Anglo Billions

[OneRedArmy]

Wasn't Lehman allowed to die? I'm pretty sure there's as much precedent for allowing backs to collapse as there is for propping them up.There really isn't. Willing to be proved wrong (bear in mind I said developed countries and internationally active banks).

[OneRedArmy]

Even if the course taken was the best optionSorry Macy, just to be clear, that's not what I said.

I said it didn't matter what option was taken at that stage, the ultimate cost to the country as a whole was pretty much fixed whatever option we chose.

I realise that isn't a particularly popular point of view, but we set our stall out as a small open economy decades ago and it's the reality IMO.

Don't get me wrong, FF and their cronies should be vilified, but I'd place more blame on how we got here rather than how they reacted. It's a shame that the international media (Newsweek etc.) as well as the domestic press seem focused on the latter.

[Billsthoughts]

Because in developed countries that participate in international debt markets Governments are generally expected to stand behind their internationally active banks. This is backed up by decades, nay centuries of history.

Not to say I necessarily agree with this expectation, but as someone with over a decade's experience in international banking markets, it is undeniable that its an expectation.


This is a major assumption. Especially given the type of bank Anglo was. It would have pushed up the cost of borrowing but hello arent we in that position now and also wasting billions into the bargain. Investment carries risk. The Irish tax payer shouldnt be shouldering the burden of risk for instituitions investments when they have shared in none of the reward. Its farcical.

[OneRedArmy]

This is a major assumption. Especially given the type of bank Anglo was. It would have pushed up the cost of borrowing but hello arent we in that position now and also wasting billions into the bargain. Investment carries risk. The Irish tax payer shouldnt be shouldering the burden of risk for instituitions investments when they have shared in none of the reward. Its farcical.I agree it's farcical in the extreme.

But with interest rates over the last 15 years significantly lower than history, the average taxpayer has benfited whether they acknowledge it or not.

Time will tell the price that has to be paid for the low interest rate & home ownership religion that was allowed to build up.

[bennocelt]

I agree it's farcical in the extreme.

But with interest rates over the last 15 years significantly lower than history, the average taxpayer has benfited whether they acknowledge it or not.

Time will tell the price that has to be paid for the low interest rate & home ownership religion that was allowed to build up.

How? Crippled with debt, living in a sh it hole town in the midlands with no jobs and new amenities, two hospitals closing in the town, inflation, etc etc?
I suppose us minions should be happy with what we got.............

[OneRedArmy]

How? Crippled with debt, living in a sh it hole town in the midlands with no jobs and new amenities, two hospitals closing in the town, inflation, etc etc?
I suppose us minions should be happy with what we got.............Joe Duffy is on at lunchtime, if you can't be bothered having a rational discussion give him shout.

[bennocelt]

Joe Duffy is on at lunchtime, if you can't be bothered having a rational discussion give him shout.

Rational? Please, you are like a FF head saying how wonderful and great things are/were, even if we didnt know it!!!
Please tell me how the average tax payers has benefited from a FF led government through the last few years - Im all ears!!!

[pineapple stu]

His point was perfectly valid in fairness. My mortgage repayments have dropped from E1,400 a month interest only to about E1k a month with E300 capital being paid off. Over the life of the mortgage, I'm clearly going to pay less as a result.

[Fr Damo]

Rational? Please, you are like a FF head saying how wonderful and great things are/were, even if we didnt know it!!!
Please tell me how the average tax payers has benefited from a FF led government through the last few years - Im all ears!!!

I think we all know ORA knows more about financial matters than the whole of FF and therefore nothing like a FF head but he's well able to defend himself so i'll stop now.

How we "benfited" is debatable but try SSIA, low earners out of the tax net, highest dole payments in Europe, college fees abolished etc etc. The thing is who ever got in after the 1997 election would probably done all of these things to a greater or lesser extent, in turn crippling the school leavers of the noughties anyway.

