Economy NAMA

Making NAMA Work – Complete the Money Circle

An article by Fintan O’Toole in today’s Irish Times got me thinking about how we might solve the NAMA conundrum.

Fintan pointed out  what might seem obvious, but which nobody mentions.  The developers who overpaid for all this land and property gave the money to somebody. It didn’t just evaporate into thin air.

Somebody got too much for their land or their buildings, they have it in a bank somewhere, and now the Irish taxpayer is picking up the tab.

Well, look.  How about this for an idea?

Under the government’s current plan, NAMA will have the authority to tell the banks how much it’s going to pay them for their distressed assets.  It will be able to say, No, we won’t give you the €77 billion you lent.  We’ll give you €54 billion instead.  NAMA will be given the power of valuation.

Leave aside for a moment the fact that NAMA is still paying the banks too much.  Look instead at its powers to determine the discount.  Look also at the government’s powers to take money from you and me by way of taxation and levies.

Here’s my suggestion.

Since NAMA is going to value and take over all these bad assets, why not go one step further?

Why not give NAMA the power to look into the transaction when the land or buildings were bought, and see if the person who sold them was paid too much?

And if NAMA decides the vendor was paid too much, why not take the excessive  profits back from them and put it into the fund that buys the assets from the bank?

This would mean that the people whose greed caused the whole mess would end up paying for it, instead of the little people like you and me.  After all, these people’s unreasonable profits are why the loans were overvalued in the first place.

Yes, it’s true that a lot of the money went this way and that: to the percentage merchants like estate agents who grew fat on their inflated fees, and the design teams who were paid on the gross price of the developments, right down to the greedy blocklayers who charged €2 per block to build the goddamn things.  But if our system is capable of tracking down a poor man on the dole for accepting a day’s work, it should surely be capable of unravelling who got what out of all the billions.


Tell me.  What would be wrong with doing this?


Meanwhile, on more NAMA-related matters, here’s something from one of those very clever fellows who know how to do hard sums.

And here’s McWilliams on protecting the rich.

Favourites Politics

Green Lite

Our badgers, mink and stags are safe.

Thank God.

The Greens are staying in government, having hammered out a series of concessions on things that were going to happen anyway, things that might happen if there was any money, things that are completely irrelevant and things that can’t happen.

The feared super-tax on kaftan-weaving won’t now happen and the yoga levy is to be scrapped.

All around our coasts, the Ego Worriers are going to build a vast array of wave-powered dreamcatchers to harvest our most valuable natural resource: self-delusion. To operate this mighty complex of machinery, workers who lost their jobs in the downturn will be intensively reskilled in Transcendental Meditation.

Once this vital infrastructure is in place, Ireland will be in a position to deliver on the key Green commitment: to make everything a lot better very quickly.

This will be achieved by magic thinking and circular breathing.

The Greens have promised to provide 100% broadband by 2012,  starting from today when we only have fraudband.

There’s a firm commitment that someone from IT will take our Minister for Communications aside and explain to him the difference between real broadband and mobile broadband, and also if there’s time, to explain to him what the internet is.

Third level fees won’t be reintroduced, which is possibly the one thing that was most feared by pensioners and poor people, but registration fees will quietly double instead.

The Greens also promise that there will be 6,000 more electric vehicles on the streets over the next three years, thus ensuring that exhaust fumes are removed from Dublin and shifted down the country where the power stations are located  and where there are no real people —  just actors to make the place look authentic when the Green party visit their sustainable holiday homes.

Almost everything will be Smart in the new Green Ireland.  We’ll have a Smart Economy, Smart Food, Smart Forestry, Smart Fish, Smart Tourism and Smart Money.  There will be Smart Dogs and Smart Cats.

Smart Mountains, Smart Rivers.  Smart Scenery.

This will be an extraordinary transformation from the current stupidity, and all achieved by unleashing the limitless powers of magic thinking.

Smarties will be the new unit of currency.

We won’t have Smart Clothes though, because they’re made by child slave labour in Burma.

