Yesterday, I visited my father’s grave in Shankill. He passed away this week last year. Listening to I’m Only Sleeping by the Beatles – a song that always reminds me of him and where he is now – I looked out over the cemetery, which is an elevated site.
It is a beautiful spot. To the west, you have the still-snowcapped Wicklow Mountains, and just behind you the Irish Sea crashes onto the beach.
The late afternoon sun was dipping between the Sugarloaf and the lead mines, and the place was quiet, empty and peaceful. This is the type of natural beauty my Dad loved, and the setting prompted lots of tongue tied aunties to tell me last year that he’d appreciate his resting place.
Other people appreciated this place too, it appears – but for very different reasons.
The geniuses at Davy Stockbrokers were taken by it at the height of the boom. They saw ‘‘potential uplift’’, as they might have said back then. So too did their private clients and the developer Joe O’Reilly – one of Anglo’s Golden Circle.
In fact, so taken were they that they paid €58 million for a huge site next to the cemetery. The site, Woodbrook, where the golf club used to be, lies beside the graveyard, just beyond the Protestant church.
In July 2006 this 51-acre site was bought for over €1 million euro per acre without full planning permission. According to a glowing article in the Sunday Times back then, the fully-developed site would be worth close to €1 billion when it was developed.
The Davy private client consortium was asked to put up what is called mezzanine finance- a kind of bridging loan for rich people – which plugs the gap between the developer’s equity, the bank’s loan and the purchase price. For this loan, the private clients were to be paid an astronomical 17 per cent per year.
Anyway, now it is all over, and Davy admitted last week that the investors might get 5c for every €1 they invested, if they are lucky. If I were one of these private clients, I’d be livid with Davy and the salespeople who put together this little deal.
I’d also be kicking myself as to how I thought it possible a deal could carry a 17 per cent interest rate – when bank rates were 3 per cent – and not be risky. Then again, when greed takes over, all logic goes out the window. Anyway, the house of cards has come tumbling down here in Shankill, as it has all over the country in other sites and deals.
However, for the average citizen – ordinary people like my father, who never got involved in all this carry-on – the sickening part of the Davy Stockbrokers publication last week was that we – not they – are going to pay for this greed, through Nama.
In a nauseating paragraph, Davy says in its report that ‘‘Nama is likely to be the only institution that will have the capacity to provide development finance to build out development projects and thereby provide some capacity for return’’.
There it is, in black and white. his toxic loan, which the promoters say now is worth 0.05 per cent of what it was originally, will be given to the taxpayer to fund. What sort of nonsense is this? This land should be sold now to whoever wants to buy it and the Davy private client T consortium, the loan and the developer should be allowed to suffer.
That’s not to say they can’t start again, but this Nama scam is of no value to Irish society, other than to confirm that the banks and the government are giving the two fingers to the rest of us. But it gets worse because, in order to keep Anglo, one of the main financiers of the property bubble open, lots of things have gone on behind our backs, but in our name.
Anglo needs cash, but the only bits of collateral it has are these worthless loans. The European Central Bank knows this stuff is worthless, and won’t lend Anglo money against this trash. But our own Central Bank will, using our money.
In the past year, the Irish Central Bank has lent €10 billion to Anglo, using an instrument that it would prefer you knew nothing about. This instrument, called the ‘‘master loan repurchase agreement’’, is a hangover from when we had our own currency. Evidence of its existence is buried deep in the Central Bank’s balance sheet under the ambiguous title ‘‘other assets’’.
The reason this is important is that it shows that, since Anglo was nationalised, it has gobbled up another €10 billion of our money. When Enda Kenny says there will be riots if Anglo receives another cent of public money, in a way he is behind the times. The money has already been given to Anglo, via this secretive facility.
Since last March, the Central Bank has lent Anglo €10 billion in return for so called collateral of €14.5 billion. But the only collateral Anglo has are worthless loans like the land for Woodbrook golf course in Shankill, which Davy Stockbrokers now estimates is worth 5 per cent of its 2006 purchase price.
