Leviathan indeed!
The anger at last night’s political cabaret in Temple Bar, Leviathan, was palpable. And with my partiality clearly stated, the defenders of NAMA did not hold themselves to account well. The evening got off to an entertaining start, with the best of political satire as only the Irish know how, all resonating with the opinion that NAMA is closer to criminal theft than the contrary.
Mr. McWilliams declared his partiality at the beginning of the evening too, but despite promising to be impartial during the chairing, it could easily be argued that he was far from it. And yet, one could equally argue that he was forcing the government reps to face up to the inaccuracy of their soundbites.
McWilliams kicked off the evening by pressing Deputy Fahey for the source of the NAMA idea: Peter Bacon. McWilliams then suggested that Bacon is compromised as an advisor to one of the largest property developers in the country who’s portfolio will be going into NAMA. Deputy Fahey attemped to claim that we are following the Swedish model, but McWilliams wouldn’t let him away with that, pointing out the difference between what the Swedes did and what we’re going to do.
Boyle’s frank honesty was at once revelationary but simultaneously utterly incredible: ‘I think property prices have further to fall’; ‘I don’t have much confidence in the NAMA business plan either’; but his blase tone of ‘I don’t know who it was but it wasn’t me,’ was a red rag to a bulling crowd. There were many heckles from the audience calling for a General Election. When McWilliams asked for a show of hands on who wants an election, most went up.
Deputy Fahey didn’t understand Mathew’s point about the 20% contingency assumption in the business plan – even McWilliams tried to explain it, but to no avail. The bank referred to in the NAMA Business Plan, not named although known to be Barclays, had a 10% default rate on its entire loan book in the early ’90s, but found that most of it was in property. To use the same analogy in Ireland means one has to apply it to the entire Irish loan portfolio of €400bn i.e. €40bn – although the NAMA Business Plan claim they are being prudent by expecting a 20% default rate i.e. €80bn! At the 10% level, €40bn of the €77bn ear-marked for NAMA won’t be collected. We’re paying €54bn, we’ll collect €37bn under this scenario, therefore we lose €17bn. A bad day at the races.
The same person who told Frank Fahey he was compromised by his property portfolio and therefore not eligible to defend NAMA went on to egg him at the end of the night. Peculiarly, the ‘egger’ apologised to the audience in advance before turning to hurl his egg. While I sympathise with the sentiment, I would argue it was a line that shouldn’t have been crossed. How long before we see the scenes from Iceland on the streets of Dublin?
Dan Boyle was clearly exasperated by the claims that they had not done enough to understand the problem or come up with solutions. He said he had talked to everyone! Brian Lucey, Constantin Gurdgiev, and many others against, and everyone offered a different solution. He was at pains to point out that the public is protected in four ways: the assets underlying the loans; the shares already owned in the banks; risk sharing, albeit small; and the levy on profits. Both Mathews and McWilliams scoffed at the notion of the levy.
“Not only must Justice be done; it must also be seen to be done.”
If the pro-NAMA side of the house are still trying to rationalise the hostility they experienced last night, I offer this opinion: The optics are wrong.
When the banking crisis broke we had (and still have) two choices, NAMA [€54bn] or Pre-Privatisation [€31bn] (see the ECB opinion on the Irish banking crisis: “warn” against over-paying for assets; “preferable” not to nationalise). One is seen to favour the bankers, the other hasn’t been seen. It appears, and last night only re-inforced this, that the decision not to nationalise was made by a select privileged group behind closed doors before Christmas. All subsequent decisions appear to have been made with no other purpose than to get this decision through the parliamentary process:
- No public cost/benefit analysis of NAMA versus Pre-privatisation
- A Business Plan that arrives hours before a vote, and when analysed is found to contain clear logical errors and incredibly generous assumptions,
- The 11th hour appearance of the SPV to ‘hide’ the €54bn ECB loan off the National accounts.
