What is truth?

Archive for the ‘Bank of Ireland’ Category

spreads tell a story

CDS spreads  

Mr Lenihan, these figures tell the Irish People the real story the spreads cannot be dismissed and you are going to have to come clean on the true nature of the Banks derivatives time bomb

No more account gimmickry! No More drip, drip losses!

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Welcome to the crises of Credit

Welcome to the crises of Credit

Ireland is going through a crises of credit .The attached video clip explains how this crises happened

And hopefully also gives you an insight to the problem we are facing. So the next time Brian Lenihan says we have turned a corner or property has bottomed out you will know better.

We haven’t even begun to deal with the real problem and that is the derivatives time bomb.

Credit default swaps are mentioned in the video clip pay close attention to them!

With the government having embarked on the slash and burn budgets and now their attempt to get the opposition to sign up to even tougher budgets and all because they want to hand over the savings to international “investors” you don’t have to be a genius to see that this is bringing us down the road to destruction Why? Because they are taking away the means for the still paying home owners to pay their mortgages, people start losing their jobs and then they will start to default, already 90,000 people are behind in their mortgages payments and that is before we even get started on the even tougher budgets

Of 2011,2012,2013,2014 each budget will have to slice off approximately 5,000,000,000:00 each year of the budget deficit and that is not counting the billions that we have to pay in interest on the remanding national sovereign deficit plus the cost of bailing out Anglo Irish Bank, the bonds sold into the market by the rest of the banks .

The government has to come clean on the Credit default swaps and the leveraging exposures of the banks only then will we know the exact nature of the problems facing us.

We are nowhere near the bottom and lenihan knows it only too well and now the opposition parties have some idea as well! With the government’s insistence on bailing out the private bank Anglo Irish and their establishment of NAMA they have created the perfect storm. They have done exactly the wrong thing; they have rewarded the gambling investors and are cowering down to their demands to be bailed out and have the Irish taxpayers pay for their sour investments.

This course of action is not surprising because the government are receiving advice from the same advisers that advised the international investors to lend their funds to Anglo in the first place!

In a nutshell vested interests are running the finances of this country and when nothing is left they will consent to calling in the IMF who will have no other option then other than to sell off the country in bits and pieces to the same vested interests

What a scam!

How spin works

There you have it Brendan Keenan (Independent Newspapers) says the banks are fine swallowing the government’s line that the Irish Banks aren’t insolvent. Then we had Professor Morgan Kelly (UCD) advocating allowing the non retail (Anglo Irish Bank) banks to be let go! Then we had Kevin McConnell, Head of Research, and Bloxham Stockbrokers again touting the spin of the Government

Fast forward to today and see who was right surprise surprise why the noble professor.

Now what have learned out of this?

The establish news media in towing the government line and you can’t believe a word from the vested interests of people like Bloxham Stockbrokers who after all want to sell you shares in these Toxic banks Stockbrokers get paid in fees on trades. They have no incentive to talk down the market. It hasn’t gone unnoticed how they have been the cheerleaders for NAMA.

Markets are right to be worried

Markets are right to be worried — ‘final’ €50bn to fix banks looks like tip of iceberg

Sunday October 10 2010

THE soaring cost of bailing out the banks means that Ireland is now locked out of the bond markets.

Lenders are terrified that they might not get their money back. And they are right to be worried because the real cost of fixing our broken banking system is almost certain to far exceed even the €50bn figure that has so terrified Irish taxpayers and the international financial markets.

Last week, Finance Minister Brian Lenihan announced that the cost of fixing Ireland’s broken banking system had risen once again. He put the “final” cost of sorting out the Anglo mess at between €29bn and €34bn, up from the €25bn figure that had been previously indicated by official sources.

Just for good measure Mr Lenihan also announced that AIB would require an extra €3bn of new capital while the Irish Nationwide needs an extra €2.4bn.

When the estimated cost of bailing out each institution is totted up, the total comes to just more than €50bn.

That is a truly terrifying figure, the equivalent of about 40pc of the value of this year’s economic output as measured by GNP.