If we were to apply the same discount to the Central Bank’s loan to Anglo, we would see that the Central Bank – acting in our name – has lent €10 billion in exchange for collateral that is worth just over €750million.SotheCentral Bank has probably already lost over €9 billion. The only way this will ever be recovered is if Nama succeeds in driving the price of this land in Shankill backup.
But who wants this? The very rich private clients of Davy Stockbrokers, for one, who are betting that Nama will bail themout. Who pays for this class rescue scheme? You do!
I left the grave yesterday, contemplating, among other things, what my father and his generation would make of this pathetic game, where the poor pay for the rich in order to legitimise the latter’s greed. What would they think of the insiders once again shafting the outsiders?
My father’s generation – born in the 1930s – built this country. They emigrated in the 1950s in huge numbers when the insiders who ran the place drove it into the ground with their isolationism. When the rest of the world boomed in the 1950s, Ireland – run by the grandparents of the politicians who run the place now – stagnated.
My father’s generation paid the high tax of the 1970s, only to see their children emigrate in the 1980s when the parents of this present government ran the place into the ground yet again.
And now, as that heroic 1930s and 1940s generation is passing away, they leave a country where their grandchildren will pay for the greed and the incompetence of the insiders for a third time. And the little under-the-counter strokes, like the Central Bank’s sweetheart deal with Anglo, continue on the basis that the insiders will give the bill to the outsiders yet again, and continue as if nothing happened.
David: If all the people in those graves resurrected tomorrow, noted all the improvements in Dublin since they had died and asked what political party had done this — they would probably vote FF in the next election.
Now that NAMA is going ahead, and whether it is the Betamax or VHS solution to the banking crisis, surely the emphasis should now be on how it is implemented. Particularly it is worrying that so many high profile assets have dropped so much in value (I think the Shankill site is now worth 5% of its original value of €50k an acre if the reports are to be believed). However there will be at least 5 layers of valuation of every NAMA asset (by the banks, NAMA valuers, the NAMA audit co-ordinator, E&Y and an EU investment bank tbc… Read more »
My Father will be gone ten years this September and I don’t have a song really that reminds me of him but REM , Everybody hurts comes to mind http://www.youtube.com/watch?v=pudOFG5X6uA He was of the same generation but he knew how Ireland worked , when I was eighteen he then advised me to join F.F. as ‘they’ would look after me ,we were a F.F. family and related to the Lenihan’s through marriage but with the generation gap I was rebelling and after only one or two trips to the local cumanna branch I even then saw the racket. Twenty years… Read more »
[…] Prominent NAMA arch-critic David McWilliams today decries the greed of those who invested in the sc… […]
David, good, and worrying article. I saw an almost identical situation take place around 5 years ago regarding a similar piece of land in Castleredmond in Midleton – “Dublin prices” as they said at the time. Meanwhile a small development of very nice 4 bedroomed houses popped up opposite where I live. Again, “Dublin prices.” They disappeared, no cars ever appeared and slowly, 6 months later, the sequence of “for sale” signs appeared at prices so obscene I think they never sold even then, and are probably still for sale now, unless there was some Gom stupid enough to buy… Read more »
Constantin re Anglo and on MLRepo’s: http://trueeconomics.blogspot.com/2010/03/economics-12032010-anglos-latest-fun-in.html David, I appreciate your personal note, very much so, and it is important to remember that generation of people who truly built Ireland. I lived in Wicklow some years, and my partner was caring for a elderly Lady with great spirits. She cared for her more than 12 years, every single day. She was 98 when she passed, and we were already living in Donegal. I remember sitting with her in her little house in Kilcoole, listening to her. She was blind, was equipped with an artificial hip and could not really walk… Read more »