- A systematic campaign of no information or dis-information, spin and soundbite, to shut down any debate, and several convenient distractions and side shows to keep the public’s mind off the issue.
A critical analysis of what we’re trying to do – fix the banks and get credit to businesses – and what we’re doing – NAMA – shows the glaring disparity between problem and proposed solution, and the equally glaring (and galling) beneficiaries of the proposed solution. For those who have taken the time to understand and are not among those beneficiaries, or more importantly, are expecting to be among the significant number of losers, one can understand their palpable anger. And yet, ‘We are where we are.’
Leviathan indeed!
Hi,
I attended last nights debate. I was not sure what to expect, a friend of mine offered me a ticket. Before the debate I was confident that the government were right with NAMA, well more accurately I was sure it was quite bad for the people of ireland but could not see any alternative. It was the ‘only game in town’ to quote McWilliams.
After the debate, I am left with the feeling that the government are very wrong and that there are better alternatives to NAMA. Thanks Peter for educating me. What scared me the most was the difference between Fianna Fail and the Greens. They are not even on the same planet let alone the same page.
I would not consider myself well up on economics or the markets, but I am now very anti-NAMA, and would like to see Peter Matthews views getting more attention.
I really fear for my future and the future of Ireland if NAMA goes ahead.
Over on leviathan.ie:
“Let me say firstly that I applaud all endeavours to facilitate such public debate on matters of vital national interest. However, unfortunately the “discussion” last night was so utterly unbalanced as to render it completely meaningless. The decision to invite David McWilliams to facilitate this non-debate when he is so nakedly biased was where most of the problem lay and the atmosphere he engendered was akin to a bear pit. Feeling too inhibited to express opinions that would not be well received by the closed-minded rabble and gaining nothing worthwhile from the experience we reluctantly left. Also, it was a pity that the early “comedy” took the form of shouted obscenities deemed to be some form of wit or biting satire. I don’t think so.”
There’s grounds for such criticism. However, I will add that when presented with the numbers by Peter Mathews as to how NAMA will lose at least €12bn, the pro-NAMA response is, and consistently has been, ‘we all know there are risks to NAMA’. That is not a satisfactory answer to the question. The answer is either, ‘Yes, that analysis is correct’ or ‘No, that analysis is incorrect because…’
Without arguments to the contrary, I expect NAMA to lose €12bn in a best-case scenario. Given the other factors, a pragmatic view would be €20bn. Obviously, the worst case scenario is the full €54bn plus interest. I hope to be corrected. And that’s while establishing the dreadful principle of bailing out the people that got us into this mess in the first place by doing something that no sane person would ever contemplate and deliberately overpaying, while creating a toxic economic monster that will infect and stultify the rest of the economy. Given this, why has the nationalisation option not been properly investigated?
I thoroughly enjoyed last nights show, however I agree with rorourke totally. The effort was reduced to one of light entertainment rather than serious debate. I also would like to see Peter Mathews and McWilliams on the NO to Nama side, debate the issue, with the minister for finance and another member of the government parties (a green). A very impartial chairperson is required and a really serious debate would take place. Leviathon it,s over to you, however there is some urgency required.
New electoral campaign being launched right now, PETER MATHEWS FOR PRESIDENT OF EUROPE.
I attended the Leviathan event last night and was shocked and bemused by the ignorance, arrogance and downright madness of the answers coming from Boyle and Fahy. They were like people from another planet. Boyle’s comment “I don’t have have much confidence in the NAMA business plan either” was mind blowing. Why did he not say this at the RDS two weeks ago? Why on earth then did the Greens vote for it?
He does not have any confidence in the plan… so what confidence does he expect the rest of us to have in it? You know, I believe he is right and I have none, nada, zero confidence in the Ponzi scheme.
A week before NAMA was voted on by the Greens, a Green councillor, a guy from Clare, was on Vincent Brown’s show, he told the country that their first Program for government “could be torn up” Yes, just tear it up! Now, Boyle does not believe in the NAMA plan!
