The Big Bailout of the Eurozone (Another crisis coming? - Seriously)

[Hound]

Personally I don't think the golden circle did anything wrong. They bought a heap of shares, they thought they'd make a heap of money, and it seems Anglo organised it so it was effectively a free bet. Though I'd love it if they could find that it wasnt a free bet and they could go after their assets.

On the other hand, the guys who organised this and the other dodgy Anglo dealings, Drumm, Fitzpatrick, and maybe Quinn. They should be in jail awaiting trial.

I'm hugely annoyed that the unions seem to have persuaded so many in the public service that they should strike over the levy. By all their comments, actions, and even some of the statisitics they dig up, the unions are clearly intent on fanning the flames of discontent.  

[Hardy]

Again sorry for being ignorant but can someone explain what exactly the 'golden circle' have done wrong?

My take is this:

Quinn had to change his CFD's into shares.  He held 25% via CFD's, he could only afford 15% (see his having to ahem, borrow, from Quinn Insurance in order to fund this).  The other 10% could not be dumped on the market as it would have seen share prices plummet, Fitzpatrick and the Anglo board were in contact with Quinn and in fact I think helped fund his purchase of the 15% too, they then tried to raise a consortium of investors to buy up the other 10%.  Naturally investors were hard to come by, that's why a special incentive was arranged whereby Anglo agreed to loan these guys the money to buy the shares, with the loans mostly secured on the shares they were to buy and with no recourse to the purchaser should things go belly up. 
For the investors this was an almost risk free bet, shares go up they win, shares go down, they don't lose (bar a few quid - €87M of €451 has been repaid).
For the bank this has the effect of letting the market think that investors have confidence in the company, that they have another 450 in extra loan business and most importantly the shares aren't dumped and therefore this should help the shares retain their value.  Unfortunately there are certain circumstances where companies are allowed to buy their own shares and this isn't one of them, so this appears to have been a situation manufactured by Anglo in order to circumvent the law, it was in effect an illegal share support scheme.
I don't know that the golden circle have done anything wrong, but Anglo have almost certainly transgressed and as they facilitated this, they may have too?

Bogball - the bit I haven't understood about Quinn's purchase is why he had to convert his CFDs to shares and what triggered that.

[Bogball XV]

Bogball - the bit I haven't understood about Quinn's purchase is why he had to convert his CFDs to shares and what triggered that.

Not certain on the workings of CFD's tbh, but I think it was a combination of margin calls and the fact that at least if he had the physical shares as opposed to derivatives of them he would have the possibility of something tangible (were they still talking about paying dividends back then, or was that just AIB) and voting rights etc.  Caide had a reasonable explanation of them on saturday past.

[Hardy]

Thanks Bogball. Yes - I saw Caid's tutorial on CFDs - very interesting. Just thought I was missing something about how Quinn  suddenly needed to come up with dosh for the shares.

[muppet]

Was this article the start of the Anglo €451 Million scandal?

The Times named the following 4 though please note there is no way of knowing at the moment if they are correct or not.

Gerry Gannon, Joe O'Reilly, Seamus Ross and Jerry Conlan

Seamus Ross of Mennolly Homes See blog

Gerry Gannon of Gannon homes

Joe O'Reilly of Adamstown and Dundrum Shopping Centre fame 2005 SBP article


Jerry Conlon set up the Mount Carmel  Medical Group which "has been appointed by the Health Service Executive to build private hospitals on the grounds of public hospitals as part of the co-location strategy. "

The article mentions two others who didn't return calls.

They are:

Partick Kearney of PBN properties from Belfast who is building in Manchester. 

John McCabe of McCabe builders

Funny how the connection with one of the developers to the building of Private Health centres on public land for the HSE has been largely overlooked.

The 10 may have done nothing wrong in the Anglo transaction but the possible links to cabinet decisions needs closer inspection IMHO. Also any relationship whatsoever to cabinet members need to be explored and made public.

[passedit]

Whatever about Ireland its small potatoes compared to what's happening accross the pond.

AIG sees $60 billion loss, no plans for bankruptcy: source
Mon Feb 23, 2009 4:29pm EST



NEW YORK (Reuters) - American International Group Inc expects to report a fourth-quarter loss of about $60 billion, a source familiar with the matter said on Monday.

The troubled insurer has also retained the law firm Weil, Gotshal & Manges, but has no plans to file for bankruptcy, the source said.

(Reporting by Paritosh Bansal; editing by Jeffrey Benkoe)

(For more M&A news and our DealZone blog, go to www.reuters.com/deals)

Thats $60,000,000,000 in three months. Please note my tagline

[passedit]

More good news a little closer to home

Taxpayers to insure £500bn of bank assets

    * Robert Peston
    * 23 Feb 09, 09:45 PM

Taxpayers may become liable for £500bn of poor loans and investments made by Royal Bank of Scotland and Lloyds TSB, the BBC has learned.

