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Nama - My Downfall

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Nama smoke & mirrors or just pure fraud ? you decide

http://www.irishtimes.com/newspaper/breaking/2009/1015/breaking24.htm

The Opposition has today attacked the National Asset Management Agency (Nama) proposals after the Minister for Finance published a draft business plan for the loans agency yesterday.

The Government predicts that Nama will give a return to the taxpayer of €4.8 billion when the “bad bank” is wound up in 2020. The forecast is contained in a draft business plan published by the Department of Finance last night showing the projections on the cost of running the loans agency and how it will be set up and operated.

Nama is expected to make a profit of €5.5 billion by 2020, which amounts to €4.8 billion when inflation is taken into account.

However, speaking today, Fine Gael finance spokesman Richard Bruton said: "I don't think anyone believes 80 per cent of developers will pay up all their debts in full. For example, 36 per cent of these assets are land, and people are telling me that the value of land now has gone down by 75 per cent across the country."

Mr Bruton rejected the estimates of property-values recovery in the business plan and said such projections had already been dismissed as "fairyland" by the courts in the court case involving Liam Carroll Zoe group.

"This sort of projection that we have here has been dismissed by the courts who tried to look at it forensically, we don't have the opportunities, we not seeing anything that underpins this. Indeed, Nama have admitted they haven't seen the loan book," he said, speaking on RTÉ's Morning Ireland.

"In the last 12 months, the banks have made loss provision of €7.3 billion in the last 12 months. Now suddenly, in the hands of Nama, this same portfolio is going to have a loss provision of just €1 billion per year.

"How, in the hands of the Minister for Finance and his various supporters and advisers, is this loan book going to transform from one that the banks had to make this massive loss provision to one that is going to fare very well," Mr Bruton said.

The Government plans to buy loans of €77 billion from five lenders through Nama at a price of €54 billion in a bid to unclog the banks of their most toxic assets and free up the flow of credit into the economy.

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Nama smoke & mirrors or just pure fraud ? you decide

http://www.irishtimes.com/newspaper/breaking/2009/1015/breaking24.htm

it will make a profit

honest

http://news.bbc.co.uk/1/hi/world/europe/8308366.stm

Irish bad bank 'will make profit'

The Irish government has claimed its so-called "bad bank" will ultimately make a 5bn euro profit.

The National Asset Management Agency (Nama) is being set up to buy and manage property loans held by the country's financial institutions.

Finance Minister Brian Lenihan said just 20% of Nama loans would default.

Opposition parties have poured scorn on the suggestion, saying the business plan unveiled by Mr Lenihan provided no evidence for the assertion.

Richard Bruton, finance spokesman for the opposition Fine Gael party said only those who believed in "the tooth fairy, the Loch Ness monster and the Easter Bunny would believe the figures."

The exchanges took place in the Irish parliament on Wednesday night as legislation setting up Nama passed its first hurdle.

Nama will pay 54bn euros - in government bonds that can be cashed with the European Central Bank - for commercial property loans with a notional book value of 77 billion euros.

British

The aim of Nama is to remove bad or impaired assets from the banks' balance sheets, and allow them to start lending again and get credit flowing to businesses and home buyers.

It is also hoped that it will enhance Ireland's international credit rating.

Mr Lenihan's plan assumes Nama's 54bn euro debt will fall by 6.5bn euros per year from 2013 onwards, until Nama's wind-up in 2020.

It was also revealed that Irish officials are in talks with British authorities about the impact of Nama on the Irish units of UK banks and on the UK property market.

Around 22bn euros of the assets being taken over by Nama are in the UK, mainly in London and in Northern Ireland

so from 2013 they will be able to sell off 6.5 billon of property a year?

nae bother!

rock on!

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morgan kelly on NAMA

The proposed National Asset Management Agency (Nama) will fail in its bid to create healthy banks even if it works exactly as the Department of Finance anticipates, UCD economist Morgan Kelly told an economic conference in Kenmare, Co Kerry, today.

Mr Kelly said that even if the default rate on the €77 billion in loans being transferred to the Government's planned "bad bank" was 20 per cent or less and the long-term value of the assets was 70 per cent of the size of the loans, as envisaged by the Department, Nama would not succeed.

"Nama has turned from a recapitalisation into a partial and inadequate liquidity support," he said, speaking at the Dublin Economic Workshop's annual conference.

"Nama was supposed to be revitalising the banking system. We were putting a lot of money in, admittedly, but the banks were supposed to be able to stand on their own after a couple of years. These guys would be fit as fleas, they'd be off the ventilators. But even if Nama goes through perfectly, the banks are going to have huge outstanding borrowings which they really have no chance of repaying on their own."

Mr Kelly the banks would need ongoing state support and "forbearance" from the European Central Bank (ECB).

The economist said the assumptions in the Government's draft business plan for Nama, which was published on Wednesday, were all "at the extreme upper tail of optimism", which posed additional risk. "When you have every assumption like that, you no longer have a forecast, you have a fantasy."

http://www.irishtimes.com/newspaper/breaking/2009/1017/breaking22.html

rock on!

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We are about to see if Tom McClellands RICS concerns about the potential imapct that NAMA might have are justified.

Register of transferred NI loans to Nama 'soon'

A full register of Northern Ireland loans being transferred to Nama will be available shortly, the NI finance minster has said.

Sammy Wilson was speaking after a meeting with his Irish counterpoint, Brian Lenihan.

Nama, the Irish Republic's so-called "bad bank" is being set up to buy and manage bad property loans held by the country's financial institutions.

The meeting focussed on the latest position on the implementation of Nama.

It also looked at related banking sector issues affecting both jurisdictions.

Mr Wilson said: "The banking sectors in both Northern Ireland and the Republic of Ireland remain vitally important and will play a crucial part in economic recovery - businesses and consumers need to have access to finance at reasonable terms to stimulate economic growth.

He said he had a very constructive meeting with Mr Lenihan.

Mr Wilson said: "We discussed the implementation of Nama and I sought clarification on a number of issues relating to the impact on participating banks with a Northern Irish presence as well as local businesses that may be drawn into the process.

"Minister Lenihan assured me that a full register of Northern Irish loans being transferred to Nama will be available shortly and that there will not be a 'firesale' of Northern Ireland based assets," he said.

The aim of Nama is to remove bad or impaired assets from the banks' balance sheets, and allow them to start lending again and get credit flowing to businesses and home buyers.

It is also hoped that it will enhance Ireland's international credit rating.

The plan assumes Nama's 54bn euro debt will fall by 6.5bn euros per year from 2013 onwards, until Nama's wind-up in 2020.

Around 22bn euros of the assets being taken over by Nama are in the UK, mainly in London and in Northern Ireland.

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