Posts Tagged property

The Man Who Invented NAMA is a Property Developer

It seems Dr. Peter Bacon, the man who Fianna Fail turned to for an answer to the property-loan banking crisis and who has come up with NAMA is a bit of an academic shill for hire:

The cost of the report to Longford County Council was around €25,000-€30,000. … A substantial portion of this was contributed by an anonymous donor — believed to be Longford-born builder Joe O’Reilly.

He is, of course, a long-standing beneficiary of contracts from FF governments:

Close to former Taoiseach Bertie Ahern, his economic consultancy, Peter Bacon & Associates, picked up a steady stream of public contracts even after the Government’s change of tack on housing policy.

The best part is that he has had, extensive interests in property development companies himself. If he does not hold shares still (unusual for board members to not be compensated with shares), then he certainly must have many friends in an industry that will no doubt be a source of revenue to him again in the future:

Peter Bacon … former board member of Ballymore Properties, one of the property developers now in the spotlight,

So the plan to have all the bad property loans offloaded to the Irish state was invented by a man who quite probably is a Fianna Fail crony amd a man who besmirches his academic title through shilling. A man who definitely has very close ties to the property developers.

Why are we letting Fianna Fail “fix” this problem with this destructive plan? Why don’t the Greens walk out and let the country vote?

(And yes, I’m a bit late to this revelation)

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Quick Guide to Rescuing Banks and NAMA

Based on my layman’s reading of various articles out there, here’s my rough but hopefully representative guide to rescuing banks:

     Good <---------------------------------------> Bad
     re-capitalise            do              overpay
     through                nothing         massively for
     equity                                 bad debts of
     investment                            unknown value

On the left-hand side is rescuing banks by the state investing in equity (i.e. buying shares) and potentially acquiring it completely (nationalisation) to later spin-off the good bits back into private ownership (Buiter’s “good bank”) and wind-down the bad bits. This approach has been tested before in Sweden’s banking crisis, and is currently working quite well in the UK.

On the right-hand side is where you overpay the banks massively for bad debts, with no more than a vague promise that you might try recover some of the losses in levies if the losses are too huge, and where you get no stake in the future profits the banks will make thanks to your rescue. I.e. NAMA (or SCAMA?).

“Oh, but do you really want the governments to run a bank?” – Well, do you want the government to (part-)own an existing bank through shares, or do you really prefer the government to have to setup from scratch an agency, complete with political appointments, to directly manage a very big lump of loans and property?

It seems only Green Party members can save us.

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