David – My sympathies on the passing of your father. We have to fight harder for a 2nd Republic. “…………..Meanwhile, claims that the new financial regulator has been engaged in a sharp exchange of words with some members of the Dail and Seanad have not been denied by the regulator. Brian Lucey, associate professor of Finance at Trinity College, said he understands the financial regulator was heavily rebuffed by some of the Dail and Seanad when he enquired about loans they had with the banks that were being transferred to NAMA in the months ahead. Prof. Lucey said the basis… Read more »
Moyvalley Golf, Hotel and Country Club’s demise is one of thousands of developments born out of the Greedy Tiger era. The only solace to be had for Joe Bloggs with regard to this failed venture is that its original members paid in €100k each for “exclusive” membership back in late 2006 and early 2007. The role call is facinating and yes it is nearly all of the key players that we read about today. The same people now have exclusive membership of the NAMA Club. Now as you approach Moyvalley on the M4 or N4, each lamp post is sporting… Read more »
Hi David, Yes, that ‘project’ in Shankhill which is now 95% down is an example of the ‘irrantional exhuberance’ that was our credit-fuelled property bubble. > we — not they — are going to pay for this greed, through Nama. Yes, that’s what NAMA is. However, where are the outsiders protesting outside the Dail and where are the opposition TD’s on hunger-strike protesting that NAMA should not go ahead???? How come our Bastille is not being stormed? Enter the quirkey world of how the Irish vote. The so-called outsiders WANT to be insiders. They do not want to change the… Read more »
Folks,
do you remember the two shoes incident?
http://www.youtube.com/watch?v=9uIj0YvDBKE
Here is to hoping that may be someone is throwing some sheep droppings at Cowen when he presents the shamrock .
COW & GATE
In Time History will record a New Revelation of Sovereign Fraud never before declared to the Public and the Citizens will rise to fight for Justice.
David said :
‘In the past year, the Irish Central Bank has lent €10 billion to Anglo, using an instrument that it would prefer you knew nothing about. This instrument, called the ‘‘master loan repurchase agreement’’, is a hangover from when we had our own currency. Evidence of its existence is buried deep in the Central Bank’s balance sheet under the ambiguous title ‘‘other assets’’.
We should really question first whether €58 million was actually paid for that site. Surely if you want to develop something like that and expect to fetch close €1 billion for it, one would simply hike up the initial purchase site. Is there anyway one could find out the real price first of all? Where does this €58 million figure come from? And all the other sites in Dublin sold for this type of money? How does anyone know? The problem is that if anyone is naive enough to believe these figures then he/she enjoys in believing it. Anyone will… Read more »
David. Stirring article. Hamlet. A visitation from the ghost of your father infused article reads like to me David. Is it the first visit, the second or the third visit. Your dads generation are been murdered through the ‘improvements ‘ they built. These improvements are been put to use, to pillage and plunder the real wealth of Ireland, in what now looks like, to a degree of swag bagging beyond one wildest imagination. I refer here to the arrangement the ‘insiders’ have managed to swindle outta the ECB to the kerching total amount of 55 billion in total cash. We… Read more »
So, I had a long post written but the Inspiron is in Laptop-ICU these days….. Point is, does NAMA give any exemptions to the current / future owners vis a vis their duties to the local authority under the following area of legislation: – http://www.citizensinformation.ie/categories/environment/planning-and-development-in-ireland/copy_of_derelict_sites_and_dangerous_structures The eagle-eyed among you may recall reading about the fate of a property in athlone that was part-owned by pt McDonagh of supermacs fame. Being derelict and dog-ugly for quite a long time, and said Mr McDonagh being the recipient of numerous letters / notices the building was summarily seized by the local authority. Could… Read more »
Folks, Ratio of male to female unemployment growth across the world from Economix blog – Denmark is striking.
