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Should the transfer of Anglo’s remaining NAMA tranches be put on hold ?

from source http://namawinelake.wordpress.com/author/namawinelake/

Should the transfer of Anglo’s remaining NAMA tranches be put on hold pending clarification of Anglo’s total costs?
namawinelake | August 27, 2010 at 10:15 am
Anglo has transferred a cumulative total of €16bn of its NAMA-bound loans in tranches 1 and 2, leaving an estimated €20bn in its remaining tranches if the estimates in NAMA’s revised Business Plan and accompanying tranche 2 detail are correct (what introduces some doubt is the claim two weeks ago by the Anglo CEO Mike Aynsley that €2-4bn of NAMA-bound loans in the UK and US may be “reclassified” in agreement with NAMA).
If tranches 1 and 2 are anything to go by, NAMA will in future pay Anglo a Long Term Economic Value (LEV) premium of 10-12% of the current market value of the loans. So if €20bn is still valid as the face value of the remaining Anglo loans and they have a current market value of 45% of their face value, then NAMA will be paying €0.9-1.1bn above the current market value of the loans. That is a substantial sum of money to be gifting a bank whose future is being debated as we speak at the EU with a European preliminary view on the future of Anglo due in weeks.
The perpetual murmurs of disquiet about Anglo have grown substantially in volume this week. Standard and Poor’s downgrade of Ireland’s credit rating was predicated in part on their assessment of the increased cost of bailing out Anglo at €35bn. Last week in Beijing the Governor of the Central Bank broke the news that “Anglo may impose a NET [my emphasis] cost to the Government of about €22-€25 billion”. A net cost of course could be a gross cost of €35bn with €10bn recouped over time (eg through sale of a government stake in Anglo’s Newbank, redemption of NAMA bonds at face value rather than the accounting value which might assume a large discount). Trinity College economics professor Constantin Gurdgiev repeated his view that Anglo could incur losses of “€33bn in mid-range case, rising to €38.6bn in the worst case scenario”. It is not clear if these losses equate to a net cost to the State as there may already be provisions for these losses and Anglo has a (small) capital base. Today in the Irish Times, former Ulster Bank chief economist Pat McArdle suggests that, in an attempt to improve Ireland’s credit rating “we could try to give greater certainty regarding the Anglo bailout cost, possibly by postponing all other transfers to Nama until Anglo is taken care of.” Other calls this week came from the domestic politics (FG’s Finance spokesman, Michael Noonan calling for a debate at balance sheet level to assess the different options for Anglo) and the Financial Times editorial which today says “it is time to staunch the bleeding. As Irish state guarantees near their expiry date, some banks will not be able to refinance their balances. The government should prepare insolvent banks for forced debt-for-equity swaps, which would instantly recapitalise the banks in question and cap the government’s exposure”. This blog has expressed concerns about the non-NAMA losses at Anglo and whether these are being realistically assessed at present.
Last weekend NAMA paid Anglo a LEV premium of €270m on its latest tranche of loans, a considerable gifted sum in normal times but small in comparison with the expected €1bn of LEV premiums on the remainder of Anglo’s NAMA loan book. Has the tipping point now come whereby Anglo’s future is consensually decided (consensus impedes speed of action but the sums involved have grown to state of war proportions for the Irish state)? And until Anglo’s costs are clarified, should NAMA put the transfer of future loans on hold as these future transfers will involve the State paying substantial sums in excess of the true value of the loans.

Comment:

We did not have to wait for the past 18 months to expire to suddenly find out that NAMA was going to end up paying way over the odds for the various toxic assets from the Banks, never mind the Crap it was getting from ANGLO IRISH BANK
The simple fact is that from the start we the ordinary Joe soaps could smell that a sweetheart deal has been done by the Fianna Fail Government with the establishment of what is now openly been acknowledged as the largest bail out in Irish corporate history and all for the benefit for the golden circle, the chosen few, the cronies and leaches and hangers-on of the Fianna Fail party

This is now seen as a fraudulent transfer of wealth from the citizens of Ireland to a group of irresponsible gamblers, with the help of economic traitors within the government and a totally incompetent regulatory authority that at this stage one must ask if it was designed to be so, in order to facilitate this fraud in the first place !

