State to take 15% stake in BoI.

[Cassandra Syndrome]

Where did you hear that?

Found that blog re last post:

The coming crisis? – The Story

[MsAnneThrope]

Breaking News, Feb 22nd 2010: Lenihan: Bank stake 'makes perfect sense'

Finance Minister Brian Lenihan today insisted a 15% shareholding taken by the state in Bank of Ireland today makes perfect sense. [...]

“We have had the Bank of Ireland as an institution of this country for more than two centuries,” the minister said.

“Banking has gone through a very difficult period. It will revive, and whatever the value and the increased value the taxpayer has in the bank will benefit pensioners in the future in Ireland.

Maybe, next century, the State will leave some flowers on our graves from the proceeds, as a thank-you like.

[Oldira1]

Valuers my hole.. they were some of the biggest scam artists of all during the boom. I asked for a valuation on my own house four years after I bought it for 72k. Some half eejit pulled up outside the wall of the house, had a quick look at it, and said ah it's worth 250,000, and you can add another 40k onto that if you haven't wrecked it inside. I was shocked. And he wanted 200/300 quid from the bank for doing that. Any wonder the whole thing went tits up. They were making numbers up in their heads

Yes and then the worst of them are appointed to the NAMA valuation panel.

It beggars belief.

[Conor]

It appeared in a David McWilliams article back in January. There is also a bloggers article on this that has lots of links in relation to it. Its not showing up in a search engine but I will find it for you
Don?t believe recovery hype | David McWilliams

Found that blog re last post:

The coming crisis? – The Story

Thanks for the links.

I'd make three points:
1) March isn't going to bring to an end the special liquidity provision measures by the ECB. They'll continue to tighten duration - having already completed their last issuance of unlimited 1-yr money, they'll now start completing their last issuances of unlimited 6-mth money, 3-mth money, etc - but it'll be a good while before they finish their full allocations in the weekly refinancing operations. The end won't be any way sudden, lest anyone should think that, and the ECB really hasn't given any indication when it'll come to an end (other than sometime this year).

2) The criteria for ABS eligibility will be tightening. I don't think we can know if or how much this'll affect Irish counterparties. For one thing, it's obviously never disclosed what they use as collateral week-to-week. For another, we have no real basis for making assumptions about what sort of securitisations are currently used - no Irish ones are publicly listed as being eligible (the lists are available here); there may well be a load of unlisted, non-marketable RMBS eligible, but we don't know that, or how much difference it'll make.

3) McWilliams says:

The major problem for Ireland is that the ECB will accept only AAA assets from March, but we don’t have any AAA assets...Our government debt, the least risky (apparently) asset in Ireland is not even AAA any more.

This is just wrong. The ECB's given no indication about that, and it was never the case before the crisis either (and, as it happens, it never differentiated between different qualities of Eurozone government's - no haircut was applied to gammy Italian debt over rock-solid German debt). The ECB's exceptional measures have never made any difference to the eligibility of eurozone government debt.

Bottom line really is, we have longer than those sources indicate, to solve a problem that may not be as bad as those sources indicate, through a means that those sources misidentify as being unavailable to us. There is certainly trouble ahead, but there's no need to give in to semi-informed hysteria.

[Sailor]

Valuers my hole.. they were some of the biggest scam artists of all during the boom. I asked for a valuation on my own house four years after I bought it for 72k. Some half eejit pulled up outside the wall of the house, had a quick look at it, and said ah it's worth 250,000, and you can add another 40k onto that if you haven't wrecked it inside. I was shocked. And he wanted 200/300 quid from the bank for doing that. Any wonder the whole thing went tits up. They were making numbers up in their heads

The job of a valuer is to give you an estimate of what you can expect to realise for the property in prevailing market conditions. They did that - the fact that property prices fell subsequently has no relevance.

[MsAnneThrope]

The job of a valuer is to give you an estimate of what you can expect to realise for the property in prevailing market conditions. They did that

They did that in Liam Carroll's examinership case too, and were practically laughed out of Court.

[Malbekh]

The job of a valuer is to give you an estimate of what you can expect to realise for the property in prevailing market conditions. They did that - the fact that property prices fell subsequently has no relevance.

Yes, in the sense that you can have good and bad valuers. The problem was and is, people didn't want to hear the good ones and only listened to the bad ones.

And yes, this goes for all of us involved in the merry-go-round. The difference here is that most of us weren't elected to give good governance and listen to the good valuers.

This is why the IGB site is looked upon as a classic example of where it all went wrong.

[sandar]

article tody in rish times saying that when the aib come to pay the government the government hope it will be cash..i disagree at this time for reasons outlined earleir on this thread and think it will be better fr ireland in the medium term for the banks o pay in shares

[Cassandra Syndrome]

Thanks for the links.

I'd make three points:
1) March isn't going to bring to an end the special liquidity provision measures by the ECB. They'll continue to tighten duration - having already completed their last issuance of unlimited 1-yr money, they'll now start completing their last issuances of unlimited 6-mth money, 3-mth money, etc - but it'll be a good while before they finish their full allocations in the weekly refinancing operations. The end won't be any way sudden, lest anyone should think that, and the ECB really hasn't given any indication when it'll come to an end (other than sometime this year).

2) The criteria for ABS eligibility will be tightening. I don't think we can know if or how much this'll affect Irish counterparties. For one thing, it's obviously never disclosed what they use as collateral week-to-week. For another, we have no real basis for making assumptions about what sort of securitisations are currently used - no Irish ones are publicly listed as being eligible (the lists are available here); there may well be a load of unlisted, non-marketable RMBS eligible, but we don't know that, or how much difference it'll make.

3) McWilliams says:

This is just wrong. The ECB's given no indication about that, and it was never the case before the crisis either (and, as it happens, it never differentiated between different qualities of Eurozone government's - no haircut was applied to gammy Italian debt over rock-solid German debt). The ECB's exceptional measures have never made any difference to the eligibility of eurozone government debt.

Bottom line really is, we have longer than those sources indicate, to solve a problem that may not be as bad as those sources indicate, through a means that those sources misidentify as being unavailable to us. There is certainly trouble ahead, but there's no need to give in to semi-informed hysteria.

Thanks for that insight. I remember back in November they were saying that they would be tightening their lending facilities from the "unlimited" status. December this year is the expiration of the 12 month's papers. But March kicks off the expiration of the 3 months from the date of that announcement. So raising new 3 months to rollover will become more tricky and expensive.

I know McWilliams was very hyperbolic there, but there is going to be a hole of some sort in March.

The Irish Government for example issued 160 Billion of commercial paper of various lengths under a year last year. When do these rollover again? Everyday I would imagine. And who was buying them? I'm sure it all gets traced back to the ECB through different institutes etc. If new 3 month papers have to be backed by triple A securities, how will this work for Ireland from now on? How do we rollover our 3 months? In June it will be 6 months, September 9 months and December the 12 months?

[Sailor]

Yes, in the sense that you can have good and bad valuers. The problem was and is, people didn't want to hear the good ones and only listened to the bad ones.

And yes, this goes for all of us involved in the merry-go-round. The difference here is that most of us weren't elected to give good governance and listen to the good valuers.

This is why the IGB site is looked upon as a classic example of where it all went wrong.

The point I was making, Malbekh related to ordinary houses for sale as opposed to development land. At the time we would have been very unhappy with our valuers if they gave us advice resulting in our not getting the best price available in the prevailing market.