Madam, – I am having great difficulty understanding the argument for nationalising the banks instead of pursuing Nama. Banks are profit-driven institutions, and they make their profits by lending money with interest. The only reason they are not engaged in this act of lending right now is because they do not know how much capital they are going to need to cover their write-downs. Hence they are hoarding it.
However, once we get these potential write-downs off their balance sheets, they will have no reason not to lend money. Indeed, their shareholders will insist that they do so and their executives, who wish to be paid profit-related bonuses, will be happy to oblige. Their is no need to own them in order to direct them to lend.
The only reason I can think of for supporting alternatives to Nama is the Opposition smelling the potential for bringing down the Government on this issue if they spread enough confusion and hence fear. – Yours, etc,
Madam, – Alan Ahearne (Home News, August 26th) says the views of 46 economists criticising Nama (Opinion) was based on careless use of numbers. This Government has for years used the back of an envelope to do their sums and now they want us to trust them. Should we rather listen to two economists and Government advisers (Dr Peter Bacon and Mr Ahearne) or the 46 economists who share the same view? I urge the Government to put Nama to a referendum to see if the ordinary citizens of this country agree with them or not. – Yours, etc,
Madam, – The Minister for Finance has been explaining in recent days that Nama will use a property valuation formula based on long-term (since the 1970s) historic trends in property prices.
I would suggest there’s potentially a fundamental flaw in such an approach, which relates to our change of currency. Property price escalation up to the Celtic Tiger era were in Irish Pounds, a softish, relatively high-inflation currency. Since the late 1990s we have been using a hard currency, the euro. To project forward property price increases in euro on the same basis as historic price increases in Irish Pounds would be an error. International experience shows that property prices in hard-currency zones increase much more slowly than they do in soft-currency areas.
We sold our house in Germany in 1995. You could buy that house today for the same price that we sold it for 14 years ago.
The situation in Japan is even more extreme, prices being significantly lower than they were 20 years ago.
If Nama tries to tell us that property prices in euro will escalate over the next seven years, or whatever period it proposes to use, at the same rate as they did in the 1970s, 1980s and 1990s in Irish Pounds, then I for one just won’t believe it. – Yours, etc,
Madam, – Fintan O Toole’s devastatingly insightful analysis (Opinion, August 25th) has surely holed the good ship Nama below the waterline. He conclusively shows that the only way Nama can work is to pay over the odds for €90 billion odd of dodgy loans and then hope that the property bubble can be re-inflated.
From the taxpayers’ and the country’s stance it’s a “lose/lose” situation. – Yours, etc,
Madam, – Fintan O’Toole said in his column (Opinion, August 25th) that you can’t set up Nama if you ever hope to implement the 1970s Kenny report. Not necessarily so.
Local authorities can still buy agricultural land at 25 per cent over the going rate, while Nama establishes a market price for the same land independently. The local authority can then offer that land for sale on the open market at more or less the Nama price. The net effect is that instead of land owners profiting from rezoning the local authorities will.
What they do with the profit is another matter, but an obvious option would be to use it to fund the infrastructure projects now left high and dry by the starved National Development Plan. – Yours, etc,
A chara, – I now know what they did to the famous tent at the Galway Races. They moved it to Dublin and renamed it Nama. – Is mise,
Madam, – I’ve just heard Alan Ahearne say that Nama will wash its face. I’ve read about companies and banks taking haircuts; the National Women’s Council of Ireland is obsessing about men in suits and shiny shoes and women in pyjamas. This concern with personal appearance and sartorial standards reflects matriarchal values: “get that hair cut”; “don’t go out in those runners”; “brush your teeth”. Has the feminist revolution defeated patriarchy and no one has noticed? – Yours, etc,
Madam, – 46 academic economists in agreement (Opinion, August 26th). Is this a record? – Yours, etc,