For God’s then, lead your Party out of government without further delay. Resign! At least show some personal decency! Have the honesty to say I have changed my mind and go!
Anyone, at last nights event, got more than their 17 Euro worth of value. They got a clear exposition of NAMA and its inherent fatal flaws. Then they got to see two senior government politicians cowering, ducking, diving, unable to answer questions, unable to understand questions and unable to perform or understand simple maths, It was truly bizarre and even though I do not drink, I must say, I felt like starting last night.
Peter Mathews was the voice of reason of sanity at this debate.
Minister, forget about Dail amendments, stupid amendments 200 or more, to a plan that will never fly, an aerodynamic flop. The only people that still believe in this are auctioneers, barristers, and developers and the six banks. In other words, all of the vested interests.
You need to speak to Peter Mathews before NAMA ends democracy in this country, because that is precisely what it will do. Their was a palpable level of hostility apparent last night at what is normally a good humoured event. Imagine that multiplied by thousands of times that is what is being unleashed!
Minister if you visit this site, please minister, meet Mr. Mathews as a matter of priority!
I too was at last nights event, and yes david McWilliams was biased, but then that surely was expected( see http://www.davidmcwilliams.ie/2009/02/22/my-plan-to-save-the-country, yes February 09) by anyone following the gross incompetence being displayed by the current government. I asked Dan Boyle and Frank Fahy did they consider themselves experts to which there was a quick NO ( lest they be blamed later for the inevitable failure), so I then asked WHY ? were they not listening to the advise of experts. I got a very angry defence from Dan Boyle who listed some esteemed names, but then basically went on to say that we then made our own decision ( which is opposite to all expert advise )
On a more serious note :- Riots seem inevitable, I hope I’m wrong though!
I am saddened to say I witnessed one of the first premeditated actions of a likely rebellion which will see riots on the streets. I am further saddened that although I believe it is unnecessary, avoidable & not in our best interests as a nation, it seems inevitable now that it is going to happen.
Please tell me I’m wrong & that you will not sit by & let this happen.
Rise up, certainly, but peacefully & use your voice not your fists, batons or other weapons. Speak face to face, & write to everyone you know especially those charged with running the country & that includes the higher civil servants & board members.
There is a better way, Fianna Fail & the Greens are not the only show in town !
Sean Kearns
http://www.irishpeopleunion.com
“McWilliams kicked off the evening by pressing Deputy Fahey for the source of the NAMA idea: Peter Bacon.”
It would seem to me that MIKE SODEN put forward the bones of the idea, much earlier, in October 2008. Read the following article. It’s all there. It’s just wrapped up in another proposal (merging of the main banks). If Bacon is compromised, Soden is off the scale…
http://www.independent.ie/opinion/analysis/merger-of-aib-and-boi-is-the-only-way-to-save-sector-1496537.html
Let me expand on my post above and set out the timeline for the SOURCE of the NAMA idea:
OCTOBER 2008
- Mike Soden puts forward idea for NAMA wrapped up in a proposal to merge the main banks.
http://www.independent.ie/opinion/analysis/merger-of-aib-and-boi-is-the-only-way-to-save-sector-1496537.html
JANUARY – FEBRUARY 2009
- Group of private investors interested in acquiring the Irish banks commissions a report from FTI consulting who issue their recommendations through the Irish newspapers that the Irish government “should consider propping up land-values”
http://www.irishtimes.com/newspaper/finance/2009/0327/1224243553357.html
http://www.fticonsulting.com/en_us/resources/Documents/Greenspan_dublin_wp_v4.pdf
MARCH 2009
- Minister for Finance Brian Lenihan expresses “a preference for the creation of a property company to take troubled loans off the banks’ balance sheets” on advice from ‘independent’ economist Peter Bacon.
http://www.irishtimes.com/newspaper/finance/2009/0321/1224243200994.html