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Thread: FG claim Soros,Stiglitz etc support their bank plan- do they ?

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    Politics.ie Member cyberianpan's Avatar
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    Default FG claim Soros,Stiglitz etc support their bank plan- do they ?

    FG supported the original bank guarantee, and then came up witha pretty weak banking crisis plan last May. They keep flogging this meager 4.5 page Word document.

    Now they claim George Soros, Professor Stiglitz, Dermot Desmond, David McWilliams, and Michael O'Sullivan support it:

    Irish Times
    Fine Gael finance spokesman Richard Bruton welcomed the intervention of Prof Stiglitz.

    "Together with George Soros, Professor Stiglitz is one of the prominent advocates of Fine Gael's 'good bank' solution to fixing the banks. He joins financier Dermot Desmond, commentator David McWilliams, and Michael O'Sullivan of Credit Suisse Private Bank, among others," Mr Bruton said.
    Their plan was rubbished by Karl Whelan here, and on that same thread you'll see Brian Lucey hauling up Andrew McDowell on the detail of the plan (FG were very confused about what bonds were what). Andrew McDowell is of course an ex quangocrat (Forfás) and now as Fine Gael's chief economist is the author of their crazy banking plan.

    Do FG have any proof that Soros,Desmond,Stiglitz & McWilliams specifically support their plan ? I haven't seen any, and doubt it exists.

    cYp
    "Yawn , am I alive yet ?"

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    George Soros ??? The Devil Himself ???

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    FG supported the original bank guarantee
    And? Whats the relevance of this to NAMA?

    and then came up witha pretty weak banking crisis plan last May
    And they have expanded substantially on this since. Why forget this?

    Secondly, I hasten to point out that in your opinion it is 'weak'.

    I happen to believe that the Good bank/bad bank proposal, while imperfect, is a far better alternative that NAMA.

    I admire the concerted attack on NAMA by certain sectors, and the blind dismissal of FG's proposal as unrealistic, and that Nama is the only game in town.
    In a sense, it has unnerved FG. The proposal is too complex for the general public to digest in any great sense, meaning it is virtually impossible to get public support behind it.

    Nama's strehgth is that it is easily understood in principle, and easily explained. The debate has now moved on to ways of improving Nama, rather than dumping it or not.
    That has been FF's biggest victory thus far.

    The good bank/bad bank plan is too revolutionary to be accrptable?
    No AIB and BOI anymore? Heavens! Better just saddle the taxpayer and reinflate the property bubble.
    Easier to understand.

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    Politics.ie Member Rocky's Avatar
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    They support the principle of the plan. As Fine Gael isn’t in government, their plan was only developed and written by a very small number of people and it is vague and there are holes in it, but that’s to be expected. If they were government they like Fianna Fail would have a whole department of Finance and the ability to contract British financial firms like the government does, so they would obviously be in a position to flesh it out, improve it and fill in the holes.
    "Give us the future, we've had enough of YOUR past, Give us back our country, to live in, to grow in and to love..."

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    Quote Originally Posted by cactusflower View Post
    George Soros ??? The Devil Himself ???

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    Politics.ie Member cyberianpan's Avatar
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    Quote Originally Posted by Avon Barksdale View Post
    Do political parties generally release policy documents to the public in the form of 200+ page tomes?
    As I said above the plan was ridiculed by some of the foremost Irish banking experts, and it was clear from their confusing the bond types that they hadn't done their backing homework.

    Biggest ever government policy decision in Ireland - FG's response ? : "ah sure lads knock off a 5 pager before ye go to the pub tonight will ye ?"

    Quote Originally Posted by Avon Barksdale View Post
    As I've pointed out on numerous other threads, David McWilliams has consistently called for all of the key aspects of the FG plan to be implemented as an alternative to NAMA - without actually endorsing Fine Gael.
    Now now, endorsing aspects of a plan is not endorsing the plan. I think Bruton's been caught out here ... and caught out badly.

    cYp
    "Yawn , am I alive yet ?"

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    I have just finished digesting that FG 4.5 page document.