Public transport, which is mainly for people in Dublin, will be revolutionised.  There will be fewer trains and buses but you’ll have a better idea of how badly the system is working.  By 2011, all towns and cities will have RTPI systems in place.  This stands for Real-time Passenger Information, which is a way of letting you know that your bus is late, cancelled or gone too early.  The RTPI will be beamed directly to your brain by a dedicated team of reskilled psychics.

A new nuclear energy detector will be installed at the interconnector with Britain to make sure they don’t send us any of that filthy atomic electricity because we’re Irish, and our Greens are even greener than the German Greens, who think nuclear power is good.

Tarot-card printing and hair-braiding have been identified as core industries to be promoted, but most vitally for the nation’s survival, the Greens have negotiated a cast-iron commitment from Fianna Fáil to perhaps at least consider looking at the possibility of maybe turning Dublin’s GPO into a theatre at some stage if it wouldn’t be too much trouble.

And of course, there’s NAMA, but that’s a small price to pay now that the badgers are safe.


Programme for Government


NAMA Is Criminal, Says Joseph Stiglitz, Nobel-Winning Economist

Brian Cowen is a solicitor.  He has no training or qualifications in economics, yet Brian Cowen says NAMA is the only option available.

Brian Lenihan is a barrister. He also has no training or qualifications in economics, yet Brian Lenihan says NAMA is the only option available.

Neither of these men would get on the short list to run a mid-sized European city.

Joseph Stiglitz is a professor of economics at Columbia University.  He was awarded the Nobel Prize in 2001 and is a former Senior Vice President and Chief Economist of the World Bank.

Joseph Stiglitz thinks NAMA is a crime.

Now let me ask you something — who do you believe?

Watch Stiglitz’s interview on RTÉ and decide for yourself.  It’s HERE


David McWilliams talks to Stiglitz


Nama – When Is A Haircut Not a Haircut?

Well? When is a haircut not a haircut?

Answer: when it’s not even a light trim.

Now, I’ve been doing a little calculating, but of course I’m not an accountant or an economist, so this is probably all wrong, but anyway, here goes nothing.

Pic courtesy of C'est la Craic

Yehudi Lenihan announced that Nama would pay €54 billion for the banks’ bad loans, which have a face value of €77 billion: in other words, he says he’s paying 70% of the original value they had when the loans were issued at the height of the boom. These are the values that were assigned when everyone was coked out of their heads and drunk on power and helicopters. Let’s call this the loans’ lunacy value.

Because he’s only paying €54 billion and not €77 billion, this is called a discount.

But wait. That lunacy value of €77 billion includes €9 billion in rolled-up interest, so the loans were actually worth €68 billion at the top of their value. Their lunacy value.

So not only do the taxpayers make sure that the banks get most of their money back after their disastrous lending spree, driven by greed and stupidity. We also make sure that they get the interest they feel entitled to earn on these criminal loans.

But it doesn’t end there.

Because the government nationalised Anglo-Irish instead of letting it collapse like the zombie it is, we’re liable for the entirety of its bad loans, which amount to €28 billion, out of which you have to strip about €3 billion in phony rolled-up interest. We’ll say Anglo’s total bad assets are worth about €25 billion.

I might just add in passing that Anglo-Irish Bank was not a bank in the sense any of us understand, but simply a conduit for passing credit to builders. It had no importance to the wider Irish banking system and could have been allowed to collapse without the slightest impact on our economy. Yet, despite this, our government chose to nationalise it and make its problems our own.


Well, that’s one of the biggest questions that will have to be answered. Why did Fianna Fáil rescue the developers’ bank when they didn’t have to?

Time will tell.

Let’s see now. Time to recap.

  • Nama gives €19 billion to Anglo.
  • The government tops that up with another €6 billion.
  • Nama gives €35 billion to the rest of the banks.

That makes €60 billion in total, against a maximum loan value of €68 billion, which was their supposed worth at the most insane level of valuation.

That’s 88% of the total inflated value of the loans, when measured at the absolute height of the property bubble.

