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Archive for the ‘Financial issues’ Category

This is an attack on our democracy!

By
SHANE HEGARTY
Irish Times.com

PRESENT TENSE: IN 2004 Allied Irish Banks became embroiled in a furore when it was discovered to have overcharged foreign exchange customers to the tune of many millions.

At the time the figure was put at €14 million (it ended up costing the bank €65 million), and the initial number was enough to make it the lead story for most broadcasters and newspapers. There were rows in the Dáil. The bank’s then chief executive, Michael Buckley, neatly apologised by describing it as an “administrative cock-up”, as if someone had just crossed the wrong T.

On Monday Anglo Irish Bank revealed that its latest half-year losses amounted to roughly the same as it would cost to rent a black hole and throw the country into it. At the same time the bank admitted that it was beginning an internal investigation into the overcharging of customers by as much as €50 million.

A few years ago this would have been a lead story, a match to ignite the parliamentary hot air. This week? It was an addendum, an “and finally . . .”, just another pile of cash to throw on the green-tinged pyre. It seemed, in the grand scheme, almost inconsequential. After all, it would amount to a mere 164th of the total losses – or just over 0.6 per cent. It is a throwback to the days when we were faced with figures we could almost understand. But now it is a pittance. Sure, you’d pay that off in half a generation.

It is a reminder of just how vast the scale of the Anglo money pit now is. How mind boggling. Once again the media rightly spent a good deal of time trying to put the cost into some kind of context – how many space shuttles you could buy, that kind of thing – but there is an argument that no amount of analogies or graphics or football pitches full of imaginary money can ever truly get the scale across to the average brain.

There were figures this week that were comprehensible. Unemployment is at 450,000. In a country of four and a half million that’s a straightforward figure.

One in 20 mortgages is now in arrears; on any average street that can be grasped. One in eight of the workforce without jobs: it’s possible to think of these in personal terms, in groups of friends. You will know some of the people behind those statistics. You may be one of them.

But €8 billion or €25 billion? That’s way past fantasy statistics. It’s a riot of zeros. In fact, there has been occasional discussion about whether reports should always come trailing those zeros, so that the figures become comets burning across the pages. That way the reader would consistently be clobbered by €8,000,000,000 or €25,000,000,000.

But would that get it across any better than the analogies? Or the stats about Anglo’s half-year loss alone representing €2,000 for every woman, man and child in the State? (Which does, oddly, underplay it a little: many credit-card bills are bigger than that.)

We are told that we will be paying for it for the rest of our lives, and that our children will be paying for it too. But in one respect this is nothing new. We’ve been saddled with debt all our lives and are familiar with the idea of paying off sums over long periods of time, either on a national or a domestic scale. A lot of people left the boom with mortgages that will be with them throughout their journey from youth to retirement.

The irony of it, then, is that the head-spinning scale of the cost is so ungraspable that the pain can be appreciated only at the micro level. The Budget will act as a certain shock but will represent the wider hole we’ve found ourself in. A lost job or wiped-out shares will do it, obviously.

But it is tempting to suggest some way in which the particular, unprecedented national trauma inflicted on us by Anglo could be immediately conferred on every individual, so that we might all physically feel the pain of it rather than the dull shock and exhaustion; so that the weight of those zeros is tangible. Someone breaking into your house and stealing a few grand worth of goods. Or every child who sets up a bank account immediately incurring an overdraft of several thousand. Or Seán FitzPatrick just going from door to door with flapping albatrosses attached to millstones, and padlocking them around the neck of everyone, young and old, in the State

Comment:

What can I add that I haven’t said or posted in any one of my own 1500 articles in my blog, on this toxic toilet?
it is to early in the morning to get all worked up but that is exactly what has been happening every morning for the last 18 months. I think it is knowing precisely ,the scale of this fraud that is been perpetrated on us, by all of the people in power and the enormous scale of the debts that Clown and Lenihan have saddled each and every one of us with.
This is an attack on our democracy, our ability to provide for ourselves and our families, our hard won financial independence is now been robbed of us by the imposition of someone else’s massive debts
This fraud is been perpetrated be the very government that is supposed to protect the people and their families under the Irish constitution
The state is in fact robbing people the ability to provide for their own families by imposing the massive debts from corrupt and fraudulent banks and I maintain that the government do not under the constitution have the right to impose such debts on the citizens of Ireland without going to the citizens and having a referendum.
After all they are not only stealing from this generation but the next generation as well
I believe it is the duty of every Irish citizen to revolt against this unconstitutional and thus illegal measure the government has taken without the permission of the people
I do not believe this government, nor any government have the constitutional right to impose fraudulent and corrupt private bank debts on to mine or any other family in the state and I further believe I have the morel and legal right to try and stop them doing so in defence of our family’s financial well being
With this Anglo Bailout and the NAMA legislation we lose one of our fundamental rights guaranteed in the constitution (The protection of the family)
Depressingly we now know that this toxic toiler is spewing out its toxic poison (debts) all over the country like the BP oil disaster in the Gulf, only this is twice as bad and is going to cost us a lot more
Just think of that
At least the Americans were able to force BP to Pay up for their disaster but imagine the American President said that the Government were going to nationalize that oil wellhead and pay off all its debts as well as pay up for the cleanup and loss of business in the Gulf area It would never happen full stop
No the Yanks told BP shareholders you must pay up and no ifs or buts’
Here in Ireland Clown and Lenihan would have gown down on bended knees and kissed BP in the Ass
And nationalized their debts and probably begged them to continue running the show
With the losses announced by Anglo Irish Bank any normal person would have called it a day
When things are as bad as this all sane people would say enough is enough
We simply cannot continue to allow this blatant robbery of the Irish nation’s wealth
We cannot allow this or any other Government to rob us blind and saddle us with the debts of a private bank that is the play thing of the golden circle of this country.
This must be stopped at any cost and the guilty must be made accountable for their monstrous fraud!

