The Department of Finance has a fascinating FAQ document about NAMA.
It asks the right questions but the ambiguities in the answers might explain why Michael Somers told the Public Accounts Committee that he didn't know how this would work.
A fundamental claim is that NAMA will "operate on a commercial basis". What commercial operation would buy these assets, even at a discount, and hold them for years without any guarantee that the borrowers will repay the loans? Another fundamental requirement is to act in line with European Commission guidance.
Here is my summary of the answers.
1. LOANS TRANSFER
1.1 What loans will be transferred?
The eligible land and development loans of each bank, but "eligible" will mean whatever they decide.
1.2 Will land and development loans outside of Ireland be transferred to NAMA?
Yes
1.3 Will there be transparency in relation to loans transferred to NAMA?
Yes meaning No. Only overall numbers will be published.
1.4 What will happen if individuals or companies who have performing loans do not want their
loans to be transferred?
Don't know - wait for the legislation
1.5 Will some borrowers just stop repaying their loans?
If so, NAMA will chase them.
2. VALUATION
2.1 What write-down will be applied to loans?
"appropriate write-down", meaning "Don't know"
2.2 Will there be a fair discount or will the banks get off lightly?
Don't know yet.
2.3 Who will be footing the bill for the loans – the banks, the developers or the taxpayer?
NAMA will get a discount (but the buck will stop with NAMA)
3.1 NAMA isn’t a toxic bank – why not?
NAMA will not be taking deposits from the public and will not have a banking licence. NAMA will manage a mix of performing and non-performing loans’
8
3.2 Do the banks have to give up loans that they don’t want to?
Don't know - wait for the legislation
3.3 Will Anglo-Irish Bank be used as a ‘bad bank’?
No but Anglo will remain as a going concern
3.4 Will Anglo be able to participate in this scheme?
Depends on the Anglo business plan
3.5 How will the write off impact on the banks’ capital ratios?
Yes, replacing loans with Government bonds will help.
3.6 Will the Government be prepared to put more capital into banks, and on what conditions?
To be decided on a case-by-case basis but equity may be taken in return.
3.7 Will the loss of profits not further inhibit the capital position of the banks?
Hopefully, the banks will be left stronger and make profits.
3.8 Will the terms and conditions of a loan transferred to NAMA change?
Not initially.
4. DEVELOPERS
4.1 Is the Government just bailing out the Developers?
No, just a change of counterparty with NAMA replacing the banks. (But no explanation about how to pursue the developers)
4.2 Will the taxpayers have to pay for the banks’ mistakes?
Depends on level of discount and long-term value of the properties
4.3 How much will this cost the tax payers?
Don't know. €80-90Bn. is the book value of loans. If there is a loss, there will be a levy (but how do we stop the banks passing the levy on to their customers?)
15. GENERAL GOVERNMENT FINANCES
5.1 What effect will this have on Government debt?
Financed by either a Government or NAMA bond.(no further information)
5.2 How will this effect the country’s credit rating?
The bond will increase the Debt/GDP ratio. The ratings agency will decide.
5.3 Can the country afford this?
Ireland has more scope than other countries to increase the level of debt Give it a few years of double-digit deficits.
Monday, May 18, 2009
Sunday, May 17, 2009
It's too Late Late for RTE
I'm allergic to media hype so I avoided the coverage of the Kenny/Tubridy switch as much as humanly possible short of abandoning the mass media.
Now that the fanfare has died down, I have a few questions:
Why is RTE feeding its own fantasies?
The Late Late is not" the longest-running chat show in the world". There is an interesting list of long-running US TV series. Many have been going since the 1950's. The Tonight Show, the classic late night chat show, has been running since September 27, 1954 and is still going strong with Jay Leno. (How I wish we had a current affairs programme to match "Meet the Press" under Tim Russert!)
I suppose this hype is partly to generate advertising revenue and, as a licence fee payer, I can't fault RTE there. But stick to the facts boys.
My second question is more significant: what did the Late Late achieve under Pat Kenny? There is no doubt that the Late Late under Gay Byrne was the most important TV programme of its era, hosting many seminal debates on issues of social and political importance and providing a stage for many aspiring talents. Late Late debates had dramatic effect on how we thought about divorce and contraception, taxation and public services, gay rights etc.
