AIB bank wants to extend the bank guarantee for another 12 months

[disability student]

Link:http://www.rte.ie/news/2010/0804/aib.html

AIB wants to extend the bank guarantee for another 12 months.

They didn't sell their assets quickly as they would have liked.

That is all part of the new capital requirements imposed by the FR.

AIB expects to do lot of job cuttings and streamling their business .. for want of a better word.. downsizing their business.

[Cassandra Syndrome]

AIB customers should ask for a 12 month guarantee as well.

Are they for real? They enjoyed capitalism on the way up, but expect socialism on the way down. Risk and expected utility concepts? Not with banks, the house always wins!

[TotalMayhem]

desperate ...

AIB "would reluctantly follow Bank of Ireland by increasing standard variable mortgages."

AIB "hopes to announce potential buyers for its Polish and UK businesses by the end of next month."

jaysas, is this AIB trying to restore confidence? they're trying to sell this junk for two years and now they have hopes to announce potential buyers and yet they're calling for an extension of the guarantee. in other words, AIB is completely banjaxed.

[Cassandra Syndrome]

The Exchequer Returns for July release this evening should give the Pollyannas in RTE a torrid Six One news.

[Cassandra Syndrome]

desperate ...

AIB "would reluctantly follow Bank of Ireland by increasing standard variable mortgages."

AIB "hopes to announce potential buyers for its Polish and UK businesses by the end of next month."

jaysas, they're trying to sell this junk for two years and now they have hopes to announce potential buyers and yet they're calling for an extension of the guarantee? in other words, AIB is completely banjaxed.

Nobody wants to invest in them with the end of the year state deadline feature attached. If you invest now and nobody else does, the state will dillute come the new year.
Stupid move by Lenihan again, its classic game theory psychology, but don't be mentioning any of them fancy terms to the Department of Finance, money simply grows on trees.

[disability student]

desperate ...

AIB "would reluctantly follow Bank of Ireland by increasing standard variable mortgages."

AIB "hopes to announce potential buyers for its Polish and UK businesses by the end of next month."

jaysas, they're trying to sell this junk for two years and now they have hopes to announce potential buyers and yet they're calling for an extension of the guarantee? in other words, AIB is completely banjaxed.

Perhaps no one wants to buy their over priced assets just like kops where their over priced assets the fecking yanks was hoping for a bigger whopping profits re sale. Same applies to the AIB bank as perhaps Cloin Doherty may be removed due to his poor leadership performamce.

Their deposit rates are very low at the moment as they need to raise their variable mortgage rate to cover their ' loss' as they are a state bank after all.

Will Lendahand stop this all mortgage interest rates for the benefit of the customers who were ultimately taxpayers at the end of the day??

[disability student]

Nobody wants to invest in them with the end of the year state deadline feature attached. If you invest now and nobody else does, the state will dillute come the new year.
Stupid move by Lenihan again, its classic game theory psychology, but don't be mentioning any of them fancy terms to the Department of Finance, money simply grows on trees.

Game theory is all the rage nowadays.:D:D

[DCon]

I want 1,000,000 euros from the State. I will never pay it back.

What are my chances?

[Cassandra Syndrome]

Game theory is all the rage nowadays.:D:D

I knew you were going to post that!

I should have confessed.....

[disability student]

I knew you were going to post that!

I should have confessed.....

Once we have to thank Nash for this idea as it shaped the business Corporate strategy of playing the game against their competitors/rivals.

I was asked a question re Game theory in Economic exam paper.

Nash's idea was mainly mathematics -it won him a nobel prize for Economics !!!! Strange times indeed back then.

[Cassandra Syndrome]

Once we have to thank Nash for this idea as it shaped the business Corporate strategy of playing the game against their competitors/rivals.

I was asked a question re Game theory in Economic exam paper.

Nash's idea was mainly mathematics -it won him a nobel prize for Economics !!!! Strange times indeed back then.

1 shot games are interesting. I like the husband-wife game were altruism makes them do the opposite what they were wanting in the first place. That can happen on certain occasions!

The path dependent one though is very useful in real life, as it involves multiple games over time. The one shot can be limited.

[antiestablishmentarian]

Probably has something to do with this: http://www.irishtimes.com/newspaper/breaking/2010/0804/breaking5.html?via=mr

[disability student]

1 shot games are interesting. I like the husband-wife game were altruism makes them do the opposite what they were wanting in the first place. That can happen on certain occasions!

The path dependent one though is very useful in real life, as it involves multiple games over time. The one shot can be limited.

It's strange that his mental illness created this mathematic idea which was/is schzio at times .. planining what the rivals are thinking etc (paranoid ..)..planning ahead of their rivals . I think it suits duopoly or olgipolies companies but not perfect competition.

Although Economics isn't my strong suit as i loathe econometrics as much as it turn me off. Mathematical model isn't necessary a solution for all the Economic forecasting ill's.

[TotalMayhem]

Economics is a pseudo science and has never provided a solution to anything.


The most confused of any putative authorities are the academic economists, lost in the wilderness of their models and equations and their quaint expectations of the way things ought to go if you can tweak numbers. These are the people who believe with the faith of little children that if you can measure anything you can control it. They will go down in history as the greatest convocation of clowns ever assembled, surpassing all the collected alchemists, priests, and vizeers employed in the 1500 years following the fall of Rome.

JHK @ Clusterf*ck Nation (http://kunstler.com/blog/2010/07/what-is-it.html)

[ang]

Why are we doing this :confused::mad:

[DCon]

Why are we doing this :confused::mad:

Because the banks have lost people's savings and if people (especially the mega mega rich) are told their cash is gone there will be riots.

[Cassandra Syndrome]

Economics is a pseudo science and has never provided a solution to anything.



JHK @ Clusterf*ck Nation (http://kunstler.com/blog/2010/07/what-is-it.html)

It is a social science about scarce resources. Its like saying English is a pseudo language. We still have to use it to communicate.

Same with economics, there are hundreds of schools of thoughts on how we allocate scarce resources between 6.8 Billion people. That's reality. Until we make replicators like they have on Star Trek, we have to try and make do with what we have under our feet to survive and make our lives as happy as possible.

