The country is seething today as details of the sums that will be poured from our pockets into the banks were analysed. The Irish Timessummarises it thus:
“In reality, nothing that could have been said yesterday would have altered the fundamental risk associated with Nama. At its most simple, it is a calculated gamble that the all-in upfront cost to the State of bailing out the banks will be less debilitating than the wider costs of letting them fail. That upfront cost is still not clear but based on the information that was released yesterday it could involve capital injection of up to €31.8 billion in fresh capital and close to €40 billion in debt issued to the banks to pay for their discounted property loans.
The cost of having let the banks fail is unquantifiable and is inextricably linked to the impact on the State’s own credit worthiness and ability to borrow. Ultimately the view was taken that standing behind the banks and their obligations to international debt markets was preferable to letting their bond-holders suffer the consequences of the banks’ greed and stupidity.”
As my loving husband said, if the banks can transfer their loans to the State at a 60% discount then why can’t we transfer our mortgage with a 60% discount too. I guess the bottom line is that the international bond-holders are a lot more important than we are.
The Princess and myself watched a news report on NAMA and she asked me what it’s all about.
Me: Well, the State has pledged a lot of taxpayers’ money to the banks to keep them from failing.
Her: Who’s he?
Me: Who’s who?
Her: The taxpayer.
Me: Well, everyone who has a job and pays taxes to the State to run it. And everyone who is going to have a job in the future. You’ll have to pay for this too, sweetheart.
Her: Really?
Me: I’m afraid so, honey.
Her: You’d better up my pocket money then.