
The following figures are frightening and are the money behind the FF & Green gamble;
Potential total book value for transfer to NAMA 77bn
Interest Roll up Estimate 9bn
Balance excluding roll up 68bn
Approximate average Loan To Value ratio 77%
Assets value at origination 88bn
Potential decline in property prices approximate estimate 47%
Estimated current market value of underlying asset 47bn
The bung for the dubious honour of doing the business with FF’s banker and builder friends is €7Billion. That’s almost doubling spending at a stroke on the HSE without any plan how to spend. Long term economic value? Sounds like playing for short term political survival. Of course the seeds for this were sown in the bank guarantee scheme of almost a year ago. The bankers have won once more at the expense of those who need social welfare, an education or medical attention. Developers have now morphed into Borrowers,

Finance Minister Brian Lenihan’s attempt to soothe the anger ignores many worries behind the scene. Justice Frank Clarke decided last week that Zoe’s chances of survival were slim and that the economic recovery plan was unlikely to succeed. What are the chances of the empty houses in the market (overhang) being sold in the likely context of growing unemployment and increased interest rates in 2010? If rents are falling and the number of vacant houses rising, who’d buy a new house if repossessions climb? Who’ll have the money to buy a repossessed house? I don’t know where the bottom of the Irish market is although I accept that the minister may be right and that values may increase by 10% over 10 years don’t forget that about 20% of the NAMA land is outside the state and that some of these countries may already be out of recession so the increase in property prices will not be evenly spread but the rising foreign tide may give a false impression of the domestic Irish boat. A recent survey in Mullingar showed about 20% of Main St property vacant. There’s nothing to suggest that this observation is unique to Mullingar.

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