[disability student]

It is a social science about scarce resources. Its like saying English is a pseudo language. We still have to use it to communicate.

Same with economics, there are hundreds of schools of thoughts on how we allocate scarce resources between 6.8 Billion people. That's reality. Until we make replicators like they have on Star Trek, we have to try and make do with what we have under our feet to survive and make our lives as happy as possible.

They would have to think outside of the box as new branch of economics is sprouting up .. Health economics as i have no desire to study these. It's boring me !!:o:p

[Cassandra Syndrome]

It's strange that his mental illness created this mathematic idea which was/is schzio at times .. planining what the rivals are thinking etc (paranoid ..)..planning ahead of their rivals . I think it suits duopoly or olgipolies companies but not perfect competition.

Although Economics isn't my strong suit as i loathe econometrics as much as it turn me off. Mathematical model isn't necessary a solution for all the Economic forecasting ill's.

Most geniuses are nuts. Rothbard was as mad as a bucket of frogs, but in a good eccentric sense. One needs that to perceive the improbable from the matrix of life. Einstein was eccentric as well for example.

[disability student]

Most geniuses are nuts. Rothbard was as mad as a bucket of frogs, but in a good eccentric sense. One needs that to perceive the improbable from the matrix of life. Einstein was eccentric as well for example.

I am not familar with many names of Economics such Rothbard, only Keynes, Friendman, Solow, Adam Smith, Chicago school of Economics.


My favorite geniuses... Bobby Fischer and Richard Feymann a physcist. Paul Dirac was a pure oddball. Most nutcases came from Physics.

[ang]

Because the banks have lost people's savings and if people (especially the mega mega rich) are told their cash is gone there will be riots.

DCon I'm just so mad again. We are in the midst of another Anglo have you seen the figures drip drip drip

[DCon]

DCon I'm just so mad again. We are in the midst of another Anglo have you seen the figures drip drip drip

slowly slowly catchy monkey


They seem to be boosting profits in Poland and the U.S. Tarting them up for the sale no doubt


Profitability(1)

Operating profit before provisions and NAMA loss was € 976 million, down 42%

Loss on transfer of first tranche of assets to NAMA was € 963 million

Loss for the period € 1,731 million

AIB Bank ROI loss of € 2,677 million; operating profit before provisions, down 57%

Capital Markets profit of € 134 million; operating profit before provisions, down 36%

AIB Bank UK loss of £ 55 million; operating profit before provisions, down 31%

Poland profit of Pln 569 million up 80%; operating profit before provisions, up 28%

M&T US$ contribution up 25%

http://www.aib.ie/servlet/ContentServer?pagename=AIB_Investor_Relations/AIB_Press_Releas/aib_d_press_releases&cid=1280161330248&c=AIB_Press_Releas&channel=IRHP&position=first

[TotalMayhem]

Because the banks have lost people's savings

if it were just the few quid in the savings accounts of pensioners the losses wouldn't add up to these mind boggling figures. they have lost huge investments in massive gambles.

if you think you can have your money working for you (i.e. getting something for nothing), you might as well take a chance at your bookie. of course, there ain't no blanket guarantee for bookmakers.

[C. Flower]

People, I don't agree with Youngdan about much, but keep yourselves fit and keep the cupboard stocked with beans.

[Sidewinder]

I want 1,000,000 euros from the State. I will never pay it back.

What are my chances?

Join the local cumann and start angling for a cushty State supply contract. Sorted.

[Xray]

I feel sorry for AIB, I am posting them my left testicle in the morning.

[TotalMayhem]

I feel sorry for AIB

i don't, not one bit. and Colm Doherty's cry baby performance wasn't exactly inspiring. when i heard him whinging about the NAMA haircut and claiming AIB's systemic importance again, i felt just sick.

[Xray]

We have to put the banks in a position where they can fund themselves with confidence in world markets," Minister Brian Lenihan told RTÉ Radio on Monday. Asked if he could envisage taking a majority stake in AIB or other lenders, Lenihan said: "Whatever is required to be done will be done by the Irish state."

http://www.finfacts.ie/irishfinancenews/article_1019348.shtml

[Stendec]

basterds puttin up interest as well!! necks like jockeys bollox the hole lot of them!!

[PaddyJoe]

So this confirms that AIB have no chance of raising capital in the market without a public guarantee. I think anybody who was paying attention over the last year or so would have guessed this but its still a shock to see the suspicions confirmed.
Independent commentators like Karl Whelan and Brian Lucey were saying over a year ago that AIB would eventually be majority state owned and here indeed it comes.
Remember the recent European stress test passed AIB by assuming that it would raise the 7.4 billion it requires by the end of the year. Asset disposals will hardly raise even half of that so guess who is on the hook for another 4 billion or so?

[TotalMayhem]

did i just hear David Murphy saying that €20bn of AIB loans are in trouble?

[PaddyJoe]

did i just hear David Murphy saying that €20bn of AIB loans are in trouble?

As far as I could tell he said they were worried about one third of the loans that remained after the transfer to the NAMA which I think is something like 48 billion. Not quite sure about the 20 billion figure as I was trying to swallow the previous ones:(

[Xray]

Lets end this misery and set up one national bank. The game is over, the attempt to save private irish owned banking has failed.

[Sidewinder]

Lets end this misery and set up one national bank. The game is over, the attempt to save private irish owned banking has failed.

And at horrendous cost, when it was obvious (http://www.thepropertypin.com/viewtopic.php?f=4&t=12916) on the Central Bank's own figures in August 2008 - let me repeat, August 2008, before the Guarantee - that the Irish banks were toast.

[C. Flower]

And at horrendous cost, when it was obvious (http://www.thepropertypin.com/viewtopic.php?f=4&t=12916) on the Central Bank's own figures in August 2008 - let me repeat, August 2008, before the Guarantee - that the Irish banks were toast.

Not arguing with you Sidewinder, but do you have a link to those figures ?

I can see as far as negotiating down the debt heftily and setting up one State bank - plus keep the Credit Unions going - and also giving the iMF a one-way ticket home, but after that, it starts to get hazy.

