House prices down by up to 43% from the peak

[tonic]

For NAMA to break even LTEV only has to be 10% above the current market value, the banks only get their last 5% is it goes to 15% above.

He said this on the Irish economy blog the afternoon of his article in the Irish times and possibly on his own blog as well.

Any chance of that link?

First response is by Ronan Lyons
The Irish Economy Blog Archive Ronan Lyons on NAMA and Property Prices

[Scorpio]

First response is by Ronan Lyons
The Irish Economy Blog Archive Ronan Lyons on NAMA and Property Prices

Sounds to me like a clarification, not an error.
And following on from this, given that the banks' liability is capped at €2.5bn, the line in the graph above will asymptotically approach one that strips out a fixed amount of €2.5bn...

[tonic]

Sounds to me like a clarification, not an error.
And following on from this, given that the banks' liability is capped at €2.5bn, the line in the graph above will asymptotically approach one that strips out a fixed amount of €2.5bn...

So, your point is that if the property market goes low enough he'll eventually be right, more or less?

I'd say it was an error, I wouldn't like to think it was deliberate.

The fact is there's a 10%, not 15%, breakeven point for NAMA, he used 15% in his graph.

[Scorpio]

So, your point is that if the property market goes low enough he'll eventually be right, more or less?

I'd say it was an error, I wouldn't like to think it was deliberate.

The fact is there's a 10%, not 15%, breakeven point for NAMA, he used 15% in his graph.

I think we might be down to semantics here. Let's call RL's one gross, the total shortfall, and yours net, taking out the government's arbitrary €2.5bn at each point along the graph.

Better yet, email Lyons and get him to redo his graph, if you think it's wrong.

Incidentally, my original point still stands - the 10% breakeven point you use so definitively only applies at that one single point along the graph. The bigger the fall, the smaller the €2.5bn is compared to the government/taxpayers' contribution.