LinkBack URL
About LinkBacks
Joan Burton is one of the most competent and articulate politicians we have in Ireland. A head and shoulders above many in her own party and in another universe of class in comparison to most in either Fianna Fail or Fine Gael. Her delivery belies her ability somewhat but she is an asset to the Labour Party for sure. The men of FF and FG all hate her. Nothing more aggravating than a determined, capable woman showing them up for the eejits they are. She has a great knack for pointing out the gaping holes in their arguments.
Watching the special comittee debate yesterday it was clear that Brian Lenihan was terrified of her. An accountant herself, she is well on top of her brief and had the most pertinent observations and questions of the afternoon.
She wheedled it out of John Mulcahy that, as he claimed, trends show property prices recover to 88% of their peak market value within 7 years of the trough of a depression. By the look of him, Brian Lenihan was beside himself to hear this said out loud and if he could have yelled 'shut your bloody mouth' at Mulcahy he would have. He got very antsy with Burton and flat out denied that this formula was the one they would base the estimates on, claiming that what Mulcahy had said was just one of many assessments that would be taken into question. But you know what? I believe Lenihan was lying through his teeth. At any rate, it was then Mulcahy's turn to look gobsmacked. The look on his face was every inch the expression of a man who was thinking 'I thought that was what we had said?'
It was Burton too who insisted again and again that Fianna Fail must provide precise information about the nature of all these debts. Lenihan avoided giving any meaningful undertaking on that point.
Burton also nailed him on the outrageous powers of discretion that he personally retains over the whole NAMA deal. He can overule any decision on valuations - up or down - if he chooses. Plus he is under no obligation to reaveal his reasons. It's a fkking cowboys charter, NAMA! (Richard Bruton was on to this too, give him his due - and said he thought the final decision in such a serious matter ought to be for a body like the Comptroller and Auditor general. But RB was irritatingly deferential with Lenihan throughout). The bottom line is that there is no effective, independent arbiter of the valuation. When it was pointed out to Lenihan that his personal assurances might not be enough to make us all feel confident about what he was doing, Lenihan replied - and this was surely the best joke of the whole afternoon:
"I don't like the presumption that the Minister would be remiss in protecting the taxpayer.'
***!!!???!!!! I wanted to box the ears of all the opposition party people present for not falling about in hysterics at that one. If Fianna Fail had been briefed to be 'remiss' about the tax payer, they could not have been more successful at it than they have.
Anyway, there you have it folkses, looks like we are going to be paying out spectacularly.
Chartered surveyer, Eoin Mc Dermott in today's Irish Times explains the normal valuation model and concludes that Lenihan's newly-invented 'long-term-value' model is unsound.
http://www.irishtimes.com/newspaper/...253586371.htmlHowever, the Nama legislation also introduces a concept of “long-term economic value” and provides a definition of this which is wide and open to interpretation. This new concept is being developed as an alternative, or an addition, to “market value” to fulfil an identified purpose – which in this context is to be used as a formula to extract non-performing loans backed by property collateral from the banks. It would appear that the proposed “long-term economic value” model will use demographic, economic and financial forecast inputs as well as market value to determine a guide for what a particular property might achieve if sold on the market at the date of the transaction or indeed subsequently, under “normal” conditions.
Another important factor in this process will be the categorisation of property assets including undeveloped unzoned land, undeveloped zoned land (greenfield, brownfield, prime urban), undeveloped property with planning refusal, undeveloped property with planning permission, partially completed buildings, completed unoccupied buildings, completed partially occupied buildings, etc. It is imperative that an overall strategy and action plan is put in place for the macro management of these distressed loan assets.
The reliability of the “long-term economic value” model is difficult to assess and from a chartered surveyor’s point of view cannot be upheld as a conventional valuation.
Whether or not the development of this new model of “long-term economic value”, as set out in the draft Nama legislation, is appropriate will continue to be the subject of debate. From a chartered surveyor’s point of view, it will represent a departure from conventional valuation that has been developed and well tested over a period of 40 years.
Edit: Irish Examiner report on Mulcahy's valuation model: http://www.irishexaminer.com/ireland...sor-99922.html
Mulchay said "Every global property crash has led to a recovery.' Sure. Like every mugging of a victim has led to their recovery.
Reply With Quote
Originally Posted by BodyofEvidence
