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FG claim Soros,Stiglitz etc support their bank plan- do they ?


cyberianpan

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FG supported the original bank guarantee, and then came up witha pretty weak banking crisis plan last May. They keep flogging this meager 4.5 page Word document.

Now they claim George Soros, Professor Stiglitz, Dermot Desmond, David McWilliams, and Michael O'Sullivan support it:

Irish Times
Fine Gael finance spokesman Richard Bruton welcomed the intervention of Prof Stiglitz.

"Together with George Soros, Professor Stiglitz is one of the prominent advocates of Fine Gael's 'good bank' solution to fixing the banks. He joins financier Dermot Desmond, commentator David McWilliams, and Michael O'Sullivan of Credit Suisse Private Bank, among others," Mr Bruton said.
Their plan was rubbished by Karl Whelan here, and on that same thread you'll see Brian Lucey hauling up Andrew McDowell on the detail of the plan (FG were very confused about what bonds were what). Andrew McDowell is of course an ex quangocrat (Forfás) and now as Fine Gael's chief economist is the author of their crazy banking plan.

Do FG have any proof that Soros,Desmond,Stiglitz & McWilliams specifically support their plan ? I haven't seen any, and doubt it exists.

cYp
 

meriwether2

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FG supported the original bank guarantee
And? Whats the relevance of this to NAMA?

and then came up witha pretty weak banking crisis plan last May
And they have expanded substantially on this since. Why forget this?

Secondly, I hasten to point out that in your opinion it is 'weak'.

I happen to believe that the Good bank/bad bank proposal, while imperfect, is a far better alternative that NAMA.

I admire the concerted attack on NAMA by certain sectors, and the blind dismissal of FG's proposal as unrealistic, and that Nama is the only game in town.
In a sense, it has unnerved FG. The proposal is too complex for the general public to digest in any great sense, meaning it is virtually impossible to get public support behind it.

Nama's strehgth is that it is easily understood in principle, and easily explained. The debate has now moved on to ways of improving Nama, rather than dumping it or not.
That has been FF's biggest victory thus far.

The good bank/bad bank plan is too revolutionary to be accrptable?
No AIB and BOI anymore? Heavens! Better just saddle the taxpayer and reinflate the property bubble.
Easier to understand.
 

Rocky

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They support the principle of the plan. As Fine Gael isn’t in government, their plan was only developed and written by a very small number of people and it is vague and there are holes in it, but that’s to be expected. If they were government they like Fianna Fail would have a whole department of Finance and the ability to contract British financial firms like the government does, so they would obviously be in a position to flesh it out, improve it and fill in the holes.
 

cyberianpan

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Do political parties generally release policy documents to the public in the form of 200+ page tomes?
As I said above the plan was ridiculed by some of the foremost Irish banking experts, and it was clear from their confusing the bond types that they hadn't done their backing homework.

Biggest ever government policy decision in Ireland - FG's response ? : "ah sure lads knock off a 5 pager before ye go to the pub tonight will ye ?"

As I've pointed out on numerous other threads, David McWilliams has consistently called for all of the key aspects of the FG plan to be implemented as an alternative to NAMA - without actually endorsing Fine Gael.
Now now, endorsing aspects of a plan is not endorsing the plan. I think Bruton's been caught out here ... and caught out badly.

cYp
 

Nick Leeson

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I have just finished digesting that FG 4.5 page document.

It's a crock of shít for 2 main reasons:

a) it would cost nearly as much as nationalisation to implement
b) if we could afford to implement it, it would be nearly impossible to do because it is so complex

NAMA is a far better plan. It is the cheapest and simplest plan I have seen.

And the beauty about NAMA, compared with FG's 2 track idea and nationalisation, is that if NAMA makes a mistake in its pricing, it can just let the assets sit there for as long as is needed to eventually recoup the cost.