Isn’t that great? I hope you feel a lot better now, knowing how much you’ve contributed to guarantee the top bankers a sound night’s sleep.

Leaving Anglo out of it, the total face value of bad debt is €49 billion, but you have to take out the proportionate amount of rolled-up interest of about €5.7 billion. (In other words, the interest the banks would like to earn for making insane loans to people who couldn’t possibly pay the money back). We’ll call it €6 billion for round figures. That leaves the face value of the un-nationalised banks’ bad debt at €43 billion.

€35 billion of Nama money goes against this bad debt, so Yehudi Lenihan is actually paying the independent banks about 81% of their lunacy value while their real value might be in the order of €20 billion. Might be. Nobody knows.

So, by my reckoning, Yehudi Lenihan has just suggested that we give the banks’ big institutional investors a free gift of €15 billion.

Now. Have a look at those rough figures and correct me wherever I made a mistake. After all, I’m neither an accountant nor an economist, and I don’t really understand the subtle details of these things.

Now that I think of it, I’m just like our Minister for Finance and our Prime Minister. The only difference is, I don’t have the power to give your money to the billionaires who want it.

Here’s an interesting question in today’s Irish Times.

If the bank loans for Nama are only worth €47 billion, why is the Government going to pay €54 billion?

Do you have the answer?

If so, please let us have it as soon as possible.  Thanks.


Meanwhile, Fingers Fingleton enjoys his retirement.


Also on Bock

Nama for Mister Men

Paying For The Celtic Tiger

Why Are Irish Banks Backing Liam Carroll’s Zoe Group?

IMF report on Irish economy

NAMA Millstone Will Sink Ireland

NAMA Long-Term Economic Value Explained

Economic Treason – Simple Recipe

Asset Management Agency – Ireland’s Bad Bank

Bludget 2009

Budget 2009 – My suggestions

Fingers Fingleton Sole Beneficiary of €27 Million Irish Nationwide Pension Fund

Bailing Out The Property Developers

Business Ideas for the New Great Depression

Sorry? What?

Irish Government Ministers

Denying the Economic Crisis

Anglo-Irish Bank’s Croke Park Corporate Box

The Anglo-Irish Ten, Hiding Behind Client Confidentiality

Irish Bank Guarantees

Sean Fitzpatrick Tells Parliamentary Committee To Fuck Off

Letter To Brian Goggin, Bank of Ireland CEO

Anglo-Irish Bank, Brian Lenihan and the 7-Billion-Euro Fraud

Irish Government Nationalises Anglo-Irish Bank


Would you not think of apologising?

Would you not think of apologising at all? Would it not strike you or cross your mind that you might apologise?

This is what Mr Justice Peter Kelly said in 1997 to Liam Carroll , owner of Zoe Developments Ltd after a young man had died on his construction site and his company had been convicted of 13 breaches of health and safety regulations.

It reminds me of the final, humiliating demolition of  Senator Joe McCarthy by JN Welch: Have you no sense of decency, sir, at long last? Have you left no sense of decency?

The difference of course is that those outraged, honest words finished McCarthy whereas Carroll went on for another eleven years, contributing in a huge way to the destruction of the Irish economy.

Carroll had maintained a contemptuous distance from the trial, resulting in his summons before the court to explain himself, but even this was a charade.  Carroll, and his fellow directors cared nothing for the little people, and he treated the court with disdain.

In the course of his address, Mr Justice Kelly, plainly outraged by Carroll’s attitude, made the following points :

[Your company] is not entitled to make profits on the blood and lives of its workers

The workers on whose sweat you make your money are treated with contempt and so are the laws.

This defendant [ Zoe Developments] that you are responsible for is a criminal and a recidivist criminal at that and is so thanks to you.

Listen to what he said.  The company, whose directors were Liam Carroll, his wife Róisín Carroll and David Torpey, was a criminal, and not only that but a recidivist criminal.  And that fact was thanks to Liam Carrroll.  He was responsible for his company being a criminal.

Since a company is just a legal entity, incapable of thinking independently of its directors, somebody else’s decisions must have made it a criminal.  So what did that make the Carrolls,  Mr and Mrs?  And what did that make David Torpey?

