brian clayton

Let me open by saying this isn’t my thing. I’m not into politics unless I’m in the pub. Of course, when I’m in the pub I’m an expert in everything.

I’m strongly against NAMA. In order to explain why, I’ll explain what it means to me. This may be wrong, but it’s what it means to me.
Banks lend money to people to buy houses. Banks borrow this money from other banks, they don’t actually have this money themselves. Uber banks do.
When a bank takes money from an Uber bank, they effectively buy it. They then chose a customer, theoretically of good standing (more on this later) and give them the money. The bank hopes that the customer will pay them the sum back, plus a huge whack of interest. This will cover the initial cost of the money they took from the uberbank and give them a healthy profit. If the customer doesn’t pay them back, they take the house (or whatever) and sell it – thus paying the initial stake and gaining a healthy profit.

The customer being of good standing is obviously important. This is why you need to prove to the bank that you have a job, you’re going to pay them back, the thing you’re trying to buy is worth the money you’re paying for it (more on this later) and so on. If any of these things go wrong, the banks trust in the customer looks dodgy. Would you lend a lunch time fiver to Tim from accounts who’s boring but reliable – or to Teddy from up on 4 who’s a bit of rough, but always seems broke?
Banks have strict rules to try to ensure that they only chose good customers. Countries have institutions that look after their banks and make sure they’re following the rules.

A few years ago, it became very easy for banks to get money from uber banks. Very, very easy. All of a sudden, banks were handing out more money to customers to buy things than ever before. And the rules started to be relaxed. You no longer needed to save a deposit – you could get a loan for 100% (more even) of the price of the house. You could claim you’d take in lodgers and so on. Lots of people started buying property. As a result – the price of property went up. Up and up and up to the celtic tiger’s eye level.
All this buying was done on money bought and borrowed from banks and uber banks.
But this was ok – it was all secured against houses remember? The banks could always take the houses from poor customers and sell them and give the money to the uberbanks. But – and here’s one problem. That only works if you can sell the houses for the price the person bought them for. In other words – the banks need more than the purchase price of the house (to cover initial stake plus costs and maybe even a profit) from the person. But, much of the value of the houses was based on debt – the money bought and lent.

I don’t pretend to know why the bubble started to burst . It doesn’t matter – what matters is that the uber banks started to run out of money to give the banks, and the banks couldn’t do anything about it. They’d sold on all the money (by turning it into property) and now they don’t have any. The Celtic Tiger turned out to be a kitten. The value of all the houses and apartments and holiday homes dropped significantly, so all of a sudden they have all these loans out – and they’re never going to get the money back. If you look at the balance sheets now, with the new values for the property, they’re all many billions in debt.

This is where things start. The economy is stalled and the government has now decided to step in.
They want to take all this nasty wrong way round balance sheet form the banks. They’ll take the debt, chop it in half (or some other notional amount) and mind it for the banks. This will, they feel, allow the banks to get back to what they allegedly do best. Lending money. The problem I have is – I’m a shareholder in the government. So are you. (I’m assuming you’re an irish citizen – if you’re not – you’re better off out of this).
If my government buys stupid debt from the banks – I’m buying it. If the goverment is losing money with stupid investments – I’m losing money. This will take money out of my pocket. It will cost me a fortune. That I don’t have. I don’t have any debt. I couldn’t afford to buy a house during the boom. I avoided all that by working hard and saving. And now, the government proposes to set up an agency called NAMA, that will forgive the banks for their apalling greed-fuelled mistakes by charging me for it!

No then, to NAMA.

p.s. I realise this is grossly simplified. but I’m a simple person, and I work hard for my money. I’ll waste it – I don’t need the government or any other organisation wasting it for me.

p.p.s. I don’t like to do blog posts without pictures. So here’s my wallet.
Stay the hell out of it stupid government. Let the banks reap what they sow.

no governments allowed