    It's a crock of shít for 2 main reasons:

    a) it would cost nearly as much as nationalisation to implement
    b) if we could afford to implement it, it would be nearly impossible to do because it is so complex

    NAMA is a far better plan. It is the cheapest and simplest plan I have seen.

    And the beauty about NAMA, compared with FG's 2 track idea and nationalisation, is that if NAMA makes a mistake in its pricing, it can just let the assets sit there for as long as is needed to eventually recoup the cost.

    FG's model and nationalisation requires much more money upfront, and exposes the state to greater risks than NAMA.

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    Politics.ie Member bormotello's Avatar
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    Quote Originally Posted by Nick Leeson View Post
    a) it would cost nearly as much as nationalisation to implement
    True
    There is only one small difference
    In case of NAMA all taxpayers money will go to bondholders
    In case of FG plan most all money will go into Irish economy

    Quote Originally Posted by Nick Leeson View Post
    b) if we could afford to implement it, it would be nearly impossible to do because it is so complex
    Not really
    You can nationalize one more bank, BoI or TSB for example and then everything will be easier





    Quote Originally Posted by Nick Leeson View Post
    NAMA is a far better plan. It is the cheapest and simplest plan I have seen.
    Because our kids will pay for it
    “Every country has the government it deserves.”
    Joseph De Maistre

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    Politics.ie Member cyberianpan's Avatar
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    Quote Originally Posted by bormotello View Post
    In case of NAMA all taxpayers money will go to bondholders
    In case of FG plan most all money will go into Irish economy
    The FG plan is loony and should have died the day it was launched,

    Irish Economy

    Karl Whelan
    We will be left with the zombiest banking system in the world
    ...
    At this point, I’ve lost track of why FG think the zombie banks would do this.
    ...
    I’m sympathetic to what FG want to achieve here but the plan strikes me as potentially a recipe for chaos if adopted.


    On that same thread you'll find various comments by Brian Lucey where he rips to shreds the crazy FG notion that the bondholders will absorb the loss:

    Brian Lucey
    The idea of getting risk capital to absorb risk is entirely appropriate. However, FG in their document have a table which I find hard to understand. It suggests that there is between 50 and 75b in risk capital in AIB and BOI.
    ...
    Thats the total amount of Risk Capital they have. BOI is similar. So the total is not 50-75b, its closer to 30b. But they have to operate under a binding regulatory regime, so thatis not all available for absorbing losses (about 1/3 only I suspect) before the banks need more capital or cease trading or massively contract other risk assets (aka a credit crunch). The only source is the state.
    ...
    1) the 1-5y bonds are , mostly, for liquidity purposes and are not strictly sensu capital.
    ...
    3) Starting a bank is a non-trivial administrative and legal task, unless its proposed to amend significantly the banking acts. It cannot, I submit, be done in 4-6 weeks indicated


    The FG plan was extremely peculiar stuff , that aside the topic of this thread is:

    Do FG have any proof that Soros,Desmond,Stiglitz & McWilliams specifically support their plan ? I haven't seen any, and doubt it exists.


    cYp
    "Yawn , am I alive yet ?"

  10. #10

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    Quote Originally Posted by bormotello View Post
    True
    There is only one small difference
    In case of NAMA all taxpayers money will go to bondholders
    In case of FG plan most all money will go into Irish economy
    Wrong. The NAMA bonds sold by the banks to the ECB will allow the banks to:
    a) replace existing debt with cheaper debt
    b) buy back Government pref shares

    The FG plan doesn't pump money into the economy, as the "pumping" is still at the discretion of the banks. Banks don't pump money into economies in recession. It's risky, and FG know this.


    Not really
    You can nationalize one more bank, BoI or TSB for example and then everything will be easier
    I don't get what you are saying. Can you clarify your point in relation to what I said.


    Because our kids will pay for it
    Kids don't pay for NAMA, NAMA pays for NAMA. That's the whole point of it. The NAMA assets are managed by NAMA until such time as they break even (or turn a profit).

    Nationalisation and FG's plan would require huge borrowings, but unlike NAMA, these plans would require more expensive borrowing up front. The funding cost of this type of borrowing would be greater than NAMA.

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