What was the most important debate in the Kenny era?
Gay Byrne had a genius for mixing light entertainment with serious discussion. This sugar-coating was a necessary device to introduce topics that traditionally Irish society refused to contemplate. I found the Kenny-era Late Late to be an incongrous mix, jumping from musical interludes, to phone-in competitions, to awkward chats with audience members, and then to a serious discussion. Worst of all were the attempts at comedy.
Final question: did Pat jump or was he pushed?
His announcement seem to come out of the blue, even the Late Late staff didn't hear until the last minute. Did RTE management offer him Monday nights as the price of shifting him or did he want something more serious than the Late Late? Did management believe his court battle with his neighbour had damaged his image? If so, they forget Gaybo's reputation for "parsimony".
Since I first wrote this blog, the Kennys have given an interview to the RTE Guide saying Kathy gave Pat an ultimatum. Maybe, but that doesn't say much for his planned Monday night show.
I also came across a very bitchy comment by a former researcher. It looks like Pat's Late Late will be remembered for low-lights, not highlights.
The mystery is why Pat Kenny, who is an excellent radio presenter and one of the best radio current affairs interviewers, fails so miserably with the Late Late. This article says that, unlike Gaybo who was obsessive, Kenny did not have editorial control of the Late Late. That would explain a lot. I don't imagine Ryan Tubridy will be given any control.
Fiona McCann has a revealing piece in today's IT. The "memorable moments" she recalls were almost all embarrassments for PK. The one exception was Brendan Gleeson's anger at our "health service" and McCann rightly says PK "allowed him space to talk". That was Gaybo's secret: it certainly worked with Pee Flynn and Terry Keane.
The Seinfeld episode was probably PK's low-point because it was so unprofessional. He was lucky that Jerry was in good humour. Look what he did when Larry King was ill-prepared for an interview:
Now that the fanfare has died down, I have a few questions:
Why is RTE feeding its own fantasies?
.
Managing Director of Television Noel Curran said today: "Taking on the mantle of presenting the longest-running chat show in the world and a key entertainment brand for RTÉ is no easy task. We have thought long and hard about who the right presenter is to bring The Late Late Show into its 48th year and its next incarnation: We're delighted to announce that broadcaster is Ryan Tubridy
The Late Late is not" the longest-running chat show in the world". There is an interesting list of long-running US TV series. Many have been going since the 1950's. The Tonight Show, the classic late night chat show, has been running since September 27, 1954 and is still going strong with Jay Leno. (How I wish we had a current affairs programme to match "Meet the Press" under Tim Russert!)
I suppose this hype is partly to generate advertising revenue and, as a licence fee payer, I can't fault RTE there. But stick to the facts boys.
My second question is more significant: what did the Late Late achieve under Pat Kenny? There is no doubt that the Late Late under Gay Byrne was the most important TV programme of its era, hosting many seminal debates on issues of social and political importance and providing a stage for many aspiring talents. Late Late debates had dramatic effect on how we thought about divorce and contraception, taxation and public services, gay rights etc.
What was the most important debate in the Kenny era?
Gay Byrne had a genius for mixing light entertainment with serious discussion. This sugar-coating was a necessary device to introduce topics that traditionally Irish society refused to contemplate. I found the Kenny-era Late Late to be an incongrous mix, jumping from musical interludes, to phone-in competitions, to awkward chats with audience members, and then to a serious discussion. Worst of all were the attempts at comedy.
Final question: did Pat jump or was he pushed?
His announcement seem to come out of the blue, even the Late Late staff didn't hear until the last minute. Did RTE management offer him Monday nights as the price of shifting him or did he want something more serious than the Late Late? Did management believe his court battle with his neighbour had damaged his image? If so, they forget Gaybo's reputation for "parsimony".
Since I first wrote this blog, the Kennys have given an interview to the RTE Guide saying Kathy gave Pat an ultimatum. Maybe, but that doesn't say much for his planned Monday night show.
I also came across a very bitchy comment by a former researcher. It looks like Pat's Late Late will be remembered for low-lights, not highlights.