The reaction to Mr Lenihan’s announcement was immediate and severe. The government was forced to cancel the last three monthly bond auctions of 2010 as international investors insisted that the government devise a credible fiscal strategy; while the political system went into a deep shock from which the only escape route is likely to be an early general election.

Unfortunately, things aren’t as bad as Mr Lenihan told us last week.

They are almost certainly much worse.

First things first. Even the €34bn cost of bailing out Anglo, which the government insists is a “worst-case scenario”, will almost certainly be exceeded. That is the view of ratings agency Standard & Poor’s, whose bearish stance on the likely cost of the Irish bank bailout has consistently been vindicated by events.

For what it is worth, some analysts now reckon that bailing out Anglo will cost up to €40bn.

This would push up the total cost of fixing our banks to €55bn.

However, horrific and all as it might be, a €55bn tab for sorting out the banks might be just about bearable if we and our creditors could be confident that this was the final figure. Unfortunately we can’t be sure that the meter will stop running at even this enormous figure.

When one looks closely at the figures published last week it is clear that, with the exception of Anglo, the extra capital being pumped into the banks relates almost exclusively to losses suffered on loans being sold to Nama or, in the case of AIB and Bank of Ireland, loans of between €5m and €20m that had originally been destined for Nama but will not now be transferred to the state’s bad bank.

Which, of course, begs the question, if the banks have suffered such horrific losses on the loans they are transferring to Nama, about a fifth of their total peak lending, what sort of losses can they expect on their other loans?

When it published its half-year results on August 4, AIB revealed that, after transferring about €23bn of bad loans to Nama and the disposal of its Polish, American and UK interests, that it would have a loan book of about €81bn.

This loan book will include €27bn of Irish residential mortgages, €32bn of business banking loans, €16bn of commercial and SME loans and €6bn of personal loans.

Over at Bank of Ireland, the composition of its expected post-Nama and disposals loan book looks remarkably similar to that its great rival.

Bank of Ireland is expecting to have a total loan book of €82bn of which €28bn will be Irish mortgages, €31bn of non-property lending to SMEs and other corporates, €24bn of property and construction lending and €4bn of consumer lending.

Meanwhile, Irish Life & Permanent‘s mortgage banking subsidiary Permanent TSB, which has transferred no bad loans to Nama and has not had to be bailed out by the taxpayer, had a €38.7bn loan book at the end of June which included €27.6bn of Irish residential mortgages, €8.1bn of UK residential mortgages, €2.3bn of commercial lending and €1.5bn of consumer lending.

What are the odds on at least some of the banks’ post-Nama loan books going bad?

Between them the six Irish-owned banks had €99bn of residential mortgages on their books at the end of June. With house prices now down by at least 50pc from the peak and still falling, a significant writedown in the bank’s mortgage loans books is inevitable.

Even a 20pc writedown would cost the banks a further €20bn in fresh loan losses.

The combined €50bn that AIB, Bank of Ireland and the Permo have lent to SMEs and other companies must also be vulnerable to further, substantial writedowns as is their €11.5bn of personal lending. And as for the banks’ non-Nama property and construction lending, I’d be very surprised if it wasn’t cause for a few sleepless nights among the surviving bank bosses.

Add it all up and it is clear that even the €55bn estimate for the cost of bailing out the banking system will be comfortably exceeded, with Standard & Poor’s now putting the likely figure at €90bn.

The way things are going, I suspect that the S&P estimate could well turn out to be a floor, below which the cost won’t fall, rather than a ceiling, above which it won’t rise.

Comment :

             +derivative Losses 200,000,000:00?

This figure is creeping up and up and up and This Minster Lenihan is definitely not firing on all cylinders!

He is going in the wrong direction, Mr Lenihan is still digging an even bigger hole and I think we will not now be able to get out of it without massive help from the IMF.

With the available figures still dirp, dirp, dripping out of the Finance Department I now believe we are looking at a possible 150,000,000,000:00 (Billion) but without a look at the books in Bank of Ireland, Allied Irish bank, and Irish Life and Permanent, remember these institutions are issuing their own bonds and the government are guaranteeing these bonds.

There are bonds coming up for renewal to the tune of 30 to 45 Billion from the various banks and I can’t see how the banks are going to re-finance under the current circumstances.

