NAMA FAQ

The government had the audacity to put a FAQ on the NAMA site.
Here is the link , its a quite an extraordinary document.

http://nama.ie/Publications/2009/NAMAFAQs.pdf

A few of the "diamonds" you can find in there:
(Orignal text in black, comments in blue and red)

2. How can you justify this further bail-out of the banks?

The price NAMA will pay for any loan asset will be determined in accordance with the valuation methodology as set out in the draft Bill.
NOT TRUE: the details of the valuation methodology will be published AFTER the voting of the bill.


It is true that the banks in most instances will not be paid current market value but will be paid a price which is in accordance with the long term economic value of each asset in line with EU guidance. Misleading: The price paid will be HIGHER than the market price!



3. Why is the Government opposed to the nationalisation of financial institutions?
The Government believes that it is important, where possible, that the banking sector has a market presence and that it operates within market disciplines and constraints.
Dogmatic: The government is ideologically opposed to nationalisation , but offers no real arguments , just dogmatic statements.Nationalisation might not be the best solution , but the government makes no clear case about the issue.


7. How will the assets be valued?
Valuations by NAMA will be consistent with EU Commission guidelines and will be based on the current market value of the underlying collateral, adjusted to reflect a longer term economic value which the underlying asset could reasonably be expected to attain.
Misleading again : The price paid will be HIGHER than the market price, why don't they say that clearly?


Detailed regulations on how the long term economic value is to be calculated are been drawn up by the Minister and will be published in September. This is AFTER the bill has been voted into law! This is a blank cheque!

8.One of the key issues is the write-down value to be applied to the loans. What is the logic behind the NAMA valuation and how will it differ from the current market value?
Misleading use of language: the talk about a write-down , when the reality is that they are overpaying for the bad loans.This is propaganda!Nobody in their right minds will think that the bubble prices of years past have anything to do with the current situation and with the future value of land in Ireland!

The principles of the valuation methodology are set out in the draft legislation and the Minister will be making detailed regulations based on these principles when the legislation is passed.
WHY AFTER THE VOTE?

It is important to note that it is at NAMA’s absolute discretion to value the loans on the long term economic value. It can pay the current market value for some loans – it will pay whichever it determines as the appropriate transfer value for that loan depending on the particular circumstance.
So not only they will tell how they will value the assets AFTER the bill is voted , we will them not be able even to question the values they come up with! Is Ireland a BANANA REPUBLIC?
In the USA when the government tried to pass a similar plan with the same provision of no accountability and no control there was a riot at the Congress, why not in Ireland!


9. Will details of the write-downs to be applied to the loans being transferred be made available?
Each loan will be valued separately and the actual amount of the haircut or discount applied will depend on the quality of the underlying property and other collateral. This means there will not be a uniform haircut across all the loans of the institutions but the effective haircut will become apparent once NAMA begins its valuation process. So the answer is yes or no?


19. What will be the interest rate paid on the NAMA bonds?
NAMA will pay a floating rate of interest on any securities it pays to buy the loans. It is expected that the stream of income from the loan assets transferred to NAMA will be sufficient to meet the interest payments on the NAMA bonds as based on information provided by the financial institutions, the cashflow generating loans pay an average margin of 2% above the floating rate of interest. But most of the loans that NAMA will be buying they don't even pay interst any more! So NAMA will not only overpay the banks to buy these loans, but then will have to pay them interest on their bonds while receiving no income from the DEFAULTED developers!

The whole FAQ on the NAMA site is full of misinformation and misleading wording.
This is wrong that on such a critical issue the Goverment tries to lie to such an extend.