The mystery is why Pat Kenny, who is an excellent radio presenter and one of the best radio current affairs interviewers, fails so miserably with the Late Late. This article says that, unlike Gaybo who was obsessive, Kenny did not have editorial control of the Late Late. That would explain a lot. I don't imagine Ryan Tubridy will be given any control.
Fiona McCann has a revealing piece in today's IT. The "memorable moments" she recalls were almost all embarrassments for PK. The one exception was Brendan Gleeson's anger at our "health service" and McCann rightly says PK "allowed him space to talk". That was Gaybo's secret: it certainly worked with Pee Flynn and Terry Keane.
The Seinfeld episode was probably PK's low-point because it was so unprofessional. He was lucky that Jerry was in good humour. Look what he did when Larry King was ill-prepared for an interview:
Monday, May 4, 2009
This map from Eurostat shows yields for Government Bonds in respect of EU member States. In this case, being green is not a good thing for us. Look at the company we're keeping! The difference will cost us billions at a time when the State's borrowings are set to mushroom. The countries in beige are benefitting from bonds yielding under 3% - let's see what the NTMA has to offer in the coming months.
Developers' Loans
The scale of the problem facing NAMA is neatly illustrated by this graph, based on figures by Joe Brennan of the Indo.
with indicate that developers' loans account for 58Bn. AIB is clearer the biggest lender but, relative to its scale of operation, Anglo is in a league of its own. Why we are pouring money into Anglo is beyond me. By what measure is Anglo systemic?
with indicate that developers' loans account for 58Bn. AIB is clearer the biggest lender but, relative to its scale of operation, Anglo is in a league of its own. Why we are pouring money into Anglo is beyond me. By what measure is Anglo systemic?
Exchequer Returns
The latest Exchequer returns are grim but the tax returns correspond with the Government's projections in the supplementary Budget. No prizes there less than a month after the projections were made. The real test will come next month when the Government is expecting to bring total revenue to €13,494M. i.e. additional €3,400M which is almost twice the revenue raised in March.
The published "Cumulative Profile for Voted Expenditure, Tax Revenue and Debt Service Expenditure" details the Government current expectations (very different from those which provided the basis for the Budget last October). This document assumed tax revenue of €10,124M for the year to end-April, which is very close to the actual outturn of €10,098M.
This document projected culmulative expenditure of €15,633M for the same period. This seems to correspond to the amount of Voted Expenditure in the April returns.
The published "Cumulative Profile for Voted Expenditure, Tax Revenue and Debt Service Expenditure" details the Government current expectations (very different from those which provided the basis for the Budget last October). This document assumed tax revenue of €10,124M for the year to end-April, which is very close to the actual outturn of €10,098M.
This document projected culmulative expenditure of €15,633M for the same period. This seems to correspond to the amount of Voted Expenditure in the April returns.
Saturday, May 2, 2009
Criminal "Justice"
I was horrified to read of another travesty of justice by a sentencing judge this week. I started a thread on Politics.ie but I did not expect to hear from the victim's family who gave shocking details of this terrible crime. The information they provide paints a grim picture of their father's brutal murder at the hands of a callous and vicious young man.
The most outrageous aspect of the case, in my view, is the apparent failure of the judge to acknowledge the profoundly unnatural act of parricide. There is more than a hint of J.M. Synge in this story. Is there a Pegeen Mike who would slip a noose around this thug and say
"A strange man is a marvel, with his mighty talk; but what's a squabble in your back-yard, and the blow of a loy, have taught me that there's a great gap between a gallous story and a dirty deed."
A dirty deed is what Thomas Cunningham did when he kicked his father unconscious and left him to die in the garden of their home in Roscommon. He was just 18 at the time of the killing. He was born in England but returned to Ireland two years earlier to life with his father and grandparents in Roscommon.
The jury failed to convict this thug of murder even though he clearly intended to cause serious injury to his father. (Despite the clear evidence that the accused lay in wait for his father, defence counsel is quoted as telling the jury that his client "didn't mean to kill his father")
Judge Paul Butler gave him six years suspended with a €100 bond so this young killer is on his way back to England, free as a bird.
His father's siblings are naturally disgusted. They probably expected something like justice for their brother and now they wonder whether alcoholic fathers are fair game?