Needless to say we are not been given the full figures and I expect that Lenihan and his gang of financial terrorists will try to sneak out more bad figures soon ,this would more than likely be done using cronies from the various media they control .

At this stage we the public have been softened up and there is likely to be more and more drip drip feed of bad news.

The government’s attempt to con the opposition parties into a half-baked union is most telling and this tells me that the real figures must be really bad!  Even worse that my figures as I keep reminding people there is no mention of the huge losses on their derivatives trades by the  various banks and these losses will have to be brought out for all to see sometime .  
    
This brings a whole new meaning to the praise “Well connected”
This stinks to high heaven!

http://thepressnet.com/2010/10/03/nama-changes-were-designed-to-keep-bank-of-ireland-private/

and http://thepressnet.com/2010/10/02/majority-of-countrys-banking-system-nationalized/

Bank of Ireland and accounting gimmickry

Bank of Ireland announced that €2.1bn of formerly NAMA-bound loans would not be going to NAMA. Where are they going, if anywhere? Why are they not going to NAMA? Is this a further contraction in NAMA’s performing loan portfolio (BoI have had the best performing loans thus far evidenced by their top of class 36% average weighted haircuts on Tranches 1 and 2). It is interesting that the EU Decision on BoI’s future which was made in July 2010 has not yet been made public more than two months later. BoI emerged from yesterday’s statements as the only healthy NAMA Participating Institution in the sense that it doesn’t need additional capital. Has some jiggery pokery gone on with the €2.1bn of formerly NAMA-bound loans to enable BoI to meet its PCAR requirements?

Full article here http://namawinelake.wordpress.com/author/namawinelake/

German war reparations

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It took Germany 90 years to pay off 25 billion in war reparations for the First World War.
The US gulf will need 20$ Billion to clean it up .

Ireland is now been saddled with debts of 36.5 billion and that’s just Anglo Irish Bank plus the other banks another 14 billion a nice round 50,000,000,000:00
How long will it take for this little country to pay off this private debt?
Cowen and Lenihan will go down in history as the most incompetent politicians in Irish History and the leaders of the opposition parties coming in close behind.
This country needs competent men and woman in the dail and not selfish leaches sucking our country dry.

Place you’r bets on Bank Of Ireland

 

A few months ago, I said that  Bank of Ireland share price would fall  to 55 cent  and even lower down to the 20’s . Any of my followers that took heed of my advice will now be nursing huge profits

Bank in April I warned that the rights issue was a complete rip off and the Government went ahead and purchased 575.6 million shares at €1.80 each. So at this mornings prices we the taxpayers have sustained loss again of 70 % = 402.92 million Euros in 5 months

In any other business these incompetent baboons Lenihan and Cowen  would be kicked out of office  ,Truly monkeys wouldn’t do any worse!

As for the distressed shareholders I afraid there is more bad news on the way .Bank of Ireland I believe ,Is harboring derivatives, and the news  cannot be  good . Anglo and Allied Irish Bank are also in the dog house and nothing will change the direction of the shares until the full facts are known and I don’t mean the banks telling us fibs we need to have an independent audit done on their derivatives trades of which I believe we are looking at 150billion at least in losses

In other words all the banks are insolvent and we are on course for a final showdown with the IMF having to step in and save the day

Shareholders get rid of the toilet paper you are holding.

http://thepressnet.com/2010/04/29/aib-shares-worth-0-60-cent/

http://thepressnet.com/2010/05/20/ponzi-scheme-warning/

http://thepressnet.com/2010/04/26/%e2%80%9cthis-is-a-blatant-attempt-to-rob-existing-shareholders-of-the-merger-holding-of-the-carcass-that-is-bank-of-ireland%e2%80%9d/