We all had choices during the late ninties, early noughties - go to college/get a trade or go laboring, rent or get on the property ladder, buy the newest reg car or get great value in the older stock no one wanted, spend your wages or save for the bust when it came. It comes down to good or bad decisions taken at that time (now with the benifit of 20/20 hinsight.)
Twenty year olds in the mid 90s had lots of opportunity to do well and and take opportunities to secure themselves in the knowledge that when the bang came they'd be ok. Or they bought that 4 x 4 and speedboat.

However on stu's point, it could be argued that the low interest rates on your mortgage mean you end up paying what you should have paid on the property if the bubble wasn't created and the morgage rates were closer to the norm. (i.e higher than they are now.)

[dahamsta]

There really isn't. Willing to be proved wrong (bear in mind I said developed countries and internationally active banks).

I'm pretty sure there is but like yourself I couldn't be arsed going looking. I'll stop throwing out unsupported speculation if you will.

[OneRedArmy]

His point was perfectly valid in fairness. My mortgage repayments have dropped from E1,400 a month interest only to about E1k a month with E300 capital being paid off. Over the life of the mortgage, I'm clearly going to pay less as a result.


Rational? Please, you are like a FF head saying how wonderful and great things are/were, even if we didnt know it!!!
Please tell me how the average tax payers has benefited from a FF led government through the last few years - Im all ears!!!


I think we all know ORA knows more about financial matters than the whole of FF and therefore nothing like a FF head but he's well able to defend himself so i'll stop now.

How we "benfited" is debatable but try SSIA, low earners out of the tax net, highest dole payments in Europe, college fees abolished etc etc. The thing is who ever got in after the 1997 election would probably done all of these things to a greater or lesser extent, in turn crippling the school leavers of the noughties anyway.

We all had choices during the late ninties, early noughties - go to college/get a trade or go laboring, rent or get on the property ladder, buy the newest reg car or get great value in the older stock no one wanted, spend your wages or save for the bust when it came. It comes down to good or bad decisions taken at that time (now with the benifit of 20/20 hinsight.)
Twenty year olds in the mid 90s had lots of opportunity to do well and and take opportunities to secure themselves in the knowledge that when the bang came they'd be ok. Or they bought that 4 x 4 and speedboat.

However on stu's point, it could be argued that the low interest rates on your mortgage mean you end up paying what you should have paid on the property if the bubble wasn't created and the morgage rates were closer to the norm. (i.e higher than they are now.)

I think that captures my point. I deliberately went out of my way to say that we wouldn't benefit in the long-run, but for a country that worships at the altar of home ownership, you can't ignore the low interest rates.

What's unsaid in the papers and media is that whilst a significant percentage of the country are struggling to make ends meet, saddled with debt and loss of employment, a larger tranche of the population (those in employment who haven't taken paycuts) are essentially unaffected. I say that not to take away from the suffering of those living with the results of misGovernment, but to flag the fallacy that the whole country is suffering. Far from it in fact.

In many ways it's a generational thing, with the younger generational shouldering a disproportionate amount of the burden.
As for the comments re FF, I'm not even going to respond. I've never given them a vote and don't see that changing.

[Billsthoughts]

There is higher taxes and levies now for people who are working so its wrong to say they are unaffected.
Given most pensions schemes were heavily invested in the banks its wrong to say its the younger generation who are shouldering all the burden. I dont have a mortgage so didnt benefit from low interest rates in that regard and even if I did given the size of the mortgages people took out the term "benefit" would be relative. I dont buy the "Joe Duffy brigade commenting on things they dont know anything about" line either. They know its their money. Surely thats enough to warrant comment informed or uninformed. Also given the fact that very senior people in all the global financial institutions got it wrong we can dismiss anyone claiming to be an expert one way or the other.

[pineapple stu]

I dont buy the "Joe Duffy brigade commenting on things they dont know anything about" line either. They know its their money. Surely thats enough to warrant comment informed or uninformed.
I'm not sure if anything really warrants uninformed comment to be honest.

[Billsthoughts]

I'm not sure if anything really warrants uninformed comment to be honest.

pointless

[bennocelt]

Jeez it seems like Ireland is a great place!!!! I thought we were in a recession, silly me!

[OneRedArmy]

Jeez it seems like Ireland is a great place!!!! I thought we were in a recession, silly me!In your post above you generalised the whole country into people living in the midlands. Less than 15% of the population live in the midlands.

