But back in the real economy, deflation becomes rampant and irreversible. How do you offer a negative interst rate? As incomes fall, so does inclination to borrow. Asset prices are falling so why buy and take a loss on the asset? So borrowing goes slowly into reverse and capital slowly builds up. Very slowly. Very, very slowly.

But what the heck, why not take on 100,000,000,000 euro borrowings in order to keep failed banks afloat so they can sack all staff, sell off all branches. Joint stock companies are not meant to be universal and eternal.

Liquidate now! The directors of the banks all have a duty to cease trading while insolvent. Ask them to do so!

All just as the baby boomers are retiring in the West.

At the time of the last census, when we were still pumping out close to 90,000 new units per annum, it was found there were around 250,000 empty residential dwellings in Ireland (not holiday homes). This is a non-tradable asset - we can’t ship it to markets abroad - in which the country is grossly oversupplied.

Worse, the famously income elastic Irish labourforce is now kicking in and the likelyhood of a spike in household formation is remote at best.

I wouldn’t be too disheartened to have to debate a motion that the “long-term fundamental economic value” of these NAMA assets is somewhat BELOW current mark-to-market prices. And here we are trying to justify a premium.

This CANNOT continue indefinitely. Come mid 2010, the European economy on the whole may well have recovered enough for the ECB to want to start hiking rates, but first they will start by draining liquidity from the banking system. The first 1 year ECB repo operations (”LTRO”, eur 442bn last june 24th ) will expire in June 2010. There will still be some liquidity provision by the ECB, but this is likely to be on a short-term basis only, and definitely not unlimited. This could lead to huge pressures for term funding (i.e. Euribors rising). Together with the Irish bank guarantee expiring around that time, we could be in for a real credit crunch.

IMHO: their banks are property crashed like ours are.
But they have carried more of the subprime.

Implicit in what you have identified, is the UK USA control their own currency, and hence can print their own money, which they have done.
We cant print our own as part of the Euro.
So in the short term they have bought their way out of the here and now.
But as to the cost of this in the longer run will most likely be reflected in the value of their currencies, which of course should decline.

Time for a return to the gold standard!!!
Al

Ps: Highly recommend Henry Liu.

Try this:
http://www.atimes.com/atimes/Global_Economy/KH20Dj02.html

In the context of bank losses and the NAMA debate, shouldn’t there be realistic estimates of expected losses on non-property lending over the coming 3 years?

US commentator Larry Levin says bank executives have a lot of leeway in how and when they recognize credit losses.

“Some are actively engaging in ‘extend and pretend,’ a practice in which banks refinance deadbeat borrowers to avoid reporting loan losses,” he says.

“Recall that bank executives have lots of control over the timing of loss recognition. Evidence that banks are delaying loss recognition is springing up all over the place. For instance, some banks that provided unsecured revolving lines of credit to highly indebted REITs have waived some restrictive loan covenants. In residential mortgages, we’ve seen lots of instances where banks are stringing along underwater homeowners with modifications that do little more than kick the can down the road.”

http://blog.secretsoftraders.com/?p=563

This is very relevent for the NAMA discount discussion as Rabo are not part of NAMA and have been quite aggressive in extricating themselves from Ireland.

I guess the crux of my question is - have the US and UK authorities, in dealing with their respective banking crises, engaged in the kind of bailout of private shareholders with taxpayers money that the commentators on this site are railing against in the case of the proposed NAMA structure?

Or did they come up with a superior structure which adequately protected their taxpayers and properly punished shareholders?

You have tried to allow others access to a world point of view. It is too late now for much capital, but there is astill precious capital that can be saved by disbelieving the MSM, the main stream media. Please dear reader, realize that this is far worse than it appears!

Here are links to two economists that I have respected for years: Henry Liu and David Goldman
Their articles are hosted on asiatimes.com, an internet based ‘newspaper’
that I would rank as the best online analysis out there.

http://www.atimes.com/atimes/others/Henry.html

http://blog.atimes.net/

There are others hosted on the main site

Al

The difference in the US, surely, is that banks have failed via FDIC enforced sale to a stronger outfit, rather than being liquidated with a resulting disposal of securities at firesale prices. In Ireland, the notionally stronger outfits are the ones with the biggest problems.

I appreciate that the circumstances in these two countries are not identical to Ireland but there are lots of similarities, and given that the majority of people on here are very critical of the current NAMA approach, I would be very interested to hear views on the efforts of these other jurisdictions.

I would assume that the authorities in the UK and US have done a much better job, given their vastly superior resources in terms of numbers of skilled professionals they could throw at the problem.

Apologies if this has been done already.

The grounds are that if we wish hard enough it will be so.

If we build it, they will come.