http://thepressnet.com/2010/08/11/bank-of-ireland-posts-huge-losses/

Lenihan logic: heads you win and tails you win for the bondholders

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Irish Finance Minister Demonstrates that he doesn’t believe in Capitalism
By The Fundamental Analyst, on September 24th, 2010
Here again we see another case of those that embraced capitalism on the way up, shudder at the consequences when things go the other way. Take the latest comments from the Irish Finance Minister, from Reuters:
Irish finmin says no chance banks, govt will default
DUBLIN, Sept 22 (Reuters) – It is unthinkable that Ireland or its banks would default on senior debt, Finance Minister Brian Lenihan said on Wednesday.
Opposition politicians and some media commentators have called on Lenihan to force bondholders in Anglo Irish Bank [ANGIB.UL] to take some of the hit for the nationalised lender’s massive losses, which are a major burden on the exchequer.
“It’s unthinkable that Ireland would default on senior debt or that Ireland’s banks would default on senior debt,” Lenihan told Reuters in parliament.
“Ireland is not prepared to be some kind of social experiment for bank default.”
Why is it unthinkable? I’m not up to date with the extent of Anglo Irish Bank’s problems, but if the losses are big enough to eat through all subordinated debt then senior debt is next in line, simple. This is what happens in a restructuring, equity holders get taken out and bondholders take a haircut. Maybe the losses aren’t that big that senior bondholders need to take their lumps, but even so, to make a blanket statement such as the Irish FM has made demonstrates that he is firmly of the belief that bondholders aren’t responsible for their mistakes and that capitalism should be suspended when things go pear-shaped.
 
Comment:
There you have it once again Lenihan is way out of touch with the norms of capitalism
Its all about risk that’s why bondholders get to demand such high interest payments because there taking a gamble and if things go pair shaped they go and take a bath
Lenihan has a logic of heads you win and tails you win for the bondholders and they love him for it!
Maybe it would be better if Lenihan was in charge,”lets shift Cowen “me thinks the bondholders might be thinking”!

Afghan depositors assail bank

Angry Afghan depositors assail bank

Looking at this video clip I am immediately struck with the questions of whether the directors of the Anglo Irish Bank and the other bailed out banks Directors have engaged in shipping off funds to other jurisdictions and what if any investigations have been carried out.
Why are the assets of these corrupt Directors not been frozen?
Must things get a whole lot worse before the Irish public demand action?
Wait until the derivatives bubble bursts then the Sh** will hit the fan!
Big time

Irish banks are still in denial

While all the focus has been on losses at Anglo Irish, the other Irish banks are in denial about the scale of State support needed. It is time to face the facts: the three viable banks need over €17 billion, writes PETER MATHEWS 

LAST WEEK, the scary reports of liabilities at Irish banks centred on the colossal Anglo Irish Bank loan losses, the scale of which I (and other analysts) had been only too aware of more than a year ago. The focus on Anglo Irish was understandable, as far as it went. But the banking sector crisis is not just about Anglo. The Government is missing the bigger picture entirely.

The Irish banking system is analogous to a household’s heating/plumbing system with inter-related boilers. The two big boilers are AIB and Bank of Ireland. There are other smaller boilers, including Anglo and Irish Nationwide, which got really badly damaged by using the wrong fuel and, as a result, they’re now broken beyond repair. The correct decision now is to “stop-cock” Anglo and Irish Nationwide out of the overall system, decommission them and wind them down, in an orderly way, over a period of five to seven years.

AIB and Bank of Ireland (BoI) are the economy’s two heavy duty “main boilers”. Both are now in highly unreliable condition, hissing and spluttering and stopping and starting unpredictably. Both need major refits and servicing. They are severely undercapitalised and poorly directed and managed. Yet both persist in pretending they’re in reasonable shape. They are not. And that’s absolutely the case for BoI, notwithstanding the insistent protests that it is okay because it has more or less raised the capital amount indicated as adequate last March.

But that was last March. And last March’s estimates for both AIB and BoI were not enough. BoI needs €6.5 billion, not €3.65 billion. And AIB needs €10 billion, not €7.4 billion.

The proof goes along the following lines. Gross loans in AIB listed for transfer to the National Asset Management Agency (Nama) totalled €24 billion. A (light) 40 per cent writedown on this figure amounts to €9.6 billion, which should be rounded at €10 billion. We note also that AIB will have to absorb large further losses on its mortgage loan book, its corporate loan book and its SME book and also on its personal lending portfolio. In addition, it may well have uncovered exposures on derivatives. For these reasons, and extensive relevant professional experience, I feel conscience bound to point out that AIB definitely needs recapitalisation now of not less than €10 billion. Furthermore, AIB should not be selling its stakes in Polish and US banks. They are the most profitable, cash-flowing parts of AIB. AIB is only doing this as a panic measure to try and plug its deepening capital shortfall.