What would you do ?

[Sidewinder]

Eh the link is in my post. The word "obvious" is a link to a discussion on the Pin in August 2008.

And me? Well I've no tolerance for corruption and I can be a bit blunt, so I'd call a spade a spade, revoke the Guarantee as a corrupt measure immediately, dismantle NAMA as a corrupt bail out immediately, put the six turkeys in liquidation immediately, jail every b'stard involved immediately, invite in clean foreign banks to take over the assets and performing accounts from the liquidator immediately, and tell anyone who complained to ******* off.

[C. Flower]

Eh the link is in my post. The word "obvious" is a link to a discussion on the Pin in August 2008.

And me? Well I've no tolerance for corruption and I can be a bit blunt, so I'd call a spade a spade, revoke the Guarantee as a corrupt measure immediately, dismantle NAMA as a corrupt bail out immediately, put the six turkeys in liquidation immediately, jail every b'stard involved immediately, invite in clean foreign banks to take over the assets and performing accounts from the liquidator immediately, and tell anyone who complained to ******* off.

:o Thanks.

I've read it now, and only half understand what is being said.

My understanding of the bank's situation is that residential borrowing is contracting (new CB figs today) and that trackers are costing the banks, also they say borrowing is costing them more than they're making and they must put interest rates up. But they have tens of billions of already "criticised" loans and the NAMA hair cut to deal with.

[Chuck Mc]

Eh the link is in my post. The word "obvious" is a link to a discussion on the Pin in August 2008.

And me? Well I've no tolerance for corruption and I can be a bit blunt, so I'd call a spade a spade, revoke the Guarantee as a corrupt measure immediately, dismantle NAMA as a corrupt bail out immediately, put the six turkeys in liquidation immediately, jail every b'stard involved immediately, invite in clean foreign banks to take over the assets and performing accounts from the liquidator immediately, and tell anyone who complained to ******* off.

I couldn't agree with you more! The business model seems to be they do what they feel like without thinking, and then rely on government money to survive. I would like to see the government refuse the guarantees altogether and force them to either figure out how to be profitable or be liquidated. Get them off the government teat before Ireland is sold to the highest bidder!

[C. Flower]

I couldn't agree with you more! The business model seems to be they do what they feel like without thinking, and then rely on government money to survive. I would like to see the government refuse the guarantees altogether and force them to either figure out how to be profitable or be liquidated. Get them off the government teat before Ireland is sold to the highest bidder!

I also totally agree, but to do that will mean squaring up to enormous international pressure. We need to be ready for that.

We should be stockpiling food. I've been saying that since Sidewinder's post in '08 lol.

[Sidewinder]

Well also when you have overall credit deflation there's less money around to service the existing debts and no new freshly-invented debt/money to keep the merry-go-round going. Older loans get paid off or written off while the volume of new loans being created does not provide sufficient cashflow to make up the loss in revenue from older loan servicing streams. The result, for banks unless they are well capitalised with deep pockets, is eventual death.

We hit overall credit deflation in April 2009, it is starting to bite now, and the credit deflation process will continue for at least another 3 years - probably more like 5 or 6 - until the overall debt burden reaches half-way sane levels. That means that with every month that passes, without massive injections of cash to plug the hole, these six banks will be losing more and more money every single month as their existing loan books gradually wind down.

Once it was obvious that we were definitely past the inflexion point and that the overall volume of credit would soon be declining....and the impaired loans were already mounting up rapidly so even the older loans would not be providing much income and that was before overall outstanding credit started falling...then nothing could save the six Irish banks.

But Clowen and Lendahand did it anyway, even after the figures were available.

[wickedfairy]

AIB customers should ask for a 12 month guarantee as well.

Are they for real? They enjoyed capitalism on the way up, but expect socialism on the way down. Risk and expected utility concepts? Not with banks, the house always wins!

“lemon socialism”: taxpayers bear the cost if things go wrong, but stockholders and executives get the benefits if things go right. Paul Krugman

[ang]

Sidewinder has it spot on!!!!

[PaddyJoe]

Anyone hear the Phllip Boucher Hayes interview with Constatin Gurdgiviev and Peter Mathews today? The consensus was that a 7.4 billion recap for AIB would not be enough. It will need up to 10 billion this year and possibly another 5 billion over the next two years.
Their preferred solution seems to be to nationalise it straight away; clean out the management; force senior bondholders to take an equity for debt swap; give ordinary customers and clients some kind of stake and eventually sell it back to the private sector again.

[Sidewinder]

Nationalising AIB - or any of them - would be insane, the taxpayer would still be on the hook for tens of billions in losses.

Nationalise the national payments clearing house, liquidate, sell the performing loans and current accounts to new entrants. Standard commercial practice, no more and no less. How come banks are magically immune to the standard examiner/administrator/liquidator model that every other industry regards as normal?

Any of you ever been through a liquidation? Occupational hazard in IT startups, seen a few, nothing to be scared of.

[TotalMayhem]

the blessings of a debt based monetary system.

the cheap money from the ECB is only available for new credits. unfortunately, anyone who can manage somehow without a new loan wouldn't go near a bank these days, and those in desperate need for credit won't get it, as the days where the only criterion for a bank loan was whether one was still breathing are over.

however, it really boggles the mind that there are obviously still people out there dealing with AIB. seriously, they burned 3.5bn last year, 2bn in the first 6 month of this year and and the bank guarantee isn't yet officially extended. wake up, folks, this isn't just a minor hiccup.

as for sidewinder's predictions, we don't have a snowball's chance in hell to survive another 5-6 years the way this country is run.

[PaddyJoe]

Nationalising AIB - or any of them - would be insane, the taxpayer would still be on the hook for tens of billions in losses.

Nationalise the national payments clearing house, liquidate, sell the performing loans and current accounts to new entrants. Standard commercial practice, no more and no less. How come banks are magically immune to the standard examiner/administrator/liquidator model that every other industry regards as normal?

Any of you ever been through a liquidation? Occupational hazard in IT startups, seen a few, nothing to be scared of.