I'm not sure what your point is tbh? Do you not agree a large percentage of the country haven't really been impacted (if you don't, you're wrong)? Do you accept it's true but thinks it's irrelevant (fine, but don't deny that it isn't true).

I don't see a problem in taking the view that successive Governments have made a bags of running the country, yet at the same time noting large swathes of the population have been pretty much unaffected.

And Billsthoughts, time will tell, but I completely disagree the impact isn't generational. The younger generations will pay an undue share. Some retirees or near retirees will see pension cuts, whilst the generations below won't have a pension to draw from as the well will be dry.

[bennocelt]

Well nearly half a million unemployed, god knows how many emigrated (myself and wife included), thousands burdened with mortgages in rubbish homes. Maybe I am generalising but that's where I'm coming from, Im sorry i dont know what its like to live in D4 or where ever. Also find it funny that you are from Northern Ireland (Britain) and seem to have this great grasp about what's happening down south!!! LOL

[pineapple stu]

See, that's why I reckon uninformed comment is never worth it. Given I've met ORA a couple of times and he coming home from his job in Dublin, I think he's perfectly qualified to talk about things here from that perspective anyway.

[bennocelt]

See, that's why I reckon uninformed comment is never worth it. Given I've met ORA a couple of times and he coming home from his job in Dublin, I think he's perfectly qualified to talk about things here from that perspective anyway.

That's fair enuff, good that he got a job as well, plenty havent.
Anyway I was only taking the p

[culloty82]

So Anglo is now going to cost €29.3 billion at best, €34 billion in a "worst-case scenario". The last estimate on pulling the plug immediately was €70 billion, so it appears there's little alternative to the current plan, but the new structure does seem unnnecessarily complicated. Meanwhile, any of you with AIB shares will have diluted assets, with the State owning 85-90%.

[OneRedArmy]

I admire AIB's optimism in their plan to raise equity from the open market at 50c a share....

[dahamsta]

The last estimate on pulling the plug immediately was €70 billion, so it appears there's little alternative to the current plan, but the new structure does seem unnnecessarily complicated. Meanwhile, any of you with AIB shares will have diluted assets, with the State owning 85-90%.

Yeah, but whose estimate was it. Because Gov.ie's claims about allowing it to die have been wishy-washy at best. There's zero doubt in my mind that there will be a catastrophe if Anglo goes to the wall, they just haven't told us why yet.

I have a few shares in AIB, BOI too. I'm in no rush. They'll be back where they were by the time I retire, at worst.

[Macy]

There's zero doubt in my mind that there will be a catastrophe if Anglo goes to the wall, they just haven't told us why yet.
For whom is probably more what they won't tell us. I'm not convinced it's the state.

[dahamsta]

It'd be both, imho.

[total hoofball]

So Anglo is now going to cost €29.3 billion at best, €34 billion in a "worst-case scenario".

The €29bn~ is a warped figure based on existing property values not shrinking drastically further. The "worst case scenario" is a given. S&P's have been bang on the money.

[Spudulika]

http://www.themoscowtimes.com/news/article/ufa-construction-crane-seized-4th-this-year/416465.html

I'd been looking for this link for a while and a colleague sent it on today (well, given the day that's in it why not!). Ufa was one of the "destinations" for Irish investment and was largely guided by an Irish individual working for a Russian bank who was double-jobbing and remains in situ, mainly because he earned his bank, boss and the region in which the bank originates/is based a fortune! To date c. 250million euros was openly "invested" in Bashkortistan by Irish property speculators and lost, the same was also spent in the region and resulted in what this article describes - sites that have ceased working, are in financial dire straits, or are on land that could not have been sold in the first place.

Now given that a number of sites in the Moscow region have disappeared in similiar schemes (involving Quinn), as well as at least 3 large projects that had large amounts spent on them but subsequently folded for gigantic losses, all of this is floating back towards Anglo and AIB. However I'm confused on this, with at least a billion spent on Russian projects that have gone bust alone, what will happen to these?