FG's model and nationalisation requires much more money upfront, and exposes the state to greater risks than NAMA.
 

bormotello

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a) it would cost nearly as much as nationalisation to implement
True
There is only one small difference
In case of NAMA all taxpayers money will go to bondholders
In case of FG plan most all money will go into Irish economy

b) if we could afford to implement it, it would be nearly impossible to do because it is so complex
Not really
You can nationalize one more bank, BoI or TSB for example and then everything will be easier





NAMA is a far better plan. It is the cheapest and simplest plan I have seen.
Because our kids will pay for it
 

cyberianpan

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In case of NAMA all taxpayers money will go to bondholders
In case of FG plan most all money will go into Irish economy
The FG plan is loony and should have died the day it was launched,

Irish Economy

Karl Whelan
We will be left with the zombiest banking system in the world
...
At this point, I’ve lost track of why FG think the zombie banks would do this.
...
I’m sympathetic to what FG want to achieve here but the plan strikes me as potentially a recipe for chaos if adopted.


On that same thread you'll find various comments by Brian Lucey where he rips to shreds the crazy FG notion that the bondholders will absorb the loss:

Brian Lucey
The idea of getting risk capital to absorb risk is entirely appropriate. However, FG in their document have a table which I find hard to understand. It suggests that there is between 50 and 75b in risk capital in AIB and BOI.
...
Thats the total amount of Risk Capital they have. BOI is similar. So the total is not 50-75b, its closer to 30b. But they have to operate under a binding regulatory regime, so thatis not all available for absorbing losses (about 1/3 only I suspect) before the banks need more capital or cease trading or massively contract other risk assets (aka a credit crunch). The only source is the state.
...
1) the 1-5y bonds are , mostly, for liquidity purposes and are not strictly sensu capital.
...
3) Starting a bank is a non-trivial administrative and legal task, unless its proposed to amend significantly the banking acts. It cannot, I submit, be done in 4-6 weeks indicated


The FG plan was extremely peculiar stuff , that aside the topic of this thread is:

Do FG have any proof that Soros,Desmond,Stiglitz & McWilliams specifically support their plan ? I haven't seen any, and doubt it exists.


cYp
 

Nick Leeson

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True
There is only one small difference
In case of NAMA all taxpayers money will go to bondholders
In case of FG plan most all money will go into Irish economy
Wrong. The NAMA bonds sold by the banks to the ECB will allow the banks to:
a) replace existing debt with cheaper debt
b) buy back Government pref shares

The FG plan doesn't pump money into the economy, as the "pumping" is still at the discretion of the banks. Banks don't pump money into economies in recession. It's risky, and FG know this.


Not really
You can nationalize one more bank, BoI or TSB for example and then everything will be easier
I don't get what you are saying. Can you clarify your point in relation to what I said.


Because our kids will pay for it
Kids don't pay for NAMA, NAMA pays for NAMA. That's the whole point of it. The NAMA assets are managed by NAMA until such time as they break even (or turn a profit).

Nationalisation and FG's plan would require huge borrowings, but unlike NAMA, these plans would require more expensive borrowing up front. The funding cost of this type of borrowing would be greater than NAMA.
 

bormotello

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Wrong. The NAMA bonds sold by the banks to the ECB will allow the banks to:
a) replace existing debt with cheaper debt
b) buy back Government pref shares
Why do we need nearly dead banks, if we can create new one without existing problems?

The FG plan doesn't pump money into the economy, as the "pumping" is still at the discretion of the banks. Banks don't pump money into economies in recession. It's risky, and FG know this.
Fine, what is reason to save banks if banks are not going to pump money into economy?

I don't get what you are saying. Can you clarify your point in relation to what I said.
Big disadvantage of FG plan is lack of infrastructure
Nationalization of one bank can solve it



Kids don't pay for NAMA, NAMA pays for NAMA. That's the whole point of it. The NAMA assets are managed by NAMA until such time as they break even (or turn a profit).
This point is valid only in case if construction industry would be killed tomorrow.
But in reality developers are giving oversupply to taxpayers and beginning to build another property bubble again.
Main idea of NAMA is to pass oversupply to taxpayers and flood market by new properties

After 10 years time we will realize that there is no market for NAMA assets, because market will be already flooded by new developments. As result kids will pay for stupidity of their parents
 

bormotello

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The FG plan is loony and should have died the day it was launched,
I would agree with you if you wrote

The FG is loony and should have died the day it was launched,

Who else, except Karl Whelan and Brian Lucey criticized FG plan?
 

cyberianpan

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Who else, except Karl Whelan and Brian Lucey criticized FG plan?
I'm not sure, but those are 2 fairly prominent critics, also Lucey destroyed the FG figures on the thread. But the real issue here is not who criticizes it, but who supports it:

Fine Gael finance spokesman Richard Bruton welcomed the intervention of Prof Stiglitz.

