Flicking through the recent developments on NAMA one is reminded of South Park's underpants gnomes experience. These little fellows invaded South Park to collect underpants to their underground lair in the all encompasing task of raising a profit. The only caveat was how to get there. NAMA is leading the way to these industrious little fuckers and damned if they don't wear suits instead of pointy hats.
Here's is the underpants gnome logic as illustrated: Step one: collect underpants, Step two: ? Step three: PROFIT. Nice..............
Here is the NAMA business plan: Step one collect pants loans, Step two: ? Step three: PROFIT. Nice....................
Now here are the recent development with the banks, the proven financial whores and tinkers. NAMA as referred to in my previous posts did not even bother to audit the loan files before suggesting their billion euro purchase scheme and then, shock horror, were "flabbergasted" at the state of the loan files. The same bank, Anglo, that 8 days before they went into financial meltdown had the gall to make a presentation to the department of finance that they were in the best shape of their financial lives misrepresented the loan book- wow, who would have thunk it.
The newest unreported development is that the banks liquidated the majority of their performing "good" loans before they were transported to NAMA. Hense NAMA is mopping up the junk. The crap that is so toxic that even the underpants gnomes want no part in it and here's the fun bit. NAMA is applying a discount based on the long term vitality of these loans. The logic of the discount is simply this, "Okay Mr. Bank, some good, some bad, so we'll take them off your hands at a discount for the useless ones, cash in the good ones and we'll work out even. Cheers". The result of the banks flaking on transferring the performing loans means that we are giving a discount, albeit a higher one than envisioned on the basis that there are performing loans which no longer exist, and as any third class mathamatician would tell you, you can multipy zero by any number of years and it still is zero.
So what's the alternative. Well it's quite simply. Screw the premium, transfer the loans at their current net book value. NAMA will be lucky if they files don't catch fire on the way over. If there is any return, yipee for the taxpayer. Remember him, the dude that bailed Anglo out to the tune of 20 odd billion and rising. And while we are at it, why don't we just nationalise the bloody banks while we are at it. Every foreign bank has pulled out of the Irish market when they realised that the Irish government was propping up it's pet banks when they failed. The stock is worthless, AIB and BOI could be merged and the fact that they both have a premises in practically every provincial town leaves a lot of surplus premises that could conceivable be sold off. You don't need a firesale that would deflate the price, heck convert the buildings to apartments and stick social housing in there. Ah social housing. Remember that old trick. Times were that you needed to include 20% social housing in every new development but hey we don't want to be living next to poor people, those nurses and teachers and minions that earn less than 55K per year do we, so what did our lovely government do- allowed developers to literally buy their way out of these provisions by making financial contributions to the local authorities. What a wonderful way to avoid social responsibilities and have a convenient financial stream for bribes to be explained away, but that wouldn't happen now would it...........................