After all, according to the court, these three people were directors of a criminal entity.

This is the company that was allowed to go on and run up a gigantic debt, which now threatens to destabilise the Irish state.  Three greedy, unscrupulous, ruthless people in Dublin – Liam Carroll, his wife Róisín and David Torpey – have, by their avarice and lack of civic responsibility, threatened our very survival and the futures of our children.

I hear Liam Carroll isn’t well at the moment, but at least he’s doing better than the people who died on his construction sites, people whose blood and lives he profited from.  And he’s probably doing better than the people who bought his horrible shoe-box slums.

[Your company] is not entitled to make profits on the blood and lives of its workers

The workers on whose sweat you make your money are treated with contempt and so are the laws.

Replace the word workers with taxpayers and see how you feel now about these property developers.

It’s worth repeating Joseph Welch’s words as Carroll’s lawyer tells the court that his client’s action is in the public interest:

Have you no sense of decency, sir, at long last? Have you left no sense of decency?

Politics Society

The Mendicant Classes

There was a time in Ireland when it was normal to be excluded. It was usual, if you weren’t among the privileged, to be outside the loop if your circumstances were wrong and you were trapped in the middle.  Neither rich nor poor.

You might be an honest, hard-working Joe, well able to feed your family, whose children never wanted for clothes or Christmas presents or a week at the seaside, but you didn’t know the bank manager on first-name terms, or the doctor. You were afraid of your own lawyer, who instructed you what to do. You didn’t play golf with the local auctioneer. If you went to hospital, you weren’t looked after by the consultant — you were “under” him.

There was another class of people too. People who expected and got everything they demanded, from healthcare to housing, because they were perceived to belong to the mendicant classes, who for generations had thrown themselves on the State to support them in all their needs.

You didn’t expect to receive anything, even when you were entitled to it, and most of the time you didn’t ask, because you were brought up to pay your way. When times got hard, you didn’t understand the system. You thought the Services would step in and rescue you, but you found out the hard way that there were no Services for people of your sort. You learned to stand in line and wait, to hand in your form and sit down until you were summoned. To call to some politician’s house after work and tell him your story of desperation in the hope he’d fix it for you. The house you needed from the council. The operation you couldn’t afford. The academically-gifted daughter you couldn’t educate because your factory-worker’s wages placed you above the earnings threshold for a university grant.

You knew nothing of investments or shares. Stock-market reports on the radio had as much meaning for you as the shipping forecast. You didn’t put money into anything in the hope of a high return because you didn’t have any money, but your children were warm, and well-fed, and you worked yourself to the bone so that your daughter or son could get the education you didn’t have.  They’d do better than you, if you had anything to do with it.

You despised the mendicant classes with their swagger and their sense of entitlement, their feckless, irresponsible waste of money, their gambling, their drinking and their sheer vulgarity, but you worked hard and you got on all right in the end. Your children made it through university, alongside the children of rich farmers and businessmen who were able to reduce their paper earnings so that their kids got the grant.  Kids with cars.

In the end, you got on ok, and now you have a nice home, grown-up kids and a good life. You’re retired and you have grandchildren. Maybe a great grandchild on the way.

And suddenly, they’re back, the mendicant classes. They still have that sense of entitlement, the belief that the government should pick up the tab for their gambling, and their overspending, their vulgarity, their drinking, their partying and their drug-taking.

You despise them. Why? you want to know. Why after all these years of hard work, should my money support these gambling wasters?  I didn’t buy shares in banks and I didn’t buy bonds, because they were too risky.  So why the hell should I have to pay for the gambling debts of the bank manager and the auctioneer and the consultant surgeon?

You don’t care about the poor any more.  These days you have eyes only for the insider classes.  The new beggars.  The people who expect the government to step in and rescue them from their ill-judged gambles, using your money. The people who can’t believe anyone would question their right to suck your country dry.

You remember how they made you stand in line all those years ago but not this time.

Not this time.


