Eurostat has determined that NAMA falls outside the general government sector: see the materials here.
Update: The SIV framework is puzzling some readers, especially the role of private equity investors. A handy primer is provided here and this report highlights that payouts from SIVs are typically skewed towards debt and management fees, with only a limited allocation to equity investors.
A list of proposed amendments to the NAMA bill is available here.
The IIEA is hosting some excellent speakers in the coming weeks: David Wright, Deputy Director General of DG MARKET at the European Commission; Stefan Ingves, Governor of the Sveriges Riksbank; and Justin O’ Brien, Centre for Applied Philosophy and Public Ethics at the Australian National University.
Full details are available here.
Yesterday morning on the Sunday Business show on Today FM, Minister Lenihan commented on the anti-NAMA economists (podcast here). Among his comments were the following:
What I notice about them is that there’s about forty of them. There’s about two hundred economists in all in the state. Most of the rest of them have approached me privately and said that these gentlemen and ladies are wrong. But of course they are not prepared to say so publicly because in Irish academic class, people don’t criticise other people’s books. That’s part of our national mediocrity. If you take the Irish historians and someone publishes a bad history book, you won’t find any reviews in the paper pointing out how bad that book is. If you look at the press in the United Kingdom or the United States, you’ll see robust academic criticism of others works but we’re reluctant to do it. We’re a small country, we have to meet people again, we have to go to other people’s funerals and we know and we don’t want to put the cross on someone even when they’re saying something that’s fundamentally wrong.
So Minister Lenihan is now saying that at least 80 economists have approached him privately to disagree with those who have criticised NAMA. He is stating that there is a silent majority of economists who support his approach to the banking crisis but are not willing to say so publicly because they are scared of insulting the anti-NAMA economists.
I’d be interested to hear people’s thoughts on this. Is it likely that the Minister has been receiving huge amounts of anonymous support from intimidated economists? Is the Minister’s characterisation of the absence of disagreement or debate among Irish economists an accurate one? If we suffer from a national mediocrity, are the anti-NAMA economists part of it? Is the Minister attempting to encourage debate or to stifle it?
Last night’s Week in Politics Show on RTE provided a fascinating illustration of how bizarre the debate over the National Asset Management Agency has become.
Presenter Sean O’Rourke introduced a report on the Dublin Economics Workshop in Kenmare (18 minutes in) by quoting Denis O’Brien’s comments about academic economists spending all of their time twittering and taking out ads in the newspaper. The report itself showed Morgan Kelly criticising NAMA on the grounds that it relied on extreme upper tail optimistic assumptions and that it would still leave them undercapitalised.
The report then showed Pat McArdle, former economist with Ulster Bank, responding to Morgan Kelly as follows (22 minutes in):
Freedom of speech is fine and we’re all in favour of it. But there are sometimes when you have to temper things in the greater interest.
Following the report, presenter Sean O’Rourke effectively endorsed this line of reasoning, immediately putting the following question to Pat Rabbitte: (24 minutes in)
Is there something to be said, and this is a theme that Garret FitzGerald has touched on in the last couple of weeks in his column, that there may be a case for people to pull on the green jersey as it were, set aside some of their more extreme doubts about NAMA and just see it through and give it a fair wind?
So this is what it’s come to. People can object to the government’s policies on the budget or health or education or whatever but objections to NAMA—an initiative that involves spending up to €54 billion of public money—must be condemned as unpatriotic.
In a supposedly open and democratic republic, this idea—that you should refrain from objecting to a government’s economic policies because this criticism runs counter to the national interest—would normally be considered morally repugnant. It says a lot about this country that this opinion is now being regularly aired by mainstream commentators in our print and broadcast media.
The programme had plenty of other stomach-churning stuff such as McArdle’s claims that Kelly had just dreamt up his criticisms of NAMA in the last week, junior Minister Dick Roche’s claims that Morgan was being “brittle” in response to McCardle, followed up by bizarre stuff about how this put him in mind of the need for more one-armed economists. And best of all, when Pat Rabbitte failed to agree to pull on the green jersey, O’Rourke told him:
But coming back to NAMA, they’re operating on the best available advice from say the head of the Department of Finance, from experts in Europe, from the European Central Bank, from the new Governor of the Central Bank.
Ah yes, the European Central Bank and the new Governor. Sean must have forgotten about Bo Lundgren and the IMF.