It is the duty of every citizen to make sure that the next tranche 3 of toxic loans from Anglo-Irish Bank should not take place and indeed an independent international enquire should be set up to investigate exactly who were the beneficiaries of the billions that have already gone into this toxic Toilet, who was responsible for the approval ludicrous high valuations put on these worthless toxic assets and whether there was a conflict of interest at any level
The Fraudulent actions of Government ministers to be exposed and all individuals brought before the courts and jailed on convictions, no golden handshakes or beefed up pensions to be paid out to any individuals found to have felicitated in the cover-up of fraudulent actions or helped to hide relevant information that would have expose this monstrous fraud on the Irish taxpayers
This continued drip ,drip feed of lies must be stopped and the truth must be put before the people
In the form of a general election or a referendum on the issue
I call on all the opposition parties to declare that they will not honour any of the fraudulent guarantees given to the international bondholders by way of an extended government guarantee given in the first place without the consent of the Irish people
I dispute the authority of any government to place me and the hundreds of thousands of its citizens into a kind of financial enslavement to corrupt financial institutions that then are enabled to legally rob me of my family home, my savings, and my prosperity as a consequence of their corrupt practices.
As a result of the establishment of NAMA the countries financial institutions have effectively sucked dry the financial resources of the country for the next generation.
Thus robbing me and the majority of the countries citizens the necessary means to independently provide for their family’s and so forcing families to become dependent on the state for handouts
These actions are a clear breach of the rights guaranteed to every citizen of Ireland by the Irish constitution (see PDF Here Constitution of Ireland) and so renders the establishment of NAMA illegal without first haven put it to a referendum to the citizens of Ireland
Please stand up for our constitutional rights , get active and  put an end to this  madness

New reserve currency

This is big trouble for the USA
WASHINGTON (AP) — Regulators on Friday shut down a Nevada bank, raising to 83 the number of U.S. bank failures this year.
The 83 closures so far this year is more than double the pace set in all of 2009, which was itself a brisk year for shutdowns. By this time last year, regulators had closed 40 banks. The pace has accelerated as banks’ losses mount on loans made for commercial property and development.

The Federal Deposit Insurance Corp. took over Nevada Security Bank, based in Reno, with $480.3 million in assets and $479.8 million in deposits. Umpqua Bank, based in Roseburg, Ore., agreed to assume the assets and deposits of the failed bank.
New reserve currency
We in Ireland are still bailing out bankrupt banks at the cost billions we don’t have causing economic depression for this and the next generation!
With 52 thousand students coming out of our universities and no jobs to go to
alone along with 100,000 people all ready left the country ,and another 53 thousand students leaving secondary education this year
How many of them are going into apprenticeships, jobs or is it emigration for the majority for them
The Unelected Cowen and his band of economic terrorists are helping the top bankers of the state live it up while the rest of us struggle to pay our monthly bills
I say let the bankrupt banks pay their own bills and allow them to fail, just like the Americans are doing in the land of Free markets
Allowing the crooks in the Dail to plunder our natural resources and the wealth of future generations is a crime I personally do not want to be responsible for, when our children ask what you did to prevent it I can show I was active in my opposition and I made a stand
What can you say you did??
It is the responsibility of each and every one of us to oppose this band of thieves we must stand up and take action
Do not just stand by and allow our country to be destroyed by the current government who have sold out to the faceless bondholders in Germany , France and England
Stand up and Fight back now!
Put yourself up for election do not give you vote to any of the current TD’s
We need new blood in the Dail and not Family dynasties
We want a general election now and we need a new community party made up of new local people from ordinary backgrounds that will work for an average wage and not clock up huge self given perks, ending up as millionaires while the rest of us struggle to pay for these perks & pensions
We need real servants of the people and not leach’s sucking the rest of us dry like some of the current shower of TD’s are doing
The next general election must end Gombeenisem for good.
Promise yourself this and we just might save Ireland!

David Mc Williams in his latest posting Memo to ECB: print money

David Mc Williams in his latest posting Memo to ECB: print money

Highlights the conundrum the Germans now find themselves in!


