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

[armaghniac]

They'll get all their loans written off

The loan is not written off, the loan remains until you pay it off. Handing over the property may reduce the loan, just as if you handed back your house, but if the property is not worth the loan you still have to pay it off. Hopefully these people can be prohibited from having any further property dealings until they discharge their debt.

[Bogball XV]

They'll get all their loans written off

The loan is not written off, the loan remains until you pay it off. Handing over the property may reduce the loan, just as if you handed back your house, but if the property is not worth the loan you still have to pay it off. Hopefully these people can be prohibited from having any further property dealings until they discharge their debt.

but that would prove counterproductive, if we were to disallow these captains of industry, these risk taking entrepreneurs, these imaginative and creative genuises from partaking in the market, just who would or could provide the creative spark needed to get this damned country back on her feet again?

[tyronefan]

from what I have read  Carroll has personally guaranteed a large portion of these loans so he just cant walk away

He will lose everything he has including his family home

[Bogball XV]

from what I have read  Carroll has personally guaranteed a large portion of these loans so he just cant walk away

He will lose everything he has including his family home

The point is that in normal circumstances the various banks would already have taken possession of the assets of the companies over which they hold charges etc, there'd be a mad rush by them to try and secure their own bit of turf, but, they want to hold off and sell their loans on to NAMA, thus we as taxpayers have to bear the loss whilst the irresponsible lenders get a fools pardon.
It's not about Carroll personally, but given the gambles he's taken over the years his family home etc had to be on the line, after all what paid for these assets in the first place?  Also, one would imagine there might be one or two assets that aren't covered by any Personal Guarantees (which incidentally may not be worth all that much anyway).

[Rossfan]

from what I have read  Carroll has personally guaranteed a large portion of these loans so he just cant walk away

He will lose everything he has including his family home

I suspect them bucks will have plenty salted away in special places that can't be touched.

[orangeman]

from what I have read  Carroll has personally guaranteed a large portion of these loans so he just cant walk away

He will lose everything he has including his family home

I suspect them bucks will have plenty salted away in special places that can't be touched.

[/b]



Apparently NOT in Caroll's case.

[Lone Shark]

They'll get all their loans written off

The loan is not written off, the loan remains until you pay it off. Handing over the property may reduce the loan, just as if you handed back your house, but if the property is not worth the loan you still have to pay it off. Hopefully these people can be prohibited from having any further property dealings until they discharge their debt.

but that would prove counterproductive, if we were to disallow these captains of industry, these risk taking entrepreneurs, these imaginative and creative genuises from partaking in the market, just who would or could provide the creative spark needed to get this damned country back on her feet again?

In fairness Bogball, I think you're being sarcastic here, but the problem is that there are those out there who subscribe to this view of "an entrepreneurial class", as if they are a seperate breed born apart. Secondly, there remains the perception in this country that the ability to execute a "stroke" is somehow equivalent to the real thing, the ability to create wealth by creating a product or service that serves a unique market need.

In fairness to the Supreme Court, all they have basically done is ask for more time to consider this, but crucially, by hopefully going ahead with the receivership next week, they still allow for an actual firesale of assets before NAMA is enshrined in the national statute. That by itself should expose some of the airy-fairy numbers that NAMA is likely to work with to the masses, people who have this vague feeling of being robbed, but for the moment can't quite put their finger on how. My big concern is that AIB/RBOS or whoever decides to buy off ACC by next week, so as to prevent this receivership going ahead. If that happens, and right now it looks like it will, then we have a big problem. However I don't blame the supreme court for not acting rashly. I've a sneaking suspicion that we're going to need the judiviary in ways we never imagined in the coming five years, so them showing a little consideration is no bad thing.

As an aside, there is a strong possibility that Justice Kelly will have saved each and every one of us the equivalent of a €25k personal loan with his decision on Thursday - so kudos to him.

In my less angry moments, I can accept that something has to be done, and equally I can expect that aside from a quenching of the thirst for vengeance, seeing banks and bankers disintegrate is likely to be counter productive. We do need banks and there is a logical case for saying that we may as well stick with the existing ones. However they need to act differently than they have before, and for the life of me I can't fathom what is being done to ensure that the next time we get a similar opportunity to spend our way into poverty, we don't repeat the very same steps. Certainly the main men are talking a big game, but we don't seem to have any greater transparency, any greater eyes or claws within the Central Bank (who seems to have nothing left to do these days from what I can make out) or indeed any real improvement in the way we do business. Even the NAMA legislation itself has a few conspicuous-by-their-absence clauses, not to mention a few sections that a constitutional lawyer worth their salt would drive a bus through. Above all, it's cloaked in secrecy - the one thing that would never be permitted in Sweden, which we are supposedly modelling our actions upon.

It's fair to say that the vast majority of this country attended the party, so there's probably not a huge degree of unfairness in the fact that the hangover is being felt all over. However this government currently has all the credibility of a drunken antisocial yob - and if a person like that asked you to close your eyes and open wide, all the while assuring you that what they were doing was giving you solpadeine, I'd still prefer to have one eye on what's going on. The possibility that you might get a bit of rohypnol instead and wake up in a bath of ice with with a sore backdoor and no kidneys left is still on the table.

What I'm saying is that even though people were all to blame for it all to a certain extent, that's no reason to leave our guard down now and take what's coming without being pretty sure that it's a step in the right direction, and if it's just the same with ye, I'd prefer to take my medicine from a new doctor rather than the dodgy guy who sold me the unlabelled hooch.  

