What about these other comments by Bo Lundgren, which I have copied from his testimony?

“On the question on the moral hazard, I read an article a couple of days ago in The Irish Times by Professor Morgan Kelly, since I went through the web to see what the debate was in Ireland. There was one mistake in the article. He said the Swedish bank had only deposits, no bond financing. Of course, Sweden had bond financing as well.

 Deputy Joan Burton:    Were there guarantees for the bonds?

 Mr. Bo Lundgren:  Yes. All creditors, except shareholders and perpetuals which are said to be similar to equity. What Professor Morgan said in his article was that bond holders should take responsibility since they have high interest and should be able to take a blow if the bank goes bust, so they have to lose money. That is not feasible. If there is a systemic crisis one has to guarantee all creditors. It is out of the question that anyone should lose. Let us look at Northern Rock where people stood in line, it was the modern time bank run. There may even be Internet bank runs and we had some in Sweden with Lehman as well. I have always proposed that deposit insurance schemes should have 90% compensation because one should take a 10% risk. Over a certain limit, in the British system, one had 90% compensation and obviously that was enough to have many people standing in line waiting to get money out. The experience of Lehman and Northern Rock shows the need to have this guarantee for all creditors. Everyone, including Germany, knows there is an implicit guarantee that is 99% sure but making it explicit gives another percentage and that is a vital percentage. That is a good way of handling the situation.
Obviously bond investors should be able to analyse a bank, think and then invest. The economy will not suffer as much from the problem of moral hazard on the account of the bond holders in a bank compared to what is happening in the real economy. On the other hand I see another moral hazard question, that is, that if shareholders are bailed out and can recover their value later, they can make the same mistakes again because they were bailed out. Management in banks, boards in banks and shareholders must learn the tough lessons.”

“Deputy Richard Bruton: 
Mr. Lundgren has acknowledged our crisis is deeper than that of Sweden. There is a debate as to whether the taxpayer can save everyone. In its model, Sweden drew the line and provided that everyone, bondholders and depositors, would all be guaranteed and protected. We have not given a guarantee to bondholders unless they are within the dated area. The Swedish model would have extended that guarantee further than we have gone. On reflection, the Swedish model worked at the time but, perhaps, other countries were not in a liquidity crisis as they are now. Sweden could manage its liquidity within a world that was not entirely stressed out. If it was trying to do that now against a background of stressed markets everywhere, what would be the stress points in the Swedish model that might have to be tweaked and can Mr. Lundgren offer any advice to others who are looking at the process in a much more stressed international environment?
 Mr. Bo Lundgren:  It is difficult. The Bank Support Authority is looking at what might happen in Sweden. I will elaborate. If one does not guarantee bond holders — I can see reasons for not doing it — will that investor invest in banks again? Probably not, it will take some time. They will ask for more security or higher interest to invest. Given the total volume of the problem, Ireland cannot do it. If the losses are so great that it cannot be done, it takes longer to revive the economy. I am in no position to give any advice on that issue but I dare say one has to think about it. If Ireland does not have a blanket guarantee that covers all bond holders then it might have a problem in furnishing the liquidity mentioned, because liquidity is needed not only from central banks and the government communities around the world, it is also needed for the private investor in the long term. It is a difficult question to which I have no answer.”

I am not a bond market expert myself but I think that Bo Lundgren is now head of the Swedish National Debt Office so presumably should know what he is talking about?

Try replacing “Brian Cowen” with “Dermot Ahern” and you might hit the nail squarely on the head.

instead we had a government intervention that took the most expensive route available and now more and more people are realising that it isn’t about what’s ‘fair’ or ‘right’, its about what ‘is’ and what needs to happen so we are not turned into any more of a joke nation than we already are.

hence even traditional enemies are crossing over to become pro-nama.

I am afraid that I have to disagree with you and no I am not confusing Marc and Shane

get the motor industry and the property market going again and RTE advertising picks up. PK salary recovers as well.

Pat Kenny is not an entirely un-opinionated person.

He is very disposed to arguments which favour “getting the motor industry going again and I think that deep down he feels the same way about the property market.

OK

It’s actually kinda nice that some IT guy has not already been dispatched to fix this little quirk.

Our blog software appears to have been designed by conscientious objectors to Daylight Savings Times. We’ll be back in tune with the rest of the world when the clocks change again.

Another part of this was the implication that although contacted none of the 46 were available.
It should have been clearly stated:
How many were contacted?
Of these, how many were actual contact: phone as opposed to email etc.
How many of these did refuse?

But it was left loose, and the implication being all 46 not available.