Makes sense but you have to nationalise AIB and BOI first to take control.

[TotalMayhem]

How come banks are magically immune to the standard examiner/administrator/liquidator model that every other industry regards as normal?

I was just about to explain systemic importance to you, but for the life of me, i can't remember what it means. :D

[ang]

PJ was todays discussion in the context of deleting NAMA and loans going back to banks??

[C. Flower]

Makes sense but you have to nationalise AIB and BOI first to take control.

From what we heard today, you would just have to end the Bank Guarantee and they would go bust.

Could guarantee deposits up to 100,000.

[DCon]

Could guarantee deposits up to 100,000.

ending the guarantee would cause a run on the banks and they would be toast.

This is what they will tell the Brian's

[TotalMayhem]

From what we heard today, you would just have to end the Bank Guarantee and they would go bust.

c'mon, it can't be that bad. haven't they just passed the EU Stress Test with flying colours? :D

[C. Flower]

ending the guarantee would cause a run on the banks and they would be toast.

This is what they will tell the Brian's

I thought the question was how to liquidate the banks.

My answer was to stop guaranteeing them.

We clearly would need a State bank - I don't agree with you, Sidewinder, that we could rely on the private sector.

Let the banks go, then buy/take in lieu of debts, BoI and run it.

[C. Flower]

Just a reminder of this thread about the coming liquidity crisis - OP based on a blog by Kathleen Barrington.

http://www.politicalworld.org/showthread.php?t=2307

[PaddyJoe]

PJ was todays discussion in the context of deleting NAMA and loans going back to banks??

The discussion was focussed on AIB only. I didn't hear any mention of NAMA or other banks. I'll check if the podcast is available.
EDIT: Wednesday DriveTime podcast is not posted yet. The piece with PM and CG started 30 minutes into the show. EDIT

[C. Flower]

From the Barrington thread -



Increasingly, global investors are focusing on the fact that the European banking sector as a whole has grown in excess of GDP for so long that ‘‘it has become bloated and truly outsized relative to the underlying economies’’, ac cording to research by New York hedge fund Argonaut Capital Management, which was circulating in investment circles in Dublin last week.

This is particularly true of Ireland, where the banking system’s assets accounted for 700 per cent of GDP in 2007, the highest percentage of 14 countries analyses.
It is worth noting that, in the United States, the banking system’s assets represented slightly more than 100 per cent of GDP.

The European banking system became bloated because European banks became reliant on wholesale financing, rather than on retail and corporate deposits.
In 2008, the gap between the amount of loans issued by European banks relative to their deposit base reached more than three trillion euros.

David McWilliams has posted today on the same theme - http://www.davidmcwilliams.ie/2010/0...440bn-lifebuoy (http://www.davidmcwilliams.ie/2010/06/09/sinking-in-sea-of-bad-debt-despite-a-e440bn-lifebuoy)

Karl Whelan here on how the ECB is expected to cut back on buying bonds and how €78 billion euro of Irish bank debt will mature (need to be repaid) before October.
http://www.irisheconomy.ie/ (http://www.irisheconomy.ie/)

[ang]

The discussion was focussed on AIB only. I didn't hear any mention of NAMA or other banks. I'll check if the podcast is available.
EDIT: Wednesday DriveTime podcast is not posted yet. The piece with PM and CG started 30 minutes into the show. EDIT

Thanks PJ will catch up on it. :)

[Chuck Mc]

From what we heard today, you would just have to end the Bank Guarantee and they would go bust.

Could guarantee deposits up to 100,000.

"When injustice becomes law, resistance becomes a duty"
- Thomas Jefferson (April 13, 1743-July 4, 1826)

A state run single banking system will have no incentive to perform properly, and it won't. It will be susceptible to special interest groups and politically convenient policies that could make it worse than AIB. It could be transformed by the government into a method of taxation and revenue. Competition is always good for the consumer. Prices remain low, and the quality of service will remain high, or you lose your customers to your competitors. With no competition, where's the incentive?

Of course, the bank's going to claim whatever it needs to claim to get the funding. It very well may fail, it may not. If it does, let it. There will be an instant need for banking that will be filled, more or less instantly, by other banks, without any assistance by the government except possibly licensing or other such oversight costs. I don't think there will be an impact on the economy. Any claims that there will be have been self serving.

[TotalMayhem]

If it does, let it.

No can do, it's of systemic importance, full stop.

Are we really so f***ed up as a society to have our elected representatives treating us with nothing but contempt? The people of Ireland, every man, woman and child is of systemic importance, not the f***ing money lenders.

Elsewhere in the news: Bristol Palin ditched her fiance again. Good night and God bless.

[C. Flower]

"When injustice becomes law, resistance becomes a duty"
- Thomas Jefferson (April 13, 1743-July 4, 1826)

A state run single banking system will have no incentive to perform properly, and it won't. It will be susceptible to special interest groups and politically convenient policies that could make it worse than AIB. It could be transformed by the government into a method of taxation and revenue. Competition is always good for the consumer. Prices remain low, and the quality of service will remain high, or you lose your customers to your competitors. With no competition, where's the incentive?

Of course, the bank's going to claim whatever it needs to claim to get the funding. It very well may fail, it may not. If it does, let it. There will be an instant need for banking that will be filled, more or less instantly, by other banks, without any assistance by the government except possibly licensing or other such oversight costs. I don't think there will be an impact on the economy. Any claims that there will be have been self serving.

I don't agree that every bank in the country could close its doors without massive impacts. State enterprises - electrification, hydro power etc. - did us no harm in earlier days of this State. The only way to secure an orderly transition from collapsing private banks to do it ourselves.

There is no way that the present crowd would be running it of course as they are completely opposed to the idea.

Depending on foreign banks to establish here in the middle of an extreme crisis when they all already have liquidity problems is high risk and can't be assumed. Of course they could set up in competition with the State bank and if they provided better services would do well.

[Chuck Mc]

I don't agree that every bank in the country could close its doors without massive impacts. State enterprises - electrification, hydro power etc. - did us no harm in earlier days of this State. The only way to secure an orderly transition from collapsing private banks to do it ourselves.