[Bord na Mona man]

Unfortunately one aim of Nama will be to put a false floor on a collapsing property market, because of some notional "long term value" these toxic property loans supposedly have.
We'll all be opening our wallets to try and achieve this aim.

Tom Parlon, former PD and former champion of free markets, doesn't want to the market to decide the true value of property after all.
http://www.irishtimes.com/newspaper/ireland/2009/0804/1224251960911.html

[armaghniac]

but that would prove counterproductive, if we were to disallow these captains of industry, these risk taking entrepreneurs, these imaginative and creative genuises from partaking in the market, just who would or could provide the creative spark needed to get this damned country back on her feet again?

While you are being sarcastic, I think that genuine entrepreneurs should be encouraged and I wouldn't criticise any real investor for failing, but these people were not inventing anything or exporting anything and there is no public interest in encouraging them. Many's a real business will run into hard times because of the mess they have made.

[Bogball XV]

Whilst the supreme court are only looking for a week to consider the argument, that week could be crucial for Carroll, each time he delays he gets a little closer to NAMA or as you point out, the possibility of ACC being bought off - an excellent piece of business on their part if they suceed (although perhaps we must query why they were in that position in the first place). 
I hear great things about Justice Kelly on a regular basis, principally that he's the only judge who actually understands financial dealings (Laffoy a little bit too) and last week proved that he may be the real deal -  i don't have the same confidence in the supreme court, although since the argument must be on a point of law, they shouldn't fcuk up.

I've just had a great idea for a venture that might get us out of this sorry mess btw, I was thinking that we could maybe grant planning permission to everyone in the country for their gardens, they could then develop their gardens, either themselves or sell it on to a builder, or alternatively they could just release some equity on their new asset from the banks.  We would create hundreds of thousands of jobs in construction, in spar shops and in the financial and legal industries, with the huge release of money into the economy, consumer spending would rocket again, old people would be safe into their retirement (they'd have the rental income from their new garden house which they could also sell at any time).  Quite a brilliant plan I think you'll all agree, the only drawback being that unemployment amongst gardeners might soar, but they could reskill as the tanaiste might say.  Am I a visionary too??

[FermGael]

http://www.irishtimes.com/newspaper/irelan...4251960911.html

A "fire sale" of residential or commercial property could result in prices falling by 50 per cent or more, the head of the Construction Industry Federation (CIF) has claimed. The organisation's director general Tom Parlon said the prospect of major banks seeking recovery of their debts from developers would have a disastrous effect on property prices and the economy. He said the whole rationale of establishing the National Asset Management Agency (Nama) was to prevent such a scenario.
[deleted]
Speaking on Morning Ireland on RTÉ yesterday, Mr Parlon said [...] "The reason that Nama was set up was to keep liquidity and to avoid fire sales. If it was the case that a very significant amount of residential and commercial property was to come on the market, certainly it would reduce the value," [...] "Any fire sale now without liquidity or confidence in the market could mean that property prices could be halved. If Nama was delayed further other financial institutions would go down this route. It would have a devastating effect on property prices and on the whole economy,"

House prices are 100% overvalued, and NAMA is designed to prop them up.  God forbid if they fall any further.

[bcarrier]

This could get incredibly messy.

I suspect few people understand residual property valuations but we are going to hear a lot about them in next twelve months. NAMA will be doing little else but looking at them.

I still cant believe that there has been no serious discussion amongst politicians about the impact of fiscal policy on residual property value.  

If they didnt want to take banks into public ownership then residual value of property could have been increased by scrapping VAT and stamp duty ( it could always be reintroduced later) . This would have improved bank and potentially developer positions ( although this could have been closed off with a special windfall tax if any had profits resulting from the change) . The unintended consequence might have been a further fall of 20% in second hand homes - but this will happen anyway IMO.

There are no institutions needed to implement these changes but no political will ( or wit) to cut these taxes . 

[An Gaeilgoir]

This could get incredibly messy.

I suspect few people understand residual property valuations but we are going to hear a lot about them in next twelve months. NAMA will be doing little else but looking at them.

I still cant believe that there has been no serious discussion amongst politicians about the impact of fiscal policy on residual property value.  

If they didnt want to take banks into public ownership then residual value of property could have been increased by scrapping VAT and stamp duty ( it could always be reintroduced later) . This would have improved bank and potentially developer positions ( although this could have been closed off with a special windfall tax if any had profits resulting from the change) . The unintended consequence might have been a further fall of 20% in second hand homes - but this will happen anyway IMO.

There are no institutions needed to implement these changes but no political will ( or wit) to cut these taxes . 

The commission on Taxation report out in September, i think, will be calling for the scraqpping of stamp duty and the introduction of a property tax using price band widths, a bit like car tax and engine sizes.  Again like bord snip these findings will be made public and will come into play in Autumn's budget. The commissions report will no doubt be used by the government to say its not us who are making the changes but the experts on taxation.

[bcarrier]

http://www.irishtimes.com/newspaper/breaking/2009/0811/breaking6.html?via=mr

what for nama now ...

[FermGael]

The bank that has not agreed to the deal will have huge leverage and will be able to get a better price for there debt from the other banks and the government, sorry i mean the Bank of Ireland

There is no way they will let the house of cards topple