As the paymasters of Europe, they are not happy in this unforeseen roll and the opposition in Germany is growing as we see with the loss of North Rhine-Westphalia see article here

In last week’s elections in Germany, by the ruling party of Angela Merkel.

Where this leaves the Euro is another question, I think too much has been invested in the Euro enterprise, so much so that I don’t expect to see the Germans just ditch it anytime soon!

The latest support package for the beleaguered Euro is testimony to the fight the Germanys are still prepared to put up, to save their investment in the single currency.

But what have the Europeans really agreed to?

From here it looks like a giant NAMA solution! Yes we have arrived at the unthinkable, a NAMA for Europe .this of course is just as bad if not even worse that our own Irish NAMA ,but with much worse consequences. All over the air waves to-day we hear that the Euro has been saved and the markets initial reaction is positive but the markets are prone to swing at a moment’s notice and I would not put faith in any initial reaction.

Where are all these billions going to come from and what is the Irish government’s contribution going to be now ,from my estimates we could be asked to stump up 5,000.000.000 billion. (Under the loan package, euro-area governments pledged 440 billion euros in loans or guarantees, with 60 billion euros more in loans from the EU’s budget and as much as 250 billion euros from the International Monetary Fund.)

Where are we going to get this kind of money? Am I the only party pooper?

Surely spending this sort of money replicates the reckless actions that got us here in the first place!

Someone somewhere is going to ask the question what are we going to have to do the get this money? Give up more sovereignty, in the form of a new Lisbon 3 referendum.

Either way this is not good news and this will dawn on the people of Europe in the coming months!

Just think if NAMA is bad for Ireland ,then Euro NAMA cannot be good for Europe !

Unless the Germans start to experience real pain, and their economy starts to go into depression ,and they then come on to the streets, I expect that things will die down and we will see perhaps new attention been brought on to the dollar again! Why? Because the Americans are much further down the road with their printing presses, and the American Jumbo Debt comes to focus on the world stage again!

The thing about debt is that it has to be faced up to at some stage !


 

 

Lies, Damn Lies, and Sovereign Truths: Why the Euro is Destined to Collapse!

If this article goes viral around the web, I wouldn’t be surprised if the euro tanks and several European sovereign states’ spreads blow out. I have busted several of them in another of a long series of “creative” economic forecasting schemes to fudge the appearance of “austerity”. 

Well, its official (sort of). Greece, a Greek Crisis Is Over, Region Safe”, Prodi Says – I say Liar, Liar, Pants on Fire!member of the European Union, will probably join the ranks of countries like Latvia (where policies are limited by the choice of the currency regime), Iceland (where the crisis has resulted in a very heavy external debt burden), the Ukraine (which is still affected by financial and political fragility) and a bevy of third world and emerging market countries in distress from the (not very) esteemed club of IMF financial aid recipients. What does this portend for the Euro? Well, I have blogged earlier in the year that the Euro’s credibility is now highly suspect and those pundits who dared contemplate the Euro potentially replacing the dollar as the global reserve currency now see the folly of their ways. The chances of a break-up are significantly higher and quite realistic. Credit Agricole’s currency strategist puts it succinctly:

“If Greece goes with the IMF, that says something terrible about the political process within Europe,” said Stuart Bennett, a senior foreign-exchange strategist at Credit Agricole Corporate and Investment Bank in London. “This undermines any confidence in the currency.”

Greece will probably end up defaulting on their debt, with or without the aid of the IMF, and they will probably have good company with several other EU members. I say so, and so does UBS Economist Donovan.

“I think it’s in an impossible situation,” said Donovan, who is based in London, in an interview with Bloomberg Radio today. “Europe has failed to clear its first serious hurdle. If Europe can’t solve a small problem like this, how on earth is it going to solve the larger problem, which is the euro doesn’t work. It’s a bad idea.”

How dare I make such a proclamation? Well, because I am telling the truth based upon facts and the many forecasts from the various sovereign nations are basically based upon lies, fiction and farce! As it is look at how the market is viewing the Greek tragedy:

European governments have yet to agree on how to fund any rescue for Greece, which says it will struggle to pay its debts at current market interest rates. While Prime Minister George Papandreou announced a 4.8 billion euro ($6.4 billion) austerity package on March 3, the extra yield that investors demand to hold Greek debt over German counterparts has since risen.