(via Liam Delaney, UCD)
http://nyti.ms/diMnD9
Socialism on course to win out in France 2012. Who knows what will happen in Ireland? The pretend socialist party simply ran a bad electoral strategy in the last beauty contest, as Noel Dempsey knowingly chuckled on tv interviews apres-match. Perhaps the smaller parties will field as many candidates as they can this time around? And rely on the power of online fundraising and social media to sink their teeth into the establishment’s lunch. http://english.aljazeera.net/news/europe/2010/03/201031515311451385.html But as MK1 points out, we have a plethora of gombeenà that voted for the gombeens we currently have. Don’t rely on that to change… Read more »
Expect the Kafka knock at the door……………………
http://www.youtube.com/watch?v=RBp464uBH9A
My definition of hell would be to be on my way only to meet a ‘merry’ Ryan Tubridy at the gate in one of his Late Late suits telling me what a great show was ahead & to stay tuned………….
http://www.guardian.co.uk/business/2010/mar/12/bill-gross-bonds-investor
I hope the bond vigilantes financing our deficit start to get tough on Cowen again ; there is still far too much waste in Irish Government spending.
Paddy
Thanks David yet again for spelling out the corruption which is eating away at every Irish person. My blood pressure went through the roof on reading it Maybe if I went around with my brain swimming in Alcohol I wouldn’t be so angry. In 1984, George Orwell had them drinking Gin. In a “Brave New World” it was Soma. In Ireland it’s Guinness. Open the pubs for them on Good Friday and that’ll keep the majority of the people happy I’m reading “The richest man in babylon”, thanks to RuairÃ. It’s obvious the davy clients never read even the 1st… Read more »
Latest interview……
Chomsky on Activism
http://www.democracynow.org/2010/3/15/noam_chomsky_on_obamas_foreign_policy
I travel on the tube everyday. I take the central line from London City. Almost everyday, there is an investment banker or someone working in finance on the tube beside me. I glance over their shoulders to see what they are reading, and most of the time it’s something about CDS’s, short strategies, futures trading, carbon trading etc.. These people add no value to society. The invent nothing, the drive up prices of commodities. Why are they allowed to get away with it? The city is a giant casino. Except it’s a casino with different rules. The gamblers never lose,… Read more »
Somebody earlier mentioned SF, I have lost any respect that I’ve had for that party.
Jerry, Martin and his cronies have been fighting the British for hundreds of years, the British have never been the threath to Ireland that the current lot are, ie Corrupt Politicians,Bankers, Property developers etc.
To quote Martin ” the Boys have not gone away you know” Wonder what they are doing. not heard of any badly beaten politician,banker, or property developer found along the Border recently.
Posters.
This guy is a real digger for the real info, michael lewis.
http://www.huffingtonpost.com/2010/03/14/michael-lewis-wall-street_n_498690.html
No mention in the New Zealand news of anything constructive from Mary Harney, but lots of coverage to Lady Gaga.
Interesting Tweet by the INOU (@INOUIreland) “Interesting video about the RobinHoodTax initiative in the UK. Could Ireland do this as well? http://tiny.cc/zvmdu and http://tiny.cc/Y8Mjm” Now when me aul British comrade come up with a good idea, it’s time to ape it! A micro-tax on merchant banking activities. Wait a minute, we haven’t got their scale…… But, we have NAMA! So, for God’s sake, if this government don’t want to be remembered by their sons and daughters when they are dead and gone, as the men and women who gave away what was not theirs then please tweak NAMA to within… Read more »
Should be constructive or otherwise.
There are rumours, and now they’re only rumours………! ……….that Furrylugs and Tull McAdoo were both separately invited by the other to a hidden shebeen high in the Munster mountains. One onlooker said they were approached by a man with a Marx-like moustache pointing a revolver, accompanied by a sadist with a Nazi-style walking stick knife-weapon and ushered into a black mercedes (driven by the moustached one on his spanking new driving licence!). Rumour has it they are being delivered to the K Club for debriefing and interrogation by Dan McLaughlin and John Fitzgerald and Peter Bacon for what they know… Read more »
PERSONAL SIDENOTE Folks, I am sure all of you have your ways to deal with all that BS we are presented in the past 20 months. At times, I admit I find it hard to digest and the very nature of the subjects we discuss here are extremely depressing. Personally, when I just had enough of it, like yesterday, I just fire up my keyboards and computer, start improvising some music, and record that session. Then I take snippets from that session that I think are worthwhile and give them to friends. I hope this is ok with you David,… Read more »
I have heard from a very close source to the bank(Anglo)…an employee..that employees in ‘key’ positions in the bank received large wage increases very recently…serious.
