Archive for February 9th, 2010

By the end of February 2010 (probably)

Whilst we knew that there had been a slippage of at least a couple of months in the first payment (was scheduled for pre-Christmas 2009, now estimated to be Feb/March) we are still unclear about what exactly is going on. It feels as if we are living in a totalitarian society where we will be informed suddenly one day that €20bn has been irrevocably paid out in our name.

NCB Stockbrokers said yesterday (how they claim to know is not clear) that the first loans totalling €19bn (presumed to be gross, so after the 30-40% haircut that’ll be €11-13bn of our money) should be bought by NAMA by the end of February 2010. However the firm cites problems with administration of the process (perhaps a reference to rumours that the securitization of some of the loans is unclear with first, second and more charges over the same asset) and the fact that the banks haven’t yet been presented with NAMA’s valuations yet (after which the banks would have a week to contest the valuations which would lead to further delays), both as reasons why the first transfer may not happen until the end of this month.

Remember Brian Lenihan last week indicated all was well with the process and the first loans would be transferred by the end of February? How the EU’s consideration of approval of the scheme and FG senator, Eugene Regan’s complaint will affect any schedule is unclear – most are saying EU approval is a formality and Senator Regan’s complaint will be summarily dismissed (a pity as he cites the four most common concerns about NAMA –

1. lack of transparency

2. flawed valuation methodology

3. no guarantee of credit flows from banks

4. inadequate burden-sharing between the banks and the taxpayer

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Whilst yesterday’s news of an IT investigation using Freedom of Information procedures to uncover doubts by the IMF over the effectiveness of NAMA in restoring lending was overshadowed by the soap opera that is George Lee resigning as TD and giving a big F-you to his party by resigning from the party as well, two later counterpoints to the IT story were largely ignored:

Taoiseach Brian Cowen dismissed the IT story stating it was a year old “This morning there was some talk about what happened 10 months ago at a meeting,” he said.”The fact of the matter is people should contemplate what level of credit accessibility we would have in this economy without NAMA.”

The IMF yesterday told the Irish Independent that it continued to support the agency. “The fund has always been supportive of the creation and implementation of NAMA and the authorities’ efforts to press ahead with supportive regulatory and supervisory measures to help manage the current stress and lower the risk of future crisis,” The IMF have not issued a formal statement to rebut the claims by the IT that the IMF had doubts that NAMA would restore credit in the State.

Is it too much to ask that our media pursue the matter and ask the IMF to explain the disconnect between the uncovered statement from 10 months ago and its apparent support today. Of course if there was an effective Opposition holding the administration to account they would be asking the question also but they are more distracted with their own soap opera.

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