[OneRedArmy]

http://www.themoscowtimes.com/news/article/ufa-construction-crane-seized-4th-this-year/416465.html

I'd been looking for this link for a while and a colleague sent it on today (well, given the day that's in it why not!). Ufa was one of the "destinations" for Irish investment and was largely guided by an Irish individual working for a Russian bank who was double-jobbing and remains in situ, mainly because he earned his bank, boss and the region in which the bank originates/is based a fortune! To date c. 250million euros was openly "invested" in Bashkortistan by Irish property speculators and lost, the same was also spent in the region and resulted in what this article describes - sites that have ceased working, are in financial dire straits, or are on land that could not have been sold in the first place.

Now given that a number of sites in the Moscow region have disappeared in similiar schemes (involving Quinn), as well as at least 3 large projects that had large amounts spent on them but subsequently folded for gigantic losses, all of this is floating back towards Anglo and AIB. However I'm confused on this, with at least a billion spent on Russian projects that have gone bust alone, what will happen to these?As I said the last time you raised this, the same thing that happens to unsecured loans that default in Ireland or elsewhere. If they are NAMA-eligible, NAMA pay nothing for them as security isn't perfected and Anglo write off the full amount. If they aren't NAMA eligible (and if the are development rather than investment loans, they should be), then they will end up being fully written off at some stage.

I don't see the difference in these loans and Irish loans, the bottom line is the same, just a different type of fraud!

[Spudulika]

You know, it's something that just makes you wonder (as you called it fraud) just where the money has gone. I just heard on drivetime that AIB have 7-8billion in losses that will have to be disclosed - supposedly we have zombie banks! The Russian land deals, as far as I know, were set against Irish holdings, the land bought was worthless for the most part (one a swamp where metres of pylons just kept sinking). One thing that I find most disgusting is that it was a supposed Irish expert who drew large amounts of money, has kept his bank position (obviously) but not a single word in Ireland has been written about going after him, and I wonder if it shame or pride that prevents the Quinns etc from opening the barrels!

[bennocelt]

I agree it's farcical in the extreme.

But with interest rates over the last 15 years significantly lower than history, the average taxpayer has benfited whether they acknowledge it or not.

Time will tell the price that has to be paid for the low interest rate & home ownership religion that was allowed to build up.

Is that time soon? do you reckon!!!!

[OneRedArmy]

Is that time soon? do you reckon!!!!We'll be paying for it for the next 30-50 years unless we get some element of debt forgiveness. As to the final cost, we still have no idea.

[Noelys Guitar]

Elderfield just said he does not know the final figure so the 34billion is a figure out of the air.

[Macy]

Elderfield just said he does not know the final figure so the 34billion is a figure out of the air.
So much for Lenihan's line under the banks. If it's already discreditted, he has to resign after his indignation last week at accusations of getting the figures wrong many times before*.

*maybe he added a sneaky "so far" under his breath?

[Noelys Guitar]

Next up is the credit unions

The financial regulator also warned the State's credit unions are systemically underprovisioning against loan losses.

"We are finding systemically . . . underprovisioning in the credit union sector," Matthew Elderfield told the committee. "That's a worry to me."

Mr Elderfield said the regulator had discovered credit unions were underprovisioning by 40 per cent and that he intended on dealing with this problem.

[Noelys Guitar]

Elderfield on whether the 34/35 Billion would be enough
http://www.newstalk.ie/news/9regulator-not-certain-of-final-anglo-costs56/

[OneRedArmy]

Why on earth is this news?!?

In other news, the future might be different to the present........

In order to know the full cost of Anglo, you need to know exactly how much every borrower will pay back until the whole loan book has run off (probably a couple of decades into the future).

Whilst this doesn't excuse how wrong the Governments estimates were, anyone looking for a fixed cost is a bone headed moron.

[Macy]

Whilst this doesn't excuse how wrong the Governments estimates were, anyone looking for a fixed cost is a bone headed moron.
And what kind of bonehead goes around claiming the figures are final and shouting down anyone even using his own worst case scenario figures?

[OneRedArmy]

And what kind of bonehead goes around claiming the figures are final and shouting down anyone even using his own worst case scenario figures?A FF one.

But then you knew that...!