Ruairà says Additionally Crest, from the great man himself, General Michael Collins: – “The course of life and labour reminds me of a long journey I once took on the railway. Suddenly, there was a breakdown ahead, and passengers took the event in various ways. Some of them sat still resignedly, and never said a word. Others again, went to sleep. But some of us leaped out of that train, and ran on ahead to clear the road of all obstructions” Michael Collins grave must be an unquiet one..at present. If he were only to erupt forth from the clay,… Read more »
All your articles are splendid David, they just keep getting better and better.
I don’t think it has sunk in to the average man just what this NAMA “Black Hole vortex of public money, entails in consequences.
Fianna Fail will probably have left office before the serious street riots begin.(Pity Gilmore & Kenny )
I don’t think the gang in Leinster House have even begun to see where it is leading the nation.
I don’t think Brussels know either.
The Japanese experience X 3, or worse?
Morning,
Thanks for all the comments over the past week. I am getting the idea that people are beginning to see through the scam that is NAMA.
On other matters I am revamping the website, is there anything I should be putting on the homepage to make tit easier to navigate?
Best and thanks David
The Take
http://video.google.com/videoplay?docid=8149373547373833649#
suggestions for site:
1. one page (as it was originally)
2. no nesting: newest comments at bottom of page in chronological order, if necessary referring to post. no. if in reply to it
3. search facility for archives
4. for some reason I can’t print this blog off but have to transfer it to Word first – it’ll print first page but nothing else.
I think the significance of this lending is that nearly all the €10bn is lost. I thought this would happen when NAMA starts transferring loans in a few days time. It’s like seeking a final stay of execution only to find out that the prisoner has already been hanged on the quiet.
I always convert these sums of money into cost per person. So, there are three of us in our house, and 4m pop., which means we’ll have given Anglo 7.5k. When you factor in interest etc, let’s say 15k?
Kevin Myers raised the subject of a new national anthem recently. (Andrew Mooney provided a link I recall). Our official anthem (Gaelic) should be an tAmhrán Bréagach (which as the name suggests is all lies and exaggeration) suitably updated. We would need a rugby anthem also. I don’t know what the words would be but the title is: “C’mon, guys!” But I have found the words for the main anthem: http://www.lyred.com/lyrics/Kaiser+Chiefs/Yours+Truly,Angry+Mob/The+Angry+Mob/ I don’t know what it sounds like. Has anyone heard it? Here’s some of it: We are the angry mob We read the papers every day We like who… Read more »
http://www.peconference.org/ Just got an email from Intertrade Ireland “The Conference comes at an important time for entrepreneurial businesses. The current economic environment is the most challenging in decades but there remains equity finance available for the best companies. Additional seed funding has been made available and private investors are becoming yet more professional through the business angel networks. Even the very best early-stage companies have to raise their game to attract funding. The Conference will showcase the current sources of equity capital (both institutional and the business angel networks) on the Island as well as providing a platform for four… Read more »
Evening, To those commentators who have suggested that there is a difference between mezzanine financiers and senior debt holders and thus the article is unfounded, I’d advice you to have a gander at international episodes of distressed debt trading. At the beginning of a debt deflation cycle the legal/corporate finance niceties of the boom tend to be thrown out as if theses will protect the senior debt holders. Then it becomes apparent that the debtor has not means to pay the debt and the underlying asset is marked down. My experience in emerging markets (of which Ireland has all the… Read more »
Folks, there are so many reasons to spend 15 minutes watching this:
The Governator on Ireland and Business
http://tweetcast.in/
What of the property investors who do not falll into the NAMA bracket, these people are all over the country, greedy people who borrowed to buy several properties to rent them out to mainly immigrants. On the frontline we got a glimpse of them , they are not so cock sure of themselves any more. If you are going to be an investor gamble on the stock market , people rarely borrow money to do this so they only lose what they have invested and it is a liquid form of investment. Gambling on borrowed money in an illiquid asset… Read more »
Marking D Kettle – I think in our words to deliver the plain truth in an easy way we should focus on the the most important word …MARKET . It is this word that explains where our true destiny does shine .In this word the energy of nature flows and that we must watch in awe of its beauty as it passes .Holding our breath is not enough we must sing its praise and glory and worship its regal tenure in our presence .Nothing can stop the forces of the MARKET as it flows past us in all its glory… Read more »
John ALLEN, Philip.