Negotiations are at an advanced stage on what the Treasury has called its Asset Protection Scheme, which would involve taxpayers insuring banks against future losses on their less prudent lending and investment.

It is understood that each of Lloyds and Royal Bank hope to insure £250bn of their loans and investments.

They are working towards a deadline of Thursday for Royal Bank and Friday for Lloyds to agree the outline of the deal with the Treasury.

If £500bn of their assets are insured, this would be a bold attempt by the Treasury to achieve two outcomes: first, to strengthen their balance sheets to avoid having to nationalise the banks fully if their losses increase: second, to release resources within the banks to generate perhaps £30bn or £40bn of new lending to companies and homebuyers.

It would also, however, lift the total of British taxpayer support for our banks since the start of the credit crunch - in the form of loans, guarantees, insurance and investment - to a remarkable £1.3 trillion, more-or-less equivalent to the entire annual output of the British economy or GDP.

Sources close to the negotiations said there are still important disagreements between the Treasury and the banks on the terms of the deal.

One contentious area is the size of the loss - known as the first loss - that the banks must incur before taxpayers pick up the tab.

The Treasury wanted the banks' owners, their shareholders, to be liable for the first 10 per cent of the loss.

But on £500bn of assets, that 10 per cent loss would potentially destroy their balance sheets - and thus end up weakening the banks, rather than strengthening them.

Second, is the size of the fee payable by the banks.

This would be in the form of participating preference shares to be issued to the Treasury and would probably be classed under banking regulations as core tier one capital - which means they would reinforce the financial robustness of the banks.

These shares would carry no votes. So the Government's voting control of Royal Bank would remain at 70 per cent and 43 per cent for Lloyds TSB.

But if the fee were set high, the Government's economic interest in these banks - it claims over the banks' assets - could approach 100 per cent.

In the sense of rights over the banks' profits and assets, there would be little or nothing left for Royal Bank's and Lloyds' private sector shareholders. This would represent "economic" nationalisation of the banks, if not formal nationalisation.

The banks and Treasury officials, together with teams of City advisers, are struggling to construct a formula that avoids this economic nationalisation.

[muppet]

http://www.gavinsblog.com/2009/02/23/did-shane-ross-forget/

Saw this on P.ie.

Shane Ross wrote a peice in April about how a group of investors were going to to set up a fund to 'teach the hedge funds a lesson'. He claimed at the time that one of them had told him this.

Funny how he has stayed quiet about it.

[bcarrier]

Senator Ross runs with the hare and chases with hounds .

The golden circle is a continuing distraction fron problems at boi and aib imo.

[muppet]

http://www.rte.ie/news/2009/0224/anglo.html

Gardaí from the fraud squad are carrying out searches at the headquarters of Anglo Irish Bank in St Stephen's Green in Dublin.

The searches are being conducted as part of an investigation led by the Director of Corporate Enforcement with members of the Garda Bureau of Fraud Investigation.

Search teams went into the bank's offices just after 9am this morning.

[whiskeysteve]

O how the mighty have fallen

[Lecale2]

http://www.rte.ie/news/2009/0224/economy.html

The Unions are calling for a national strike. They want the 6% pay rise agreed last year paid. Do they watch the news? 

[Main Street]

http://www.rte.ie/news/2009/0224/economy.html

The Unions are calling for a national strike. They want the 6% pay rise agreed last year paid. Do they watch the news? 

I read the article
'However, private sector unions argue that the deal already has sufficient provisions to assist firms in financial difficulties and who cannot pay the 6% increase.
They say that those who can afford to pay should not be allowed to back out of the deal'.

[Lecale2]

Inflation is running at 2.1%. Where's the justification for a 6% pay rise?

Companies are closing plants because Ireland is too expensive to do business in. Public servants are taking a pay cut (levy). Ireland has the highest minimum wage in Europe, the smallest tax payer base and the biggest budget deficit.

Wake up and smell the coffee before it's too late!!

http://www.finfacts.ie/inflation.htm

[Bogball XV]

http://www.rte.ie/news/2009/0224/anglo.html

Gardaí from the fraud squad are carrying out searches at the headquarters of Anglo Irish Bank in St Stephen's Green in Dublin.

The searches are being conducted as part of an investigation led by the Director of Corporate Enforcement with members of the Garda Bureau of Fraud Investigation.

Search teams went into the bank's offices just after 9am this morning.

Gosh, that's really really serious isn't it!!!  Appleby had no reason to take the guards with him, unless he was directed to do so by those on high, he is only in there to gather evidence (hmm, I wonder how many weeks/months too late in order to actually find anything useful) with which he can show the high court that a court inspector should be appointed.  The inspector then takes about 4 years to write a report on it which may recommend something, he will be stymied at every opportunity with judicial reviews and high court challenges, by the time the report comes out, its recommendations will be so emasculated that it will serve no purpose at all.
But then maybe the only purpose was to try and calm the restless mobs by pretending that we're serious??