There is no way that the present crowd would be running it of course as they are completely opposed to the idea.

Depending on foreign banks to establish here in the middle of an extreme crisis when they all already have liquidity problems is high risk and can't be assumed. Of course they could set up in competition with the State bank and if they provided better services would do well.

In my humble opinion the bank bailouts are exacerbating the crisis further by creating a sovereign debt problem. I also think that the hysteria over a total collapse of the economy caused by a bank failure is an act of fear mongering by the banks to get the money, and have little basis in reality. I say, let them fail. The government could put them in receivership and walk away with the bank for nothing. And what is to stop new banks being formed to fill the vacuum?

If I spend more than I make, I would either stop doing that or I would go bankrupt, and then I would be forced to stop doing that! Why are the banks any different? Either tighten the belt or disappear!

[disability student]

[QUOTE=Chuck Mc;54234]In my humble opinion the bank bailouts are exacerbating the crisis further by creating a sovereign debt problem. I also think that the hysteria over a total collapse of the economy caused by a bank failure is an act of fear mongering by the banks to get the money, and have little basis in reality. I say, let them fail.

Yes let them fail as they were scaremongering us. They had time 1 year at least to prepare and cut it down their losses. It seemed to me that they haven't learnt their lessons.

Look at Lehmans brothers which failed as the US economy emerged and stayed intact.



The government could put them in receivership and walk away with the bank for nothing. And what is to stop new banks being formed to fill the vacuum?

If I spend more than I make, I would either stop doing that or I would go bankrupt, and then I would be forced to stop doing that! Why are the banks any different? Either tighten the belt or disappear!


Let new banks set up their business as i have to remind you that AIB is a limited company which means they fall on their own sword when liabilities exceeds the value of the assets.

[DCon]

[quote]


Let new banks set up their business as i have to remind you that AIB is a limited company which means they fall on their own sword when liabilities exceeds the value of the assets.

If old people and farmers lose all their savings because AIB collapses, FF will never again see power.

This is why we are where we are with the banks

[disability student]

[QUOTE=DCon;54326][quote=disability student;54321]

If old people and farmers lose all their savings because AIB collapses, FF will never again see power.

Well DCon, Why don't they withdraw their savings and lodge it in An post or another bank?? A friend of mine- eldery lady already did it with her savings at post office from her previous bank.

[DCon]

[QUOTE=DCon;54326][quote=disability student;54321]

If old people and farmers lose all their savings because AIB collapses, FF will never again see power.

Well DCon, Why don't they withdraw their savings and lodge it in An post or another bank?? A friend of mine- eldery lady already did it with her savings at post office from her previous bank.

I would, if I had savings with AIB. I cannot speak for everyone in the country though.
Especially as the cash is not there to pay everyone. First come, first served.

[disability student]

[quote=disability student;54332][QUOTE=DCon;54326]

I would, if I had savings with AIB. I cannot speak for everyone in the country though.
Especially as the cash is not there to pay everyone. First come, first served.

Yes it took some weeks to withdraw a large savings as i recall it from her especially big savings.It's not that easy.

[TotalMayhem]

[quote=disability student;54321]If old people and farmers lose all their savings because AIB collapses, FF will never again see power.

anyone saving their money with AIB should have their head examined, there was plenty time to get out since the figures of last years wipe-out emerged, and time is running out.

sure, they can wait paralyzed for the word from the DoF like the rabbit facing the snake, but if the guarantee expires then it might be just too late, as AIB would not survive another day.

although Brian Lenihan claimed earlier this week, that the state would do 'whatever is necessary', not a word from him on the day when Ireland's largest bank had to announce the most devastating figures in its history, isn't exactly encouraging, never mind restoring confidence.

[DCon]

[quote=DCon;54326]

anyone saving their money with AIB should have their head examined, there was plenty time to get out since the figures of last years wipe-out emerged, and time is running out.

sure, they can wait paralyzed for the word from the DoF like the rabbit facing the snake, but if the guarantee expires then it might be just too late, as AIB would not survive another day.

although Brian Lenihan claimed earlier this week, that the state would do 'whatever is necessary', not a word from him on the day when Ireland's largest bank had to announce the most devastating figures in its history, isn't exactly encouraging, never mind restoring confidence.

If NAMA could be unwound, broke developers bankrupted and people given shares in the companies/property developments/properties that developers used to own in lieu of their vanished savings, at least all would not be lost.

Of course, a FF government would never do the above.

[Xray]

Nationalising AIB - or any of them - would be insane, the taxpayer would still be on the hook for tens of billions in losses.

Nationalise the national payments clearing house, liquidate, sell the performing loans and current accounts to new entrants. Standard commercial practice, no more and no less. How come banks are magically immune to the standard examiner/administrator/liquidator model that every other industry regards as normal?

Any of you ever been through a liquidation? Occupational hazard in IT startups, seen a few, nothing to be scared of.

Not nationalize in the Anglo sense, in the owe all the shares sense and split off the nice assets for the owners. I am with you 100% on the rest of it. We need functions banking in this country. One bank can do that, I suggest we own it and dump all the crap over board.

Reputation? Its already gone.
Competition? Get real, its already a monopoly and EU interest rates no longer relate to the average Irish person.
The EU? I am sure they are sick of print euro-bonds for us and they are not exactly tailoring policy to our needs anyway.



We into survival mode here. Sinking another ten billion into any bank at this stage is insane unless it is a national bank that has a clean sheet a will start lashing money into the REAL economy. I am starting to feel like an infantry private in the somme at this stage. This war is winnable, our banks are totally and unforgivable business failures. Until we accept that we will only get worse. Lenehan is a **** and his gutsy experiment is a disastrous failure. The markets don't lie on these matters, the banks are worth buttons for good reason. At least if we move now we can keep the good bits of the banks before they flog them off.

One National Recovery Bank now please!

[Xray]

[quote=disability student;54321]

If old people and farmers lose all their savings because AIB collapses, FF will never again see power.

