The Chinese Bubble

Kaput-Thing-Bank

Irish Banks Have no Subprime Paper

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I seem to recall that Mr Cowen assured us that Irish banks were not exposed to any Subprime / toxic paper.Well the AIB 2009 Interim report would suggest otherwise.
I would really like to know what is buried in the nationalized Anglo Irish Bank

AIB Interim Report 2009
Warning this is a pdf file.

The details are on page 19.

Steve Keen

Shadow Banking

What is NAMA

Brian Carey in the Sunday times pretty much nails it on the head.

It is not available online so I am going to summarize it here.
NAMA is not a taxpayer bailout for the banks, or a Fianna Fail bailout for their builder buddies.

NAMA is the European Central Bank's carefully structured rescue of the Irish Economy.
The difference between Iceland and Ireland are four letters N.A.M.A.
This is Quantitative easing via the ECB.
When NAMA takes over the €90 billion of dud property loans from the banks. It will deposit in
return €60 billion of NAMA bonds with irish banks that can be exchanged in frankfurt for ECB funds. This is what bankers call liquidity. To us it is money injected into the economy.
Who will be the ultimate arbiter's of the pricing mechanism on the loans to be transferred to NAMA? Answer The ECB.

A lesson from Iceland

Kaupthing's loan book, which was leaked on to the internet last week, shows that around one third, or €6bn (£5.1bn), of its €16bn corporate loan book was going to a small elite of men connected to the bank's owners and management.

Several investigations into Kaupthing centre on share ramping, where the bank would allegedly give loans with no interest or security in order to buy shares in that same bank – boosting the share price.

One particularly murky incident revolves around the acquisition of a 5pc stake in Kaupthing by a company called QFinance linked to Mohammed bin Khalifa Al-Thani, the Sheikh of Qatar. Several weeks before the banks collapsed, a press release stated that the transaction showed that "Kaupthing's position is strong and we believe in the bank's strategy and management."

Only after the bank collapsed several weeks later did it emerge that the Qatari investor "bought" the stake using a loan from Kaupthing itself and a holding company associated with one of its employees. The bank appears, in effect, to have been purchasing its own shares, which does not seem to be uncommon; investigators are also looking at a similar purchase of a 2.5pc stake in Kaupthing by London-based property entrepreneurs Moises and Mendi Gertner.

Officials have also questioned why loans to senior Kaupthing employees to buy shares in the bank were allegedly written off days before the collapse.

Companies connected to Exista, the Gudmundsson brothers' opaque investment vehicle that owned their stake in Kaupthing, received €1.86bn in loans. Their close business associate, Mr Tchenguiz, appears to have personally borrowed €1.74bn in loans to fund his private investments e_SEnD from stakes in Sainsburys to Mitchells & Butlers. Mr Tchenguiz is now being sued by Kaupthing's administration committee for the return of £643m.

Kevin Stanford, co-founder of the Karen Millen retail chain and one of Britain's wealthiest retailers, also got €519m in loans and was Kaupthing's fourth biggest shareholder. His company's purchase of credit default swaps in the bank is also under scrutiny, though there is no suggestion of wrongdoing his or his companies' part.

According to the leaked document, many of these loans carried little or no security and were listed as belonging to Kaupthing's "exception list" – seemingly those who received banking services on favourable terms.

The loan books of Landsbanki and Glitnir remain in the hands of their administration committees – to the frustration of many Icelanders who fear they may yield equally unusual surprises.

Telegraph