On the market having its way, maybe NAMA will explode into smithereens if the Euro collapses under the weight of the PIG s arse sitting on Germany s powerful economy paying the PIG s bill will be to much for the euro s existence and bye bye NAMA lunatic scam.
BrendanW.
my ‘david kill NAMA goliath’ metaphor is not putting the burden onto D it was a use of the biblical metaphor.
Appreciate comment all the same though.
paddythepig, “Tim, can you produce evidence that engineers are paid ‘multiples of a teachers salary’. More throw-away comments from you methinks.” I *can* produce that evidence, Paddy. You know that I can, because I produced it for you about 2 years ago, here. I also produced evidence that engineers left county councils in droves, to accept jobs in the private sector at multiples of their public-sector earnings, as well. You seem to ignore all evidence that I (or anyone here, or anywhere else), produces beacuse it does not seem to suit your private-sector-government-and-media-spin-and-lies-ideology. I have spent my time here trying… Read more »
Folks, Colm McCarthy’s rant in the SBP, in case you missed it:
http://www.sbpost.ie/newsfeatures/taskforce-plan-is-a-flight-of-pure-fantasy-47934.html
—- CAMP NAMA —- A Black Room in Kildare street? Ok you might ask, what happened to him now? Camp Nama? May be a case of pre St.Patricks day increased alcohol levels, or what is he on about? …. Let me explain…. See, today I was speaking with an ex US marine corps member, who is suffering not only severely from PTSD as result of his tours of duty, but tragically also lost both legs. When I lived in the US I was also in contact with ex Military Intelligence members and listened to their stories, they were in Vietnam.… Read more »
—- FRESHFIELDS —- The Puppeteers Executioners Round about 15 globally acting banks are the main Puppeteers in this Heist we see unfold. I already pointed to GS in another post, so lets look at another member of this club. UBS Switzerland. This monday UBS reported that the salaries of their top managers multiplied by factor 7 in 2009. UBS in Switzerland was bailed out with Taxpayers money! In 2009 they signed losses of accumulated 2.9 billion franks, but at the same time they have accumulated bonus savings to be pay out to management, in the same amount, three billion franks… Read more »
Þm
I like the above symbol .To me it signifies
‘the market’ .
If we focus on the market we kill the nama virus .So lets use our new symbol
Þm
Its St. Patricks day and we must reclaim the letters of his followers back then to be our own again.We have ‘today’ as a nation reclaimed our distinction above the nations of the world that no one else has done before as we have also with the colour ‘green’ taken monopoly of part of the sun ray colours thats sets us apart .We have a legacy that the Irish people must use and recognise to be their own.
Investopedia
I received by e-mail the following from the above this morning :
A Lepracaun Leader :
What does it mean ?
A corporate manager or an executive who, like the fabled Irish elf, is a mischievous and elusive creature said to possess buried treasures of money and gold.
Also spelled “Lepre-con Leader”.
This is american sourced and who were they refering to?