This is why we are where we are with the banks

If this plan tanks as it appears to be doing, they will never see power again anyway. If the bank guarantee ever had to be used it could not be paid. We have agreed to cover something like 400 billion euro. Its a joke, nobody has it, its a bluff.

This is more serious than being just a bit annoying, we are going to hit another wall sometime soonish. What's the plan then? We wont be able to bluff twice. At the end of sinking a second national debt into banking we still wont have a bank worthy of the name, that is incredible.

I have never been so happy not to have much cash, it would keep me awake if I did.

[Xray]

Is there any good reason Ulster Bank could not manage the competition end of things against a State bank and indeed manage accounts of customers of other banks in a shut down situation?

They have a branch in almost every town and ATMS etc.

[C. Flower]

[QUOTE=Xray;54447]Not nationalize in the Anglo sense, in the owe all the shares sense and split off the nice assets for the owners. I am with you 100% on the rest of it. We need functions banking in this country. One bank can do that, I suggest we own it and dump all the crap over board.

Reputation? Its already gone.
Competition? Get real, its already a monopoly and EU interest rates no longer relate to the average Irish person.
The EU? I am sure they are sick of print euro-bonds for us and they are not exactly tailoring policy to our needs anyway.

We into survival mode here. Sinking another ten billion into any bank at this stage is insane unless it is a national bank that has a clean sheet a will start lashing money into the REAL economy. I am starting to feel like an infantry private in the somme at this stage. This war is winnable, our banks are totally and unforgivable business failures. Until we accept that we will only get worse. Lenehan is a **** and his gutsy experiment is a disastrous failure. The markets don't lie on these matters, the banks are worth buttons for good reason. At least if we move now we can keep the good bits of the banks before they flog them off.

One National Recovery Bank now please!


+ 500 billion.

[TotalMayhem]

Quite remarkable: here we have Ireland's largest bank going down the ******, burning billion after billion in the process and not a word from neither the government nor the opposition.

At the current rate this bank is loosing 11 millions each day it is allowed to remain in 'business' and guess who will be left to foot the bill when these chicken come home to roost?

[Xray]

quite remarkable: here we have Ireland's largest bank going down the ******, burning billion after billion in the process and not a word from neither the government nor the opposition.

They have rush back to work to discuss the mobile phone bill of an unelected member of parliament. This is a joke, play us another tune while the ship sinks.

I don't care about the navel gazing in Leinster house, I want the banks sorted out now and the lying to end immediately. Lenehan should be on the news tonight explaining this not twenty minutes on how to prevent people stealing money on their expenses.

[C. Flower]

quite remarkable: here we have Ireland's largest bank going down the ******, burning billion after billion in the process and not a word from neither the government nor the opposition.

TotalMayem it's not remarkable at all. Likewise, the President of Pakistan is off on a junket while his country drowns.

If a nuclear bomb dropped they would retreat to their bunkers and let us fry.

Cowen is in his caravan, and his mobile phone doesn't work there.

Did you look at the diaries for Cardiff and Beausang of the DoF in August of 2008 when the banks were last melting down ?

[ang]

We have managed without a credible banking system for 2yrs............

[TotalMayhem]

So this confirms that AIB have no chance of raising capital in the market without a public guarantee.

They can't even raise capital with a public guarantee, they're trying desperately to sell their 'assets' in England and Poland for over a year now. Yet they have hope to announce a potential buyer by the end of next month. It just sounds so pathetic.

[C. Flower]

Bonds maturing....

[TotalMayhem]

TotalMayem it's not remarkable at all. Likewise, the President of Pakistan is off on a junket while his country drowns.

If a nuclear bomb dropped they would retreat to their bunkers and let us fry.

Cowen is in his caravan, and his mobile phone doesn't work there.

Did you look at the diaries for Cardiff and Beausang of the DoF in August of 2008 when the banks were last melting down ?

http://img28.imageshack.us/img28/8325/20100805215729clipboard.jpg

sorry, i just couldn't resist.

[C. Flower]

Thanks TotalMayhem, best laugh of the day.

[Chuck Mc]

http://img28.imageshack.us/img28/8325/20100805215729clipboard.jpg

sorry, i just couldn't resist.

Hahaha, that's great!

[Chuck Mc]

It's Irish assets that AIB wants to sell. In the USA there is the Federal Deposit Insurance Corporation. All banks are required to participate, and it covers all deposits up to $100,000 per type of account in case of a bank failure. (Savings, checking, business, etc.) If a bank fails, the FDIC regulators take over the functions of the bank until it is bought by someone, sold in pieces or otherwise liquidated. I've seen twice lately where the US government was writing checks to depositors for the amount of their deposits in a dissolved bank.

Since AIB seems to be the only bank in town, maybe it's time it was allowed to fail and let some competition emerge.

[Captain Con O'Sullivan]

There is a rather large probem looming and one can see it in the increasing spread figures on Irish sovereign debt ... I believe we have 70billion due in October and no way to pay it.

Meanwhile back at the ranch our caravanning Taoiseach is attempting to borrow a further 40billion in order to fund a public works programme (shorthand for some loot to keep the developers going).

I think FF are in pure looting mode as they know they'll be facing opposition and a clear out and are feathering their and their friends nest with abandon and leaving a scorched earth behind them.

This coming Dail term will I am sure contain a huge distraction (fake leadership challenge within FF?) to distract from the forthcoming distribution of state assets for a song such as Coilte to companies with FF connections- Helvetica with one Bertie Aherne as Chairman for example.

The scorched earth policy is the only way FF can guarantee that while in long term opposition they can start blaming the next government for everything and at the same time wait for memories to fade.

[C. Flower]

Anglo Irish Bank has now called for the Bank Guarantee to be extended as the system is still not stable.

[DCon]

Anglo Irish Bank has now called for the Bank Guarantee to be extended as the system is still not stable.

:) :0

[Captain Con O'Sullivan]

That can't be right ... they were bailed out because they were 'systemic'. Maybe they are struggling still because they just aren't systemic enough?

[TotalMayhem]

of what concern is the bank guarantee to Anglo anyway? aren't they nationalized and owned by the state?