His first cousin is Cllr. John Kelly who was Mayor of Roscommon at the time of the "murder". Political connections cannot bring justice for the victims, but they are invaluable to the guilty.
Of course, this farce would not be complete if the second act (arrest and charge) had not brought its own drama: the evidence of the State Pathologist wasn't ready so the accused was released by the District Court, re-arrested that day and then re-released by the court. No surprise, he skips off to England.
At first, I was inclined to give him credit for coming back to face charges but then I realised there may be a more sordid explanation. I wonder if it is connected with the death of his grandfather just after he fled to England (of course, the grandfather had to go into care when his son was killed and the grandfather died there 4 months later). The grandfather tried to help his son when he was lying unconscious but the thug of a grandson wouldn't help. Now that grandad was dead, there was no surviving witness so this thug could claim that his only gave his dad a couple of kicks and that his head had smashed off the floor when they were trying to lift him up.
Today's Independent gives coverage to the family's reactions.
The most outrageous aspect of the case, in my view, is the apparent failure of the judge to acknowledge the profoundly unnatural act of parricide. There is more than a hint of J.M. Synge in this story. Is there a Pegeen Mike who would slip a noose around this thug and say
"A strange man is a marvel, with his mighty talk; but what's a squabble in your back-yard, and the blow of a loy, have taught me that there's a great gap between a gallous story and a dirty deed."
A dirty deed is what Thomas Cunningham did when he kicked his father unconscious and left him to die in the garden of their home in Roscommon. He was just 18 at the time of the killing. He was born in England but returned to Ireland two years earlier to life with his father and grandparents in Roscommon.
The jury failed to convict this thug of murder even though he clearly intended to cause serious injury to his father. (Despite the clear evidence that the accused lay in wait for his father, defence counsel is quoted as telling the jury that his client "didn't mean to kill his father")
Judge Paul Butler gave him six years suspended with a €100 bond so this young killer is on his way back to England, free as a bird.
His father's siblings are naturally disgusted. They probably expected something like justice for their brother and now they wonder whether alcoholic fathers are fair game?
His first cousin is Cllr. John Kelly who was Mayor of Roscommon at the time of the "murder". Political connections cannot bring justice for the victims, but they are invaluable to the guilty.
The jury heard that the deceased had been drinking on the day leading up to his death and came home drunk. The defendant was annoyed with his father who had been sent out earlier to buy food.He grabbed his father and punched him outside the house. The deceased fell to the ground where the accused said he punched him twice more and kicked him.The deceased was helped up but fell down again and was left in the garden overnight with a duvet and pillow. He was found dead the following morning.
Of course, this farce would not be complete if the second act (arrest and charge) had not brought its own drama: the evidence of the State Pathologist wasn't ready so the accused was released by the District Court, re-arrested that day and then re-released by the court. No surprise, he skips off to England.
At first, I was inclined to give him credit for coming back to face charges but then I realised there may be a more sordid explanation. I wonder if it is connected with the death of his grandfather just after he fled to England (of course, the grandfather had to go into care when his son was killed and the grandfather died there 4 months later). The grandfather tried to help his son when he was lying unconscious but the thug of a grandson wouldn't help. Now that grandad was dead, there was no surviving witness so this thug could claim that his only gave his dad a couple of kicks and that his head had smashed off the floor when they were trying to lift him up.
Today's Independent gives coverage to the family's reactions.
Tuesday, April 28, 2009
Designs for our Future
The waste of public funds is the cause of intense resentment in the post-Tiger era. Examples abound of Government waste and poor value for money (HSE, e-voting, FAS). But in truth there was extreme wastefulness in private spending also and nowhere was this more evident than in domestic property. Not only did we spend extravagant sums on purchasing real estate, we also paid unreal prices for building work, for kitchen appliances and fitting, for all types of domestic luxuries.
The Designs for Life series on RTE is intended to show that architects can make houses better suited to the needs of their owners. Instead, it has unwittingly documented a wasteful era. The last programme was an extreme example which showed a couple spending over a million euro on a house in a rural part of East Clare.
