘not alive’ but ‘undead’ – a very different thing. It feeds on the living flesh of the healthy and zombifies them in turn. And, as all the movies concur, the only way to deal with a zombie attack is with maximum force and to pulverise them beyond the faintest possibility of survival and reconstitution.
Instead, our government has created a super-zombie and put it in a basement called NAMA – and now the state exists, not to serve us, or represent us, but to feed on us: until…..what?
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….Until it’s someone else’s problem!
great analogy 🙂
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“we’ve replaced a zombie bank – or banks – with a zombie state”
Quote of the day. Heck, the week, even.
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‘The metaphor ought to be taken more literally.’
Brian Lucey does in today’s IT: ‘Anglo- the bank that ate Ireland’ .
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Todays Times has a piece by investment adviser Rory Gillen in which he states ” the main risk this country faces is not the valuation of NAMA assets but union intransigence to the necessary public sector contraction”. Its amazing where they’ll place the blame for the crash.
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You’re absolutely right. That’s a ludicrous analysis by Gillen but it’s of a piece with all the diversionary tactics we’ve seen over the last while.
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That’s not analysis – it’s just telling lies for political ends: propaganda, in a word….
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Yep. That’s the long and the short of it. I’ve a few thoughts on this, but it’ll keep til next week.
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