So concludes another year on the NAMA wine lake blog – 920 blogposts, 7,900 blog followers, 7,000 comments and according to the people at WordPress which hosts the blog, it “was viewed about 1,800,000 times in 2012. If it were Liechtenstein, it would take about 33 years for that many people to see it. Your blog had more visits than a small country in Europe!” – the Yanks! Liechtenstein is a very, very small country in Europe, though more pertinently, it was viewed an average of 35,000 times a week and that excludes viewers who rely on emailed blogposts. The overwhelming majority of the audience is based in Ireland, though the UK and the USA also feature in audience statistics.
A far larger number of comments, about 300, were deleted in 2012 than in 2011, with a notable new phenomenon of bogus comments using apparently real names with content which is potentially defamatory, but 2012 again also saw small numbers with excessively bad language or which were just plain nonsensical, but unlike 2011, when five commenters were permanently blocked no commenter was blocked in 2012.
Most of the blogposts in 2012 were straightforward reporting of facts pertinent to NAMA – “monitor journalism” as the professionals would call it. There was a new “Of the Week” feature which brought you some amusing – hopefully! – commentary and opinion on economics and politics and other falderal. There was usually a weekly political slot which, given the constant intrusion of politics into practically all aspects of the Irish economy, seemed appropriate. Some blogposts required quite a lot of research and as we conclude 2012, these are four extracted from the conveyor belt to be given extra prominence for the year just expired.
One-stop Trough – political pay and perks in the Oireachtas. When researching this blogpost, it was amazing to find that no other media had previously done this work, or if it had, it wasn’t apparently available. The Irish Times did a piece later in 2012, but it was a little sad that it should be a blog that should reveal the workings of the Oireachtas “One Stop Shop” and set out in detail just how much TDs and senators were costing us – in the overall scheme of things, not a significant sum but in current circumstances, emblematically unacceptable. RTE’s political correspondent, David Davin Power tweeted that he was unfollowing the blog mid-way through the three part blogpost because it had become “an anti politics rant” but as the year ends, and in line with keeping political commitments generally, David remains a follower. The research undertaken to produce the blogpost involved ploughing through parliamentary questions, examining the “One Stop Shop” literature, consulting with pension experts, research of the Oireachtas website and examining very limited historical press reporting. As far as I can see, it remains the most comprehensive publicly available record of what we pay politicians.
Bank control of Irish hotels – NAMA and NAMA banks in particular have extended their tentacles deeply into the Irish hotel sector, which is not surprising, given the number of new developments during the 2000s and the leveraging of hotel assets for further development. It emerged that at least one in six Irish hotel rooms was controlled by a bank, and that most of these were now NAMA loans or loans controlled by NAMA banks. NAMA might tell you that its role in the hotel sector is overplayed and that other banks, Ulster for example, are more dominant, but this research showed the scale of NAMA’s control of the sector, and given that we learned through the Comptroller and Auditor General’s report that it is the NAMA strategy to “hold” hotels until the second half of the decade, this control is set to continue for some years. The two-part blogpost involved considerable research because there is no one central register of hotels to which receivers have been appointed or which show other evidence of bank control, short of receivership. It was a potentially dangerous blogpost given the possibility of errors which might damage a business, but in the end, there was just one adjustment where one hotel was unhappy with the interpretation of wording in the annual report and accounts.
NAMA’s finances – the core remit of the blog is to monitor NAMA, Ireland’s biggest state agency and one of the bigger property companies in the world – nowhere near the biggest when you consider asset management companies in which real estate is a main investment area. NAMA’s quarterly reporting, its appearances at Oireachtas committees four times in 2012, relevant parliamentary questions, NAMA statements and other media reporting are all monitored to keep tabs on NAMA’s financial performance. A recurring theme was the manner in which NAMA muddies the waters with its accounting which may be optimistic as regards interest income but may be restrained in recognizing certain profits on debtor connections which continue after one loan is resolved. When NAMA trumped a quarter billion profit for 2011 when it published its annual report in July 2012, there was an immediate – within 15 minutes – assessment on here that NAMA had used controversial tax credits to boost a pre-tax profit from €12m to €247m. But it was the admission by Minister for Social Protection Joan Burton on RTE radio that NAMA faced losses of up to €15bn that is picked out here as indicative of that close monitoring. Minister Burton used the words – “Not counting, by the way, another €30 billion that we’ve committed on NAMA, at least half of which we will get back”. NAMA immediately contacted the Minister after the blogpost was published and there was a mealy mouthed retraction the following week, but the Minister had let the cat out of the bag – NAMA does indeed face making a substantial loss if any growth in Irish property prices is insufficient to cover the Agency’s operating costs and interest.