Viet Nama

Every country has a catastrophic war now and again.  The French, Americans, British and just about everyone else fought a series of disastrous conflicts in South-East Asia that entered into the common speech of people as a metaphor.  An unwinnable war against a determined local population.

Thus, Iraq became George Bush’s Viet Nam.

Afghanistan is Tony Blair’s Viet Nam.

So what kind of a disastrous war could a piddling little country like Ireland have?  Well, what about a second Civil War like the one looming now as Cowen and his cronies finalise the details of the great robbery in which they reach deep into your pockets and give all your money to the bondholders and shareholders of the banks?

It’s a disaster.  It’s cataclysmic.

Friends, I give you Viet Nama.



Click on pic for full-size image.  Feel free to put it on a T-shirt.


The Zoe Group Sings Praise to the Shoebox King

It’s amazing how many different things Liam Carroll’s Zoe Group were into.

Not only did they build thousands of shit apartments in Dublin, earning Carroll the title “Shoebox King”, but they also found the time to carve out a career as a Christian band.

Here. Let’s have a song from them. Praise to the Shoebox King.


Zoe Group Collapse — Down With That Sort of Thing, Says Supreme Court

So the Mrs Doyle defence didn’t work, then.

Ah go on, go on, go on, go, GO ON!!!

The Supreme Court wasn’t impressed.

It must have come as a terrible shock for Father Liam Carroll to realise that Bishop Brennan was on the bench.

Carroll, you little bollix, where’s that loan money you had resting in your account?

It probably dawned on Fr Liam halfway through the defence presentation that he shouldn’t have hired his housekeeper to represent him.

Property prices will jump back in three years, said Mrs Doyle. It’ll all be grand.  It will it will it will it will it will IT WILL!!!

Where’s the evidence?

It’s all here, Your Grace.  On this opened-out cigarette packet covered in  hand-scribbled notes.  It says here everything will be fine.  Here.  Have a nice cup of tea.

I don’t believe you.  Do you hear me?  And you, Carroll!  Stop snivelling, you little bollix.

Ah go on go on go on go on go on


Meanwhile, on Dodgy Island, Father Nama anxiously awaited the verdict …


Also on Bock: Why are irish banks backing Zoe?


Selling Toxic Assets

It’s amazing what you  learn while idly standing around outside a pub.

Do you know what? says Captain Bottleneck, somewhat incompletely.

What? I reply, in the oblique manner his question subtly demands.  This is a great Irish tradition, a little social interplay that is not to be disrespected.

Well, he says, they have this amazing set-up in Chicago, since the fire back in 1871.

That would be the Great Fire of Chicago, I interject helpfully.

The very one, he confirms.

Started, I go on, by a cow, if memory serves.

Indeed, he nods.  An incendiary, pyromaniac bovine.

And your point is? I make a come-on-come-on gesture.

Well, he says, when they rebuilt the city, they put in two roads.  One high up and the other one down below.

Yeah? I say.  And where exactly did you happen upon this information?

Here, he replied.   All the buses and the refuse trucks, fire engines, the whole lot, they all go around in the underground road.

Great, I say.

We pause as we contemplate what all this means.  Bottleneck sucks on his cigarette and stares out over the mighty River Shannon.

You know, I go on.  In a post-apocalyptic situation, that would be a very desirable neighbourhood for mutants.

It would, now that you mention it, he agrees.  It certainly would.  After all, who wants to live in a sewer, even if you’re a mutant?

No-one, I tell him.

So, he says, are you thinking what I’m thinking?

Well the world is fucked, I say.

It certainly is, he agrees.

Right, we nod.

Bottleneck drags me to one side.  Not  one word of this to NAMA.

Oh Jesus no, I assure him.

Or Liam Carroll.

Certainly not, I say.

Tomorrow, we’ll begin setting up our property empire.  Tomorrow we begin  dealing in toxic assets to the very people who’ll buy them.

Rich mutants.

Better than living in a sewer.


Utterly irrelevant musical interlude:

Ah fuck it, we’ll have another one, why don’t we?