Saying this, is it to be expected that this is part of the beating for signing the letter?

Al

Cheers and thanks for that.

Just thought it was pretty slimey of PK to reiterate this at the end of his slot.

Keep the flag flying, you and your colleagues are doing a fantastic job by informing the public in this debate.

And, I actually do believe your contributions are having a significant effect.

There will not be a NAMA as originally proposed.

Thank you.

PK has just stated again that you were unwilling to appear this morning, even quoted you.

Also, his researchers could not get in contact with ANY of the other? 45

“Exactly. And the debate should be about the proportions of the contributions.” Okay, and since in another thread you state the clear fact that subs are relatively small beer, you do mean the Senior Debt. And I agree, IF the hole is of 60Bn proportions then I am afraid we are at the stage of national default as a lesser of evils. The problem is that forcing a senior debt/equity swap now is precipating that final resort on the basis of a big IF.

Perhaps there is a way for Senior Debt to continue to be exposed to the hole without turning it into equity (which would IMHO be definitely a default) but I can’t think of that trick myself.

But, has anyone noticed that the posts here always show exactly 1 hour less than when they are actually made, for example I am making this at 11:45 am

Bet you the post will show 10:45am.

This may go some way to explain the timing conspiracy theories of posters trying to put faces to contributers on Politics.ie and thepropertypin.com.

Dr. Bacon is no longer under contract but he always gave the impression of having one hand tied behind his back when he defended NAMA - that one hand is to my belief the off the record instruction to find any solution except nationalisation.

Alan Ahearne has been more successful, but he had to stoop to the smoke and mirrors lexicon to get through most of his interviews.

Minister Lenihan is definitely his father’s son.

The other arm of the pincer is popular opinion.
Noel Whelan recognised it on Saturday.
The electorate wouldn’t buy tenners for a fiver from this government.

But don’t underestimate the government.
Paul Hunt made the point tellingly on another thread.
Their experience of “competent government” is limited but they know know how to fight and they have all the resources of the state and a lot of vested interests at their disposal. They don’t care who they bring down with them in order to win this fight.

This is the biggest decision ever - I normally say that to mean that we should all give it our greatest attention.
But there is a sinister side - it is also the biggest decision ever for the vested interests. They will deploy every weapon in their armoury to ensure that their interests are being defended.

A bare-chested Brian Lucey in a leather skirt is an ‘interesting’ image..

With regards to Coleman’s article and the levy v staggered payment argument. The banks need a clean break with their past if NAMA is to have any chance of succeeding in its stated aim (which isn’t to make a profit AFAIK).

Anything that can be viewed as a contingent liability on the banks will seriously effect their ability to raise future funds. So, for the future, the best option should be for NAMA to be a one shot trick for the banks. NAMA gets one chance to get the price right and no comebacks.

Anything else and NAMA is going to fail in its raison d’etre. And so would be pointless.

It is also a little unfair to look at the 46 as some incorporated group. There seems to be a presentation in the media of the 46 as something bigger than a signature on a letter.

Almost like there is an address with an office, a secretary, and a website…

When it is more like ‘300′ 46 brave warriors holding back the persians!!!

Al

Exactly. And the debate should be about the proportions of the contributions.

But back to what I think is becoming one of the main issues here. Let’s say you’re right and the hole is €60Bn. Somebody has to suffer that. There simply isn’t nearly enough equity/loan capital in the system to fill that hole. So it’s either the taxpayer or the other liabilities of the banking system. Depositors, thankfully appear to get the protection of all sides of the debate, so that leaves the Senior Debt.

He also said I was unwilling to go on air - unable due to too much else to do (typing this at my home office desk where I have a coffee, and have been here since 0815h….) is more accurate.
For the record, what I said was “the issue of the deficit being .. is ultimately a sideshow in the debate on NAMA.” As it is. the real issues are payment, risk sharing and absorbsion, and so on.

Now back to that damned chapter thats due tomorrow!

Now, to earn their coin filling column inches they must authoritavely declare their wisdom like they do on all other matters.
Now, in this foreign ground they are circling the wagons in a way not unlike the political wagons have.
Would it be too much for them to express their ignorance at the start of the article and then develop from there?

@ Brian Lucey
Pat Kenny just called you out on radio!!!

Isn’t the real debate here whether we can screw the Senior Debt. Nobody objects in principle to punishing equity (already down 50Bn, 5 left) and Tier 1/U2 loan capital (already down €4Bn, 4Bn left?) but Senior Debt? that is a whole new ball game - that would be a National default. Even FG who rashly discharged this “silver bullet” are now backing off.