[DCon]

of what concern is the bank guarantee to Anglo anyway? aren't they nationalized and owned by the state?

they might not want a run on the banks as they have lost all their customer savings too

[TotalMayhem]

extending the bank guarantee doesn't make sense at all. such a guarantee is nothing but the chance to cut your losses and get your savings/investments out while you can. we gave you two years to do so. you haven't done it yet? well, tough luck.

[C. Flower]

extending the bank guarantee doesn't make sense at all. such a guarantee is nothing but the chance to cut your losses and get your savings/investments out while you can. we gave you two years to do so. you haven't done it yet? well, tough luck.

I thought they all (apart from Anglo Irish) passed the Stress Test ??? :confused:

[TotalMayhem]

Anglo was not tested at all, only AIB and BoI.

and the stress test was just another example for the short-lived horse manure we're being fed. :D

[C. Flower]

Anglo was not tested at all, only AIB and BoI.

and the stress test was just another example for the short-lived horse manure we're being fed. :D

It would lead me to believe that all in the European garden is not so rosy as we are being lead to believe, even with the aid of horse manure (so good for the roses).

I can't get it out of my head that Anglo Irish was being relied on by a number of European banks back early in 2008 to provide temporary "liquidity" loans to adorn their balance sheets.

[DCon]

Anglo was not tested at all, only AIB and BoI.

and the stress test was just another example for the short-lived horse manure we're being fed. :D

And the stress test happily assumed that AIB could raise a few Billion on the market, and sell their assets in foreign banks at high prices.

[C. Flower]

And the stress test happily assumed that AIB could raise a few Billion on the market, and sell their assets in foreign banks at high prices.

Why wouldn't be able to raise a few Billion, if it's guaranteed ? :confused::(

[C. Flower]

Mike Aynesley explains why Anglo Irish wants the Guarantee extended

http://www.irishtimes.com/newspaper/breaking/2010/0806/breaking29.html

[TotalMayhem]

still don't see why Anglo has any interest in a state guarantee. unless of course, the performing part of "Good Anglo" is going to be privatized for some symbolic price, then such a guarantee would be a nice thing to rely on.

[disability student]

still don't see why Anglo has any interest in a state guarantee. unless of course, the performing part of "Good Anglo" is going to be privatized for some symbolic price, then such a guarantee would be a nice thing to rely on.

Anglo Irish will have to wait until September re EU decision. I would rather see EU pull the plug on Anglo Irish as all the money is going down in a huge hole without any guarantee of return. It's like throwing good money after bad as it's not a good business sense.

State guarantee expires on 29th September unless the Govt reverse their decision.

[Kev Bar]

I want 1,000,000 euros from the State. I will never pay it back.

What are my chances?


Excellent provided you can provide them with an "appalling vista" (ta Lord Denning) akin to the visual backdrop in C McCarthy's "The Road".

[Kev Bar]

Mike Aynesley explains why Anglo Irish wants the Guarantee extended

http://www.irishtimes.com/newspaper/breaking/2010/0806/breaking29.html


Am I on drugs? Sell Arnotts risk 900 unemployed. (For the sake of rhetoric, I'll do sentimentality) derail a retain icon...and for what? Rising interest rates. Rising unemployment. Emigration no longer a choice. And to keep the pikes and guns buried, they'll divide and conquer while they drip feed us revenge in the ugly shape of Ivor and a seized BMW.

Sress test? My financial black hole. An opiate for the masses. Who will know all bout stress testing if they look for a loan.


Oblivion, suicide or assassination?

[TotalMayhem]

Is there any good reason Ulster Bank could not manage the competition end of things

Yes, appr. 2 billion reasons. Ulster Bank doesn't look too rosy either. :)

[disability student]

Anglo Irish bank had laid off 800 jobs and recruited 200 new employees at the same time, with a speciality in restructuring.

[Xray]

There is a rather large probem looming and one can see it in the increasing spread figures on Irish sovereign debt ... I believe we have 70billion due in October and no way to pay it.

Meanwhile back at the ranch our caravanning Taoiseach is attempting to borrow a further 40billion in order to fund a public works programme (shorthand for some loot to keep the developers going).

I think FF are in pure looting mode as they know they'll be facing opposition and a clear out and are feathering their and their friends nest with abandon and leaving a scorched earth behind them.

This coming Dail term will I am sure contain a huge distraction (fake leadership challenge within FF?) to distract from the forthcoming distribution of state assets for a song such as Coilte to companies with FF connections- Helvetica with one Bertie Aherne as Chairman for example.

The scorched earth policy is the only way FF can guarantee that while in long term opposition they can start blaming the next government for everything and at the same time wait for memories to fade.

Plus one...

[Xray]

Yes, appr. 2 billion reasons. Ulster Bank doesn't look too rosy either. :)

Yes but it is owned by the UK and its parent company is solvent.

[TotalMayhem]

who is the parent company of the UK? :)

[DCon]

EU approval may be sought


THE DEPARTMENT of Finance has indicated the Government may seek European Commission approval for the extension of the €450 billion guarantee for the banking system.

It follows calls from a second bank, Anglo Irish Bank, for the guarantees to be extended because the Irish system is not yet strong enough to stand on its own without them.

There are two guarantees in place. The first, which was given in the aftermath of the collapse of Lehman Brothers in 2008, covered all of the existing debts of the Irish banks.

The circumstances surrounding the granting of the guarantee, which was contrary to the advice given to the Government, have attracted controversy because of the potential risk that it exposed the State to. It expires in September.

The second guarantee, which expires in December, was given in December 2009 and guarantees certain types of borrowing by the banks for up to five years.

http://www.irishtimes.com/newspaper/frontpage/2010/0807/1224276381285.html

[TotalMayhem]

four hundred and fifty billions??? that's not even half a trillion ... peanuts, are we strapped for cash or why do we need EU approval?

[Sidewinder]

EU approval may be sought

I loathe these snakes and their constant twisting and lying and misrepresentation and spinning. "may seek approval" indeed, and the dumb sheeple will swallow it whole.

:mad::mad::mad:

These vermin, these scum, are just incapable of saying anything straight. Ask them if it is raining and you'll get three minutes of tortured incomprehensible waffle.

