How is Anglo, used and abused by everybody in the golden circle, of systemic importance?

Yes - I also read Alan Ruddock, and have linked some of this stuff on this blog previously. Serious journalist and a “great loss for national economic debate as well as being a personal tragedy.”

But what I will miss most are his sporting snippets - especially on Irish Cricket.

“At least the Shannon is still flowing in Athlone.”

Wait until the Dublin local authorities get their hands on it. But maybe the reduced demand for housing and jacuzzis, and the prospect of water metering, will reduce demand for water amongst the Eastern Folk. Not that changes to Real Life ever caused a local authority to change its plans.

bjg

But the audience from Athlone on Primetime here are telling Batty O’Keefe that it’s not flowing. One of them just used the phrase “self-deluding lie.”

At least the Shannon is still flowing in Athlone.

Somebody just asked Batty where the jobs are that they voted yes to the Lisbon treaty for. “Ah - we need to create the right environment… and it’s all about cost inputs,” says Batty.

Apparently we are “going to get them all back into the education system.”

There was also a comment about trying to stay in education as long as possible, go do a Masters etc. (because there’s f-all out there in terms of employment for graduates). Perhaps nobody has pointed out that’s already happening.

Surely the Board of Anglo-Irish will keep the Citizenry informed …………..

http://www.irisheconomy.ie/index.php/2010/05/30/department-of-finance%e2%80%99s-strong-responses/#comment-54434

“Can they not use said promissory notes as collateral to raise cash?”

As I understood it, all of their tier 1 capital could be used to raise cash. I don’t see this as a liquidity matter - I think it’s a capital cover/insolvency matter. The Dof has said it’s to cover losses with NAMA and remaining loans - RTE seem to have the best verbatim from Upper Merrion Street.

http://www.rte.ie/business/2010/0531/anglo.html

“A statement from the Department of Finance said the bank needed new funds because of the losses it had taken on the loans transferred to the National Asset Management Agency and because of further losses on its remaining loans”

http://www.independent.ie/opinion/analysis/dont-bank-on-this-lot-to-come-clean-on-their-own-2142492.html

http://www.independent.ie/opinion/analysis/nama-has-started-to-pull-punches-already-2200426.html

http://www.spectator.co.uk/alexmassie/6046924/alan-ruddock-19602010.thtml

Another 2 billion down the drain. The fact that it was signalled on Terrible Tuesday in March doesn’t diminish the pain.

This country must have some extraordinary grip on our psyche if so few of us have left up to now.

http://news.bbc.co.uk/2/hi/business/10203075.stm

The only thing I will say here is that I am actually happy that this €2bn has been put in as recapitalisation and wasn’t disguised as payments for the first tranche of loans.

Quite incredible that they’ve determined to keep Anglo going. It makes little sense. What are Anglo’s core competencies? Do they excel at something?

Can they not use said promissory notes as collateral to raise cash?
Or am I thinking of something else? I’m possibly losing the plot.

Also the injection on 28th May, 2010 is nearly three weeks after the first tranche was transferred at a 55% haircut (you could argue it was a 62% haircut because NAMA refused €0.7bn because of issues with paperwork and security).

Anglo upto last Friday would have had a 19% provision against the remaining €26bn NAMA-bound loans (subtracting the €5.1bn haircut from tranche 1 from the Dec 09 provision) and even if the €2bn has been applied entirely to NAMA - Dof say “other loans” also needed a provision - then at max the remaining NAMA loans have a 26.6% provision.

Isn’t it time to put it to Matthew Elderfield that either Anglo is significantly insolvent or is reckless with its provisions against NAMA loans?

Did we guarantee derivative positions.

I take it we agree on the danger?

Do we allow it to happen?

Ahh, why not, it’ll be fun to watch the unwashed take it out on their betters ……..

Anglo needs capital to staunch the capital losses but more likely it also needs liquidity for day to day operations. If it didn’t get that, it would default and crystallise the guarantee….

@Aidan McGrath

The BWII quote you were looking for is as follows (and it gets better if you re-read it a few times):

“How would we be in a better place if we had excluded bonds from the guarantee? How much has guaranteeing these bonds cost? The only way to default on these bonds is to have the bank liquidation we are trying to avoid. The guarantee was only for TWO years and has so far and most likely will cost nothing. To that extent the TWO year guarantee was a resounding success, all upside and we didn’t have to pay out, like insuring a catastrophe which never happened.”

Quite. A catastophe which never happened.

“what exactly is Anglo doing with this money.”

This is now the key.

If Prof. Honohan wishes to protect his impeccable credentials he would want to begin addressing what are now becoming very serious transparency issues surrounding the Anglo bailout.
.

Let Anglo Irish Bank and maybe some others go …..it will ultimately be better.

All Ireland Inc. is doing is building up a bigger debt problem for the future supporting these ‘catastrophes’.

Let the chaos begin NOW….have no regrets.

And a better stronger country with a better banking systems will emerge.

The Irish Government (People) need to get off the hook on this thing. And the Irish Government (People) need to stop messing around with stuff they no nothing about …like crisis economics.

Depression is painful, but it is progress.

With respect to Prof Whelan, and all the other economics experts, it seems to me that Anglo is like someone on a ventilator. They are breathing, their heart is pumping, their kidneys are working etc, but they are sedated. They ain’t going nowhere, and they won’t be taking any questions. Even if they are a goner, its important to know, for preventive purposes, how they got into that state.

Anglo borrowed tons of money abroad, to lend to crony developers here. A mad gamble in retrospect, but it was hugely admired at the time. All it is doing with our money now is paying off those gambling debts, so that it can eventually be let die off in a respectable manner. So as not to bring disgrace on the family.

Our government guaranteed Anglo debts in 2008, on the basis that it was a ’systemic’ (vital) institution. In other words, they chose to treat Anglo debt as if it had been Irish state debt. Lots of folk disagreed, but they did it anyway, and it’s now the law.

The so-called Celtic Tiger looks at this stage like a bit of a childish fantasy. There is a s concept in child development theory called the ‘depressive position’. It follows on from the ‘omnipotent’ stage.

The infant eventually comes to have some awareness of the fact that there is a world out there which isn’t all about meeting his/her infantile needs. Growing up is about recognising and accepting limits. No doubt there is a limit on how much bank debt can be loaded onto the citizens too.