Cutting Ireland’s Rating

by Reggie Middleton
So, S&P finally gets around to Cutting Ireland’s Rating on the Cost of Bank Support, as reported by CNBC:
Ireland’s financial headache worsened on Wednesday after Standard & Poor’s cut its credit rating in a move criticized by the country’s debt management agency.
The premium investors demand to hold Ireland’s 10-year bonds over German bunds has been steadily widening in the past few weeks and remained elevated at 327 basis points on Wednesday.
The spread finished at 330 bps on Tuesday, its highest level since the Greek financial crisis broke in May.
Brenda Kelly, an analyst at CMC Markets, said she expected Irish borrowing costs to climb on the back of S&P’s move.
“I think we are going to have to an awful lot more in interest payments,” she said.
Although Ireland has raised virtually all of the 20 billion euros of long-term debt targeted for 2010, S&P’s move may make it more difficult for the country’s banks to extend the maturity of their funding later this year and eventually wean themselves off a state guarantee on their debt.
S&P cut Ireland’s long-term rating by one notch to ‘AA-’, the fourth highest investment grade, and assigned the country a negative outlook late on Tuesday saying the cost to the government of supporting the financial sector had increased significantly.
Rating agencies have been steadily hacking away at Ireland’s credit rating and S&P’s is now on a par with Fitch and one notch below Moody’s, which cut its rating to Aa2 last month.
S&P said it expects Ireland will need to spend 90 billion euros to support its banking system, up from its prior estimate of 80 billion euros including capital used to improve the solvency of financial institutions and losses taken from loans the government acquired from banks.
Ireland’s budget deficit ballooned to 14 percent of gross domestic product, the highest in Europe, last year due to the cost of propping up nationalized lender Anglo Irish ANGIB.UL and it could climb higher if Dublin injects an additional 10.05 billion euros into the bank…
I’m not going to say I told you so, but I did throw some pretty strong hints…
On April 29th, I was quite blatant in stating “Beware of the Potential Irish Ponzi Scheme!”, urging my susbscribers to review the Irish Bank Strategy Note and the Ireland public finances projections that I made available earlier that month. You see, unlike many of the pundits in Europe who state that Ireland has moved beyond the worst of its problems and is an example of how austerity should work, I believe that Ireland is in very, very big trouble and I outlined the reasoning behind such in my very first posts on the Pan-European Sovereign Debt Crisis.

At the very beginning of the year, I visually illustrated how bad off Ireland was, with considerably more that 6% of its GDP being mired in bank NPAs (non-performing assets). This number is quite conservative, for my research team only canvassed the larger banks in Ireland – you can rest assured that the smaller ones contain a similar (if not greater) proportion of NPAs to total assets. Add to this the fact that these banks are probably overstating assets and understating liabilities and you can probably throw another 150 basis points on top of the figures above and still be a tad bit conservative.
As a matter of fact, I went further into the topic in mid-April with Many Institutions Believe Ireland To Be A Model of Austerity Implementation But the Facts Beg to Differ! where I showed that Ireland is heavily leveraged into the problems of the PIIGS group faced. A picture (and/or graph is worth a thousand words! From the afore-linked post…
So if Ireland is really that bad off, what’s up with that tall stalk next to it in the bank NPA chart at the beginning of the post? Oh, those are the guys (and gals) who lent Ireland all of that money, and Ireland’s issues are probably a significant portion of those NPAs you see towering over that of Ireland. I am not picking on Ireland and the UK, for much of Europe suffers from similar anathema,.
It is not as if no one could see the Euro-bank issues coming. In January of 2009, I explained to readers that the real estate bust in Spain could not be avoided by the banks and there will be a time when the piper comes a callin’ This, of course, will be subsidized by the Spanish state,. This didn’t just start with Greece,
So what does it all mean?
Well, from my point of view, things rarely happen in a vacuum. Many European nations are over leveraged, overbanked, highly indebted, social powder kegs literally and economically sitting right next to each other. Lord forbid someone inadvertently lights a match! Whether that match is of financial or economic origin a very unpleasant domino effect will ensure.

Reggie’s analyzes is spot on and a must read for all serious citizens who want to get the real facts on our countries financial situation and not the spin coming from an increasingly out of touch government

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

watch out get rich quick merchants about!

Don’t become a victim of investment fraud
With the economy the way it is, beware of get rich quick merchants
Before you hand out your money to someone to invest for you should look at this video first

http://www.accelacast.com/programs/nfa_inv/

Stock Watch

Stock Watch

Citigroup (NYSE: C) kept its place as the most shorted stock on US exchanges with a position of 449.8 million shares, up slightly from the June 30 figure.

Read more: Short Sellers Move Back Into Banks, Tech – 24/7 Wall St. http://247wallst.com/2010/07/27/short-sellers-move-back-into-banks-tech/#ixzz0usxJ8pIr

 comment

I am a buyer of this stock as I believe this stock will vastly outperform in the coming months

A good buy position will be in the 3.50 $ area (On pullbacks)

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