As a society we seriously need to be taking direct action against this type of person. Next time you meet a dissembling lying agent of confusion and apathy, punch the lying fecker in his lying gob.

[charley]

wouldn't extending the guarantee expose the statement by Cowen and Lenihan that the economy had stabilised as a lie. If the banks can't stand without the crutch of the guarantee after 2 years it dosen't say much for their condition.
A guarantee from Cowen at the moment wouldn't be worth the paper its written on. Everyone knows if it was activated the state couldn't cover it. better to cover the deposits and just walk away from the banks .chances are it will work out cheaper as I would be doubtful if anyone is keeping large amounts in any of the Irish banks.

[Sidewinder]

I would be doubtful if anyone is keeping large amounts in any of the Irish banks.

You'd be surprised.

The FF faithful and all the other fools who believe the endless deluge of sewage from the Brians about bottoms and corners and hard decisions blah blah. Pensioners and people who sold up at the height of the bubble. Loads of fools who still keep their savings in the toxic Guaranteed banks.

Me and you might consider it sheer folly, but if there's one thing we've learned in the last 10 years is that 80% of people, unfortunately, are pretty uninformed and too lazy to do any thinking for themselves. They'll unquestioningly accept whatever people in "authority" tell them, and so they'll get shafted time after time and never realise why.

[Xray]

I think there is a lot of fuzzy thinking about the banks going on(not on this thread).

The people running the banks have one responsibility, to maximize returns for share holders and protect whatever bank they run. The people running the country have a responsibility to the people of the country and their interests.

There is no point blaming the heads of the banks for no looking out for the country, there is no point in the people running the country worrying about share holders. The fuzzy thinking between the two sets of responsibilities are extremely dangerous.

I cant see no interests in the country having several privately owned banks relying on public money for several years. I can see no benefit in leaving any potential future profits or upside in the hands of private "investors" either. That should be the only focus of the servants of the State at this point. Let the banks worry about themselves, two years of life support is more than they ever deserved or warranted anyway.

[Xray]

who is the parent company of the uk? :)

usa

[Xray]

wouldn't extending the guarantee expose the statement by Cowen and Lenihan that the economy had stabilised as a lie. If the banks can't stand without the crutch of the guarantee after 2 years it dosen't say much for their condition.
A guarantee from Cowen at the moment wouldn't be worth the paper its written on. Everyone knows if it was activated the state couldn't cover it. better to cover the deposits and just walk away from the banks .chances are it will work out cheaper as I would be doubtful if anyone is keeping large amounts in any of the Irish banks.

That is a key point really, the whole bank policy was a bluff that has not worked. We can only borrow so much more and promise so much more nonsense. We are running out of rope. There are a few chickens coming to roost soon. We have booted the ball into the long grass one too many times.

[C. Flower]

I think there is a lot of fuzzy thinking about the banks going on(not on this thread).

The people running the banks have one responsibility, to maximize returns for share holders and protect whatever bank they run. The people running the country have a responsibility to the people of the country and their interests.

There is no point blaming the heads of the banks for no looking out for the country, there is no point in the people running the country worrying about share holders. The fuzzy thinking between the two sets of responsibilities are extremely dangerous.

I cant see no interests in the country having several privately owned banks relying on public money for several years. I can see no benefit in leaving any potential future profits or upside in the hands of private "investors" either. That should be the only focus of the servants of the State at this point. Let the banks worry about themselves, two years of life support is more than they ever deserved or warranted anyway.


How can you say there's no point ? We must help the rich...

http://www.funnyordie.com/videos/cbabb3addc/bailout-rejected-please-help-the-rich-from-fod-team?rel=by_user

[Xray]

How can you say there's no point ? We must help the rich...

http://www.funnyordie.com/videos/cbabb3addc/bailout-rejected-please-help-the-rich-from-fod-team?rel=by_user

That is not what the oath of office says, can me old fashioned, but that is why I think some of the decisions are treason.

[TotalMayhem]

That is not what the oath of office says

and which oath exactly do you mean?

only the President takes an oath.

[C. Flower]

That is not what the oath of office says, can me old fashioned, but that is why I think some of the decisions are treason.

But the rich need us .... They depend on us to maintain their lifestyles....:confused:

http://www.funnyordie.com/videos/cbabb3addc/bailout-rejected-please-help-the-rich-from-fod-team?rel=by_user

[DCon]

Great News!!


Allied Irish Bank is to be "effectively nationalised" by the end of the year as the State will be required to cover its funding deficit, the Sunday Independent can reveal.

The Department of Finance has confirmed that, even after the sale of assets and a rights issue, it expects AIB will not have sufficient capital by December to meet the strict new funding criteria set down by Financial Regulator Matthew Elderfield.

The bank needs to raise €7.4bn to meet the new capital reserve rules.

The Government is committed to helping AIB to meet those financial requirements "at all costs". Finance Minister Brian Lenihan has said he does not want to nationalise another bank -- but he will do so if necessary.

As a result of transferring preference shares into ordinary shares to meet the capital reserve rules the State's stake in the bank will increase substantially, with expectations of between 65-80 per cent State ownership.


http://www.independent.ie/national-news/state-will-take-control-of-aib-by-end-of-year-2288914.html

[TotalMayhem]

aww shucks, the frustration ...


Mr Aynsley said he was frustrated that he was unable to give a final figure of costs to the taxpayer. He said it depended on discounts applied by Nama to loans which will transfer from the bank.

whatever the discounts applied by NAMA are, the taxpayer has to pay either way. moving the junk into NAMA doesn't make it go away, eh?

[ang]

Indeed we (taxpayers) are in one of those places now where you have to pay premium rates to get in and even more to get out, a very well spun FF web.

[charley]

Aynsley seems to be a bit bewildered. as Anglo Irish bank is a wholly owned subsidary of Ireland inc. the guarantee is irrelevant to it. is this a case of one banker backing up another bankers need for the guarantee. or is it the case that if AIB is nationalised as it can't continue without the guarantee his little operation will be quickly merged into the larger money pit and his services will no longer be required