The spread was at 324 basis points today compared with 316 points at the start of the month. The euro fell 1 percent today to $1.3358, extending its decline this year to 6.7 percent.

I am willing to bet the “market” has not taken a strong, hard, objective look at those proposed austerity measures and uncovered the secrets that I am about to reveal. If they have, these spreads would have been blown out much wider. 

A German finance official said yesterday that both countries may agree to involve the IMF. Papandreou said March 19 that Greece, which needs to sell about 10 billion euros ($13.4 billion) of bonds in coming weeks, is a step away from not being able to borrow and may need to turn to the IMF if European aid isn’t forthcoming.

Europe’s fiscal crisis shows the need for the euro region to create a common fiscal policy, former U.K. Chancellor of the Exchequer Norman Lamont said in an interview in London today.

“That would be the logical step,” Lamont said. “I don’t think they are prepared to do that, and without doing that I think the euro is a contradiction, a currency without a state.”

Bingo! The man hit the point right on the head. There are too many chiefs and not enough Indians.

I want to visually and verbally demonstrate what an absolute joke European economic estimates have been throughout this crisis, and more importantly how politicians and sovereign states are interpreting this joke in such a way that can deliver a punch line that can most assuredly end in sever global recession, or worse. This document/blog post alone should serve to sink the Euro and blow out CDS spreads for several European sovereign. Why? Because the truth hurts and the truth is not what has been coming from European sovereign states as of late.

The IMF and the EU have been consistently and overtly optimistic from the very beginning of this crisis. Their numbers have been dramatically over the top on the super bright, this will end pretty, rosy scenario side – and that is after multiple revisions to the downside!!! We can visit the US concept of regulatory capture (see How Regulatory Capture Turns Doo Doo Deadly  and Lehman Brothers Dies While Getting Away with Murder: Regulatory Capture at its Best) for the EU, but due to time constraints we will save that topic for a later date. To make matters even worse, the sovereign states have taken these dramatically optimistic and proven unrealistic projections and have made even more optimistic and dramatically unrealistic projections on top of those in order to create the illusion of a workable “austerity” plan when in reality there is no way in hell the stated and published plans will come anywhere near reducing the debts and deficits as advertised – No Way in Hell (Hades/Tartarus/Anao/Uffern/Peklo/Niffliehem – just to cover some of the Euro states caught fudging the numbers)!

Let’s take a visual perusal of what I am talking about, focusing on those sovereign nations that I have covered thus far.


Notice how dramatically off the market the IMF has been, skewered HEAVILY to the optimistic side.  Now, notice how aggressively the IMF has downwardly revsied their forecasts to still end up widlly optimistic.

Ever since the beginning of this crisis, IMF estimates of government balance have been just as bad…


The EU/EC has proven to be no better, and if anything is arguably worse!

 
 

 

Revisions-R-US!


and the EU on goverment balance??? Way, way, way off. 


If the IMF was wrong, what in the world does that make the EC/EU?

The EC forecasts have been just as bad, if not much, much worse in nearly all of the forecasting scenarios we presented. Hey, if you think tha’s bad, try taking a look at what the govenment of Greece has done with these fairy tale forecasts, as excerpted from the blog post


Think about it! With a .5% revisions, the EC was still 3 full points to the optimistic side on GDP, that puts the possibility of Greek  government forecasts, which are much more optimistic than both the EU and the slightly more stringent but still mostly erroneous IMF numbers, being anywhere near realistic somewhere between zero and no way in hell (tartarus, hades, purgatory…).

Now, if the Greek government’s macroeconomic assumptions are overstated when compared with EU estimates, and the EU estimates are overstated when compared to the IMF estimates, and the IMF estimates are overstated when compared to reality…. Just who the hell can you trust these days???

 source link http://boombustblog.com/reggie-middleton/2010/03/14/qgreek-crisis-is-over-region-safeq-prodi-says-i-say-liar-liar-pants-on-fire/
 

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