Bank debt negotiations – as we conclude 2012, there is a prospect of a small face-saving adjustment to the terms of the Anglo promissory note which will have little or no overall impact on the national debt which was in part run up to a level approaching 125% of GDP, as a result of the banking sector rescue. We have a weak hand when it comes to these negotiations, we are a bit player in a vast EuroZone which supports our banks still with massive lending, we ourselves adopted the guarantee in September 2008 and the extent of our guarantee rankled with our partners in Europe. But we are in the teeth of historic negotiations and since we have to a large extent paid off the bondholders – though there are still billions outstanding including €2.7bn at PTSB in early 2013 – the Anglo promissory note is really the significant game because we have some scope for unilateral action. The blogpost tried to place the current negotiations in an historical context of our negotiations of the Border in 1920-1925, negotiations in which Ireland utterly failed for a variety of reasons which resonate with the bank debt negotiations in the present day. The blogpost relied on a personal area of interest – Ireland in the second two decades of the last century – and tried to provide a new perspective, and especially one which suggested history was repeating itself and we could learn from our past mistakes.
NAMA Wine Lake 
Thank you NWL for excellent analysis and commentary on key economic and political issues during the past year.
One area I would love to see some analysis on next year is benchmarking our public sector spending and outputs in key areas against other small countries such as Denmark,Finland and New Zealand.
It would remove some of the emotion from the arguments if we had some decent comparisons of what we are getting for our supposed high levels of spending in areas such as health,welfare and overall public administartion.
@Tom
You might like to read section 4.2+ of the 44th (2009) report of the Review Body on Higher Remuneration at http://www.reviewbody.gov.ie/Documents/Report%2044.pdf
It clearly indicates that salaries for (almost) all top level posts in the Irish public service are away ahead of those in other countries.It then goes to the trouble of undermining this finding by adjusting pay levels to take account of income tax and purchasing power differentials to, very conveniently, deflate the Irish pay levels and thereby ignore issues relating to (un)competitiveness. Of course, the true cost of the Irish pensions was ignored.
Here is what the Chairman of the Body said:
“Our investigations revealed that, across a range of EU countries of varying size, pay for the most senior levels, namely, prime ministers, government ministers and administrative heads of ministries was, generally speaking, substantially below the rates prevailing in Ireland. This gap was less pronounced when income was adjusted to include the value of benefits and to reflect differences in income tax and relative purchasing power between countries. No precise explanation for the difference in pay between Ireland and its selected peer countries was forthcoming, other than that comparison with the private sector rates for equivalent jobs has been a much more significant factor in Ireland than in the other countries.”
I would have thought that the Golden Rule (“he who has all the gold makes all the rules”) plus selfishness and greed might be part of the explanation.
Thanks NWL for a most interesting blog and a Happy (if not necessarily Prosperous) New Year to all.
NWL, you’re a 21st century patriot. Happy New year.
NWL read you every day, thanks. Happy New Year
Cheers NWL. I don’t know where you find the time.
Happy New Year, NWL. And also to all who post here. The discussion has always been an informative, enjoyable – and challenging experience. Thank you for providing the thought provoking opinion and the forum. I look forward to an interesting 2013! :-)
@NWL
Well done on what must be a formidable task.
But let me take issue with one small but important item of phraseology of in your post above re the EZ/ECB ;
“we are a bit player in a vast EuroZone which supports our banks still with massive lending,”
Like many, if not all, reporters you seem to be buying into the ECB /EZ ‘supporting our banks’ narrative. The language here is important, as the ‘support’ message has been the main theme of the EU institutions since this crisis began. But we all know too well, who the ECB /EZ were really supporting (EU bank bondholders), and that to a large extent is the reason why ‘Irish’ banks need ‘support’.
There are a number of issues with this, but in general terms the accepted narrative is that capital is free to move where it will, but resulting capital deficits are a matter for each country to ‘resolve’, by deleveraging (firesales of assets and restricted to zero lending) and destroying their economies, with their hands completely tied behind their backs in terms of capital controls.
More specifically the accepted narrative ignores many points:
Firstly, the ECB ‘supports’ many banks in EZ countries , through 3 year LTRO funds. In that sense Irish banks are little different from many other banks.
The second issue is why identify banks with the State. Indeed that has been at the root of all our problems, to such an extent that the banks are largely owned by the State, and more to the point their losses have been foisted onto the State. Even more again to the point, the State appears to have accepted unto itself an almost sacred duty to recapitalise the banks to some arbitrary EZ / investor feel good level, depriving a starving economy of much needed funds.
Thirdly, the ECB is merely replacing funds that have fled Ireland to other European banks. The ECB could decide not to do so and this would require Ireland to impose capital controls. In fact this is the most fundamental point of all. Without the ECB acting fully as a LOLR (without the pejorative addict lectures), and without a national or EZ bank resolution scheme, capital controls should be an accepted and necessary tool of all EZ governments.
Belatedly I want to thank NWL for this invaluable Blog. The content of this Blog and the comments/discussions are a great resource and they show that at least some of our fellow citizens are interested in ascertaining the facts and the issues behind the facts. Thanks for the great input NWL and thanks also to the contributors through their comments. Keep up the good work!