Monday, Mar 22, 2010
How many more bailouts?
Yahoo: Irish bank fresh bailout approaching
not looking good...
Posted by mark @ 04:30 PM (771 views) Add Comment
4 Comments
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1. tenant super said...
"A report in another paper, the Sunday Business Post, said the valuation of the first tranche of loans to be transferred by next week would cause a negative surprise."
I am sure my surprise will not be 'negative'. Given the slump so far in commercial and residential property, and given that prices are still above average on all measures and given that the crash shows no sign of abating, it is clear that the 50bn valuation on the 80bn loan book was too high. 20-30 bn is realistic though I think the government will still overpay to bail out the developers and bankers.
The government seem to want a 'recovery' in property prices to make NAMA work. But even Joe public realises that if the loan values rise by bubble re-inflation he and his children lose by having to pay more for property. If the loan value does not recover, he pays through taxation. If they overpay for the loanbook it is a lose-lose situation for the taxpayer.
Even a nequity whinger knows this: http://www.independent.ie/opinion/analysis/the-banks-have-nama-but-who-is-there-to-help-homeowners-like-us-2106184.html
I think the government will overpay for the loanbook but only as much as it thinks it can get away with. If it pays 50bn and it transpires to be worth 20 bn then a subsequent inquiry (which Fine Gael could well commission if they win power since they oppose NAMA) could destroy the political prospects of Fina Fail for a generation or more.
2. ant said...
Nothing new. As expected and more to follow.
3. tenant super said...
...all that said, if the government don't use NAMA as the vehicle for bailing out their banker chums, they'll just do it otherways it seems. Even then, I still think Ireland's banking system and economy is at serious risk of systemic collapse a couple of years down the line.
4. Crunchy said...
British Airways for a bailout soon methinks.