"Together with George Soros, Professor Stiglitz is one of the prominent advocates of Fine Gael's 'good bank' solution to fixing the banks. He joins financier Dermot Desmond, commentator David McWilliams, and Michael O'Sullivan of Credit Suisse Private Bank, among others," Mr Bruton said.
Do George Soros & Professor Stiglitz know that they support a loony 4.5 page plan ?

cYp
 

bormotello

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I'm not sure, but those are 2 fairly prominent critics, also Lucey destroyed the FG figures on the thread. But the real issue here is not who criticizes it, but who supports it:
cYp
How many economists support NAMA?

I am not a big fan of FG plan, but it has one right idea

Existing bad banks must be destroyed with minimum cost to taxpayers, ie. “Carthago delenda est”
 

cyberianpan

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How many economists support NAMA?

I am not a big fan of FG plan, but it has one right idea

Existing bad banks must be destroyed with minimum cost to taxpayers, ie. “Carthago delenda est”
Whelan, Gurdgiev and others would support Nama & Nationalisation, their problem lies primarily with the pricing/risk sharing.

Karl Whelan
First, Sarah frames the debate as nationalisation versus NAMA. However, both than 20 guys piece and my earlier four-point plan proposed that a NAMA-like vehicle be used in conjunction with nationalisation, s
But this thread is about Bruton's dodgy claims:
Fine Gael finance spokesman Richard Bruton welcomed the intervention of Prof Stiglitz.

"Together with George Soros, Professor Stiglitz is one of the prominent advocates of Fine Gael's 'good bank' solution to fixing the banks. He joins financier Dermot Desmond, commentator David McWilliams, and Michael O'Sullivan of Credit Suisse Private Bank, among others," Mr Bruton said.
Has he proof of the above ?

cYp
 

Eamonn76

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Stiglitz has said let the banks deal with their own problems. So have FG. The difference is FG want to set up a good bank to get credit going, which is necessary for Ireland. The FG plan can be improved. Pre-privatise BOI. Now we have a national bank and are in a strong position to deal with AIB. Wipe out shareholders. Make a deal with AIB bondholders. Now we have a banking system. Anglo & Nationwide were Casino banks. Let the bondholders have them.

Stiglitz has denounced Nama as criminal. Lenihan is a dishonest fool. We can't go ahead with Nama.
 

Rocky

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Whelan, Gurdgiev and others would support Nama & Nationalisation, their problem lies primarily with the pricing/risk sharing.



But this thread is about Bruton's dodgy claims:


Has he proof of the above ?

cYp
They've all called for a good bank, which is FG's idea.

As I presume you already know Whelan and Lucey have both also attacked NAMA along with a hell of lot of other economist e.g. the rest of the 46, so it isn't much good to you that they don't like FG's idea either.
 

culbair

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FG supported the original bank guarantee, and then came up witha pretty weak banking crisis plan last May. They keep flogging this meager 4.5 page Word document.

Now they claim George Soros, Professor Stiglitz, Dermot Desmond, David McWilliams, and Michael O'Sullivan support it:



Their plan was rubbished by Karl Whelan here, and on that same thread you'll see Brian Lucey hauling up Andrew McDowell on the detail of the plan (FG were very confused about what bonds were what). Andrew McDowell is of course an ex quangocrat (Forfás) and now as Fine Gael's chief economist is the author of their crazy banking plan.

Do FG have any proof that Soros,Desmond,Stiglitz & McWilliams specifically support their plan ? I haven't seen any, and doubt it exists.

cYp
And your REAL agenda is? NAMA as presently constituted is a bankers dream and a taxpayers nightmare. Of course the stock broking cheerleaders for NAMA are not concerned with the taxpayers.
Whelan and Gurdgiev do NOT support NAMA.
 
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