Similarly, BoI needs a €6.5 billion recapitalisation. Why €6.5 billion? Because in BoI, the listed loans for transfer to Nama were €16 billion. Apply a 40 per cent write down. This amounts to €6.4 billion, which should be rounded to €6.5 billion. All comments applicable to AIB in the preceding paragraph apply also to BoI.

The Educational Building Society (EBS) also needs recapitalisation of €1 billion to cover its loan losses. Four months ago, the Oireachtas Joint Committee on Finance and the Public Service was advised that the three viable banks, AIB, BoI and EBS, needed immediate capital of €10 billion, €6.5 billion and €1 billion. That’s €17.5 billion in total. The question arises: should the State provide all of this on top of the €7 billion already invested in AIB and BoI in 2009? Clearly not. How much of this €17.5 billion should the State invest? Perhaps €11 billion, in appropriate proportions, into AIB, BoI and EBS.

All of this will result in temporary State nationalisation of these three banks. This leads to another question: where will the €6.5 billion balance come from? The State will be in majority control, at levels in excess of 85 per cent, and able to force existing bondholders in AIB, BoI and EBS to take writedowns on their holdings of bonds, while maybe offering them, say, a small debt-for-equity swap as a sweetener to soften the blow. After, say, five years, the banks will have regained reasonable annual-maintainable normal profit levels in the range €3.5 billion to €4 billion, putting the State in a good position to realise, by way of stock exchange or private sales, its investment of €18 billion in these three banks, plus a profit.

Temporary nationalisation of AIB and BoI will merely formalise the reality that, without 100 per cent State support, both are insolvent. Removal of the State guarantee on deposits at this point would lead to a run on the banks’ deposits. However, we see the banks continuing their delusory charade that they are financially sound and independent!

Realism and optimism are essential for recovery. But optimism must be based on reality. As a country we’re facing a stark reality. Protracted denial in the banking industry, the Government, official Ireland and the professions must stop. Unfortunately, the Fianna Fáil-led Government is responsible for the financial destruction of our economy. Regrettably, the Green Party has collaborated in this destruction. These are the facts. The true situation has been denied by the Government for far too long.

Finally, after two years, only in the last few days have the Minister for Finance, the Government and (some of) the banks been forced to admit the true scale of the destruction. What a waste. What a shame.

So let’s stop the stupid denial. Let’s acknowledge the scale of destruction in the Irish-owned banking sector, not just the Anglo Irish story. AIB and BoI have not been honest with us. Their loan losses are also a shock-and-awe story and they’re only being revealed, on the drip, in drawn-out chapters.

Let’s measure truthfully all the appalling financial damage. Let’s insist AIB and BoI are recapitalised at the truthful, honest, correct and much more robust levels (thereby resulting in temporary nationalisation and bondholder participation through bond writedowns) to enable them to make necessary, much larger, loan-loss provisions than they’ve done to date. Let’s reverse the nonsensical, unwieldy Nama project. This can be done speedily and simply. We’ve got to stop what has become a slow-motion Nama/banks bailout nightmare. Let’s roll up our sleeves and face the challenge. And let’s get on with the work of recovery

source http://www.irishtimes.com/newspaper/opinion/2010/0909/1224278513715.html?via=mr

Comment

This is an excelent articel by PETER MATHEWS 

Early August I posted  my disbelief at the figures the EU stress test results for Allied Irish and Bank of Ireland at the time I stated I thought the figures from the EU were false and were conveniently forgetting some serious hidden derivative losses these corrupt institutions’ were keeping off the book through some fancy  account gimmickry  

My figures were for allied Irish were 10 billion and bank of Ireland, I thought 7 billion or there about .So it is nice to see an independent analyst confirm these figures

Comming over the wires I see headlines say

“Ireland has fallen four places to 29th on the list of global competitiveness and its banking system is the least sound of the 139 countries surveyed, according to the World Economic Forum’s annual rankings.”

now what does that tell you ?

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