Therein lies the question.

The FF/PD governments in turn have captured/bought off the public service trade unions, the farmers, etc through Social Partnership. Of course Social Partnership had many beneficial aspects in its early years. Benchmarking was an another bright idea in theory which ended up paying over the odds without getting any significant changes in the way public services are delivered.

Where does the Green Party fit into all of this? They were cleverly seduced by FF into the present government at very little cost to the way FF do business for their backers. I suspect that many of the grassroots in the Greens are aware of their foolish decision in 2007.

NAMA is such a scandalous use of political power by the present FF led government to bail out its cronies that you would expect the Greens and Michael Lowry to have pause for thought. It is good to see that the grassroot Green are looking for a conference on the matter. Michael Lowry should also consider which side he is on - the speculators or the plain and many heavily indebted people of Ireland.

I still hold out some hope that enough TD’s and Senators will refuse to support this scam.

FF and the PD’s have been captured by finance and developers for quite some time. Some economists , particularly those in the employ of the financial sector, have been complicit in the capture of these parties. They have provided the doctrines to justify the massive build up of private debt, the tax breaks, the light touch regulation, the superiority of the “market”, the privatisation of many public services, etc. The FF/PD governments in turn have captured/bought off the public service trade unions, the farmers, etc through S

I think it is worth thinking about why the “mounties” are coming. The government is seriously short of cash and AIB will need recapitalising post NAMA irrespective of the price at which loans are transferred.
CIBC like any good capitalist has its eyes on the main chanceis and would want to buy into AIB at less than the prevailing valuations in the European banking sector. The only way that it can get in at these bargain basement valuations is if the recap needs in AIB are modest post NAMA i.e. low single figure billions. The only way there could be such a modest amount is if the transfer to NAMA could take place at an artificially high level.

If for example, AIB was to transfer 30billion to NAMA at a 15% haircut rather than a more realistic 40% haircut that is a 7.5bn euro potential subsidy from the taxpayer to the the shareholders of AIB. That is quite some dowry to offer AIBs new suitor.
One should then speculate as to why the Merrion Street Mandarins are so anxious to get rid of this unwanted child. “What do they know that we don’t know or are not telling us?” They are going to have to wheel out their brightest & best to justify this-we await Alan Aherne’s comments from the Dark Side.

“CIBC has been on the defensive since chief executive officer Gerry McCaughey’s first day on the job four years ago, when he was tasked with de-risking the bank in the wake of embarrassing … losses.”

Sounds like just the guy required in Ballsbridge…

“I wouldn’t be surprised if we heard other instances over the next few months of foreign banks expressing an interest in Irish banks as loans go into NAMA,” analyst Anna Lalor at brokerage Goodbody said.

Emer Lang at brokerage Davy also said further suitors could be found, with the banks’ valuation dependent on the discount on loans transferred to NAMA, which will have a book value of up to 90 billion euros.

“The recent publication of the draft NAMA legislation and the relative ‘cheapness’ of the Irish banks … has put the Irish banks firmly back on investors’ radar screens,” Lang said. (Additional reporting by Steve Slater and Kate Holton in London and Andrea Hopkins in Toronto; Editing by Hans Peters and David Holmes)

relative ‘cheapness’ - now what does that mean. Relative to the amount the taxpayer will pay to prop up the banks through buying grossly overvalued toxic property loans or relative to the current insolvency of the banks.

Allied Irish Banks, p.l.c. (“AIB”) [NYSE: AIB] notes the recent press comment regarding interest from a third party taking a minority stake in the Group and confirms that it has received such interest.

However any discussions with regard to this matter are preliminary and are not expected to progress in the near term, at least until there is greater clarity on NAMA among other issues. There can be no certainty that these discussions will lead to a proposal to invest in the Group or a transaction being concluded.

Personally, I am having trouble understanding exactly why the transfer to BoI and AIB shareholders involved in a whole of cycle valuation transfer with [Fianna Fail] in charge of a levy is better than temporary nationalisation with a quick sell off by the State for its own benefit of chunks to the PE players who will no doubt pay for a cleaned up moderately decent banking franchise in a country which is 7th easiest to do business in in the world. Am I missing something crucial?

I take your point. I forgot some numbers relating to Irish banks can be small :).

I am Shocked!

Who ever leaked that just made a killing.

In the words of Gordon Gekko
“If your not inside you are outside!”

Yeah, I had considered that, but how many of the majority stakeholders made their purchase between 04-07 (serious question)?

But on the face of it, the whole idea of the levy is crucial. First because if it is for real and means that any shortfalls will be recouped then it insulates the tax payer (at first glance), but second because what it means is that the banks, even after the bad assets are extracted, remain in commitments to take the hit over the bad loans - in which case, as others have pointed out - the banks are still severely weakened by the legacy of their bad loans and might need further state capital.

So if I’m right and the levy is crucial. How well is the whole mechanism for the levy tied down in the Bill? (Question to Karl or others who know)

And second, if the levy is very vague in the proposed legislation - leaving it open to the nods and winks you mention - doesn’t this mean the minister is basically taking the piss about the state being repaid by the banks in case of loans that become uncollectable?

Or third, if the levy mechanism is well tied down and the levy must be collected, doesn’t this mean the banks don’t really get much out of NAMA only a bit of structure and a kind of breathing space, for in the end they take the hit anyway?

“Ireland’s banks are in a “vegetative state,” surviving on European Central Bank (ECB) “life support,” according to analysts at RBC Capital in London.
“In light of the recent business franchise impairment, likely atrophy going forward and deposit outflows, we question the going-concern endurance of the banks,” the analysts said.
“The ECB appears to be acting as the lender of last resort for the Irish banks as their funding models have collapsed.”

The IT carries a limited version of the RBC note buried in the news section of the paper with the leak having front page lead story status. Wonder what is going on.

Interestingly, the leak, if designed to counteract the bad news, only serves to reinforce the perception that the taxpayer is about to be fleeced as the Canadians are reportedly only interested if NAMA takes the toxic stuff at a favourable valuation.

Or could it be that someone is attempting to manipulate the market. Strange that the IT would be used this way.

http://uk.finance.yahoo.com/q/bc?s=AIB.IR&t=my&l=off&z=m&q=l&c=

However, this story is not proof that nationalisation is unnecessary - after all, the government could resell AIB just as easily as the existing board.

in fairness, RBC is worth around €45bio, and they could buy a 30% stake in AIB for €700mio or so, so i dont think they’re under too much threat from this story. But yes, agreed, there could well be a “look, NAMA is working!” rational for leaking this story, which, true or not, is probably not what RBC want to be involved with at the moment.

If there is going to be a levy, AIB should build up a provision each year for expected clawbacks later but what prudent approach should it and its auditors take???

That aspect of the NAMA “plan” is a liitle opaque.

I would guess that the majority of holdings have been purchased since the crash.

So the answer on a killing is maybe or likely!

Am I missing something here? At what point are the shareholders taking a hit?