I used to think that all those soul-less, ugly shoeboxes were the product of ignorant developers, short-sighted developers, greedy bankers etc. but I'm beginning to think that, in reality, they are what Irish people want. First-time buyers might have little choice (although I think the market would respond to some degree to their preferences) but when people can afford something more expensive than a bog-standard three-bed semi, they spend it on space and glitz, not on aesthetics and not on the environment (except for phony touches).
Most Irish people don't even understand that good design can make a house a better home i.e. the basic premise of this series. First-time buyers might be forced to accept bad design in the hope of "getting on the property ladder" but look at the McMansions strewn across our beautiful landscape. Not only are these houses eyesores but I now realise that they don't even function rationally for their owners, with dead spaces, inefficient designs, dysfunctional layouts etc.
If the problem was just aesthetic, I might put it down to a difference of taste but there are objective, practical objections which are really design failures. I'm beginning to think most Irish people don't grasp the importance of design i.e. working out what you want a house to do, how you want to live etc. and then seeking solutions based on the site, the budget etc. . They seem to believe that commonsense or tradition will provide the solutions.
In recessionary times, the case for good design is stronger than ever. The couple last night would have been much better served by a well-designed house at half the size (and price!). Nonetheless, there will be very little scope for Irish architecture in the coming years. The tragedy is that, apart from some notable public buildings, the standard of Irish architecture during recent years, which could have been a golden era, is now irredeemable The couple last night were being ripped-off by the builders not the architect but the coming years will see even more false economy as Irish people cut out the architects from the few projects going.
This is not just a problem of domestic architecture. It clearly has a profound impact on how Irish families live their lives. Even those fortunate enough to live in large expensive houses are all to often not living in a space that suits their lifestyles. That has a negative impact on family life.
There are also broad economic implications. Ireland will only emerge from the current crisis when it is again competitive in the world market. The sources of competitiveness for the Celtic Tiger (low wages, demographics) will probably not help us in future. That means being competitive through being efficient and thinking ahead of our competitors, in short: competitiveness will require good design.
The Designs for Life series on RTE is intended to show that architects can make houses better suited to the needs of their owners. Instead, it has unwittingly documented a wasteful era. The last programme was an extreme example which showed a couple spending over a million euro on a house in a rural part of East Clare.
I used to think that all those soul-less, ugly shoeboxes were the product of ignorant developers, short-sighted developers, greedy bankers etc. but I'm beginning to think that, in reality, they are what Irish people want. First-time buyers might have little choice (although I think the market would respond to some degree to their preferences) but when people can afford something more expensive than a bog-standard three-bed semi, they spend it on space and glitz, not on aesthetics and not on the environment (except for phony touches).
Most Irish people don't even understand that good design can make a house a better home i.e. the basic premise of this series. First-time buyers might be forced to accept bad design in the hope of "getting on the property ladder" but look at the McMansions strewn across our beautiful landscape. Not only are these houses eyesores but I now realise that they don't even function rationally for their owners, with dead spaces, inefficient designs, dysfunctional layouts etc.
If the problem was just aesthetic, I might put it down to a difference of taste but there are objective, practical objections which are really design failures. I'm beginning to think most Irish people don't grasp the importance of design i.e. working out what you want a house to do, how you want to live etc. and then seeking solutions based on the site, the budget etc. . They seem to believe that commonsense or tradition will provide the solutions.
In recessionary times, the case for good design is stronger than ever. The couple last night would have been much better served by a well-designed house at half the size (and price!). Nonetheless, there will be very little scope for Irish architecture in the coming years. The tragedy is that, apart from some notable public buildings, the standard of Irish architecture during recent years, which could have been a golden era, is now irredeemable The couple last night were being ripped-off by the builders not the architect but the coming years will see even more false economy as Irish people cut out the architects from the few projects going.
This is not just a problem of domestic architecture. It clearly has a profound impact on how Irish families live their lives. Even those fortunate enough to live in large expensive houses are all to often not living in a space that suits their lifestyles. That has a negative impact on family life.
There are also broad economic implications. Ireland will only emerge from the current crisis when it is again competitive in the world market. The sources of competitiveness for the Celtic Tiger (low wages, demographics) will probably not help us in future. That means being competitive through being efficient and thinking ahead of our competitors, in short: competitiveness will require good design.
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