Use of "bailout" word in NAMA debate

[InReality]

I'm trying to figure out what NAMA is and why some people insist NAMA is not a bailout to developers.

Point 1)
Without NAMA developers loans would be liquidated quickly and they would face huge losses & poss bankrupcy in the short term.

Point 2)
With NAMA developers loans will still have to be repaid
but over a longer term. There are also mechanisms in NAMA to keep developments going in order to get as much of the loan repaid as possible.
Both of these measure mean that developers face much reduced risks of losses and bankrupcy.

So ..

Is point 1) correct ?
Is point 2) correct ?

If point 2) is correct then aren't developers getting a significant benifit from NAMA ?

While its not a cash transfer to developers , i.e. classical type of bailout , does it not help them in the same way ?

[ivnryn]

While its not a cash transfer to developers , i.e. classical type of bailout , does it not help them in the same way ?

Ultimately, it is a payment of money to the banks.

It is like you go to a casino and you get to keep any winnings, but the tax payers pay for any losses.

The banks knew that there was a good chance they would be bailed out, so they took more risks than appropriate. This benefitted the developers who managed to get larger loans than they would otherwise get.

Developers who made the right bets get to keep their winnings. The ones who didn't are banktupt in the end one way or other. However, FF plans to pay them to complete their half finished developments.

[Watcher1]

I'm trying to figure out what NAMA is and why some people insist NAMA is not a bailout to developers.

Point 1)
Without NAMA developers loans would be liquidated quickly and they would face huge losses & poss bankrupcy in the short term.

Point 2)
With NAMA developers loans will still have to be repaid
but over a longer term. There are also mechanisms in NAMA to keep developments going in order to get as much of the loan repaid as possible.
Both of these measure mean that developers face much reduced risks of losses and bankrupcy.

So ..

Is point 1) correct ?
Is point 2) correct ?

If point 2) is correct then aren't developers getting a significant benifit from NAMA ?

While its not a cash transfer to developers , i.e. classical type of bailout , does it not help them in the same way ?

What the government say is that the builders will owe NAMA and not the banks and the same rules will apply. The real question is...do you believe them?

[Mitsui]

...If point 2) is correct then aren't developers getting a significant benifit from NAMA ?

While its not a cash transfer to developers , i.e. classical type of bailout , does it not help them in the same way ?

Is that a little lightbulb I see flashing on above your head?

And that's before you even factor in the bit where some legal technicality turns up later that makes it impossible for NAMA to pursue defaulting developers for their assets.

[Hal]

What the government say is that the builders will owe NAMA and not the banks and the same rules will apply. The real question is...do you believe them?

Only post here with any truth in it.

[SPN]

I'm trying to figure out what NAMA is and why some people insist NAMA is not a bailout to developers.

Point 1)
Without NAMA developers loans would be liquidated quickly and they would face huge losses & poss bankrupcy in the short term.

The Banks cannot afford to take the losses on the NAMA loans, that is why they are rolling up interest in the hope they can hide the losses and work them out over time.

This is what happened in Japan.

NAMA will have no such problem and will liquidate the borrowers if they don't come back into compliance with the terms of their loans.

.

[Dreaded_Estate]

NAMA is a bailout for bank shareholders and subordianted bondholders not directly to developers.

The government policy of trying to set a floor under the market is very beneficial to the developers, who would be among the largest property owners in the state.

So for developers in depends on what NAMA actually does. Only time will tell how the developers are dealt with.

[Raketemensch]

Only post here with any truth in it.

The OP was 2 questions Brainiac, how can a question be untrue?

[Hal]

The OP was 2 questions Brainiac, how can a question be untrue?

When neither of the 2 points raised in the OP are true.

[Watcher1]

The Banks cannot afford to take the losses on the NAMA loans, that is why they are rolling up interest in the hope they can hide the losses and work them out over time.

This is what happened in Japan.

NAMA will have no such problem and will liquidate the borrowers if they don't come back into compliance with the terms of their loans.

.

Do you honestly think they will do that? Their ardent supporters for God knows how long will be fed to the wolves? Come on, wake up and smell the coffee. It's LaScama, a rich aroma of horse******************** and builders crap.