I have just switched off the TV after listening to an interview on Prime time with Joseph Stiglitz, Nobel Prize winning economist. His verdict on Nama? It is nothing but theft – from taxpayers to bail out shareholders; no different to tin-pot dictator fiefdoms that Stiglitz encountered during his stint in the World Bank!
Why Nama is such a rip-off is explained at length and in detail by Dr Constantin Gurdgiev. He writes in response to Donal O’Mahony, Chief Strategist at Davys Stockbrokers a pro Nama cheerleader. Question if Nama is theft what does that make Davys ?
Here is a taster…
1) Donal was keen to distance himself and Nama supporters from ‘theoreticians’ and ‘academics’ who exclusively populate the Nama critics land. It is important to note that many of the people who signed the letter of 46 economists, as well as other members of the critics camp are actually practitioners of the same fine art of finance as Donal. Many.How many? Well, just a quick run through
- myself – former business editor who brought finance coverage to the most respectable Irish business magazine, former director of research at NCB, currently head of research and strategy with an American brokerage.
- Greg Connor – former director of research for Barra, Fed employee.
- Karl Whelan – former Fed employee.
- Other members of 46 run options desks, have been bond traders, worked in central banks and finance ministries… you get the picture.
- Brian Lucey – former employee of the Central Bank;
- Ronan Lyons – former economist wit one multinational company and also chief economist of Daft.ie; and so on.
Donal might think we in academia are just performing random walks in various universities’ squares, but no, we actually advise governments, international organizations, businesses and have some relevant experience in the real world.
2) Donal contended that the main problem with Irish banking sector was that after 2001 we had “over competition” from (guess who?) the foreign banks. One assumes he means Rabo and KBC, for the British banks were here before 2001 and in addition we had our banks in their countries as well, aggressively lending to… yes, you’ve guessed it again – property developers there. So the foreign banks, thus, caused a property boom in Ireland. And the foreign banks forced our banks to issue 110% mortgages. And the foreign banks assured that most of our lending has gone to finance property deals of one variety or the other. Of course, it was the foreign banks that made sure that IL&P and Nationwide made strange dealings with Anglo. Why wouldn’t Donal read Noel Whelan’s treatise on the crisis (see my comment here) – he might find out that in addition to the foreign banks, 46 economists also caused the crisis. (Link to article)
