Ireland-Nama:Text of Letter from Richard Bruton TD to Brian Lenihan Minister for Finance August 25, 2009

August 25 2009
Dear Brian,
I am writing to you in response to your recent letter asking for comments and observations from Fine Gael on the draft NAMA Bill in order to facilitate a discussion at the Oireachtas Joint Committee on Finance and the Public Service on August 31.Fine Gael Concerns about NAMAAs you are aware, Enda announced last Friday that Fine Gael does not support the Government's approach to resolving the banking crisis. Our concerns about the NAMA Bill arise from its potentially colossal cost, from its uncertain benefits and from the evident unfairness of asking taxpayers to take responsibility for the reckless behaviour of developers and banks. In particular, we are concerned at:

* The likelihood of over-payment by taxpayers to bank shareholders and bondholders for toxic bank assets of highly uncertain value. The distinction in the draft Bill between current "fire sale" market prices for bank assets and their underlying property collateral and their long-term economic value has some valid theoretical underpinnings, but in practice the latter is impossible to estimate. The banking and property crashes in other countries such as Japan should be a cautionary tale for those who believe that the price for certain types of property will inevitably recover from current market prices. Given the scale of this venture, over-payment could hobble the public finances for a decade;

* The doubtful impact of NAMA on the current lack of bank credit for businesses and households; and

* The wisdom and fairness of transferring responsibility to the taxpayer for the collection of troubled developer debts, and the terrible incentives this creates for repeated reckless behaviour by banks at some future date.
A Fine Gael Alternative

As you know, Fine Gael has, as far back as last April, offered a two-track alternative to NAMA that we believe addresses these problems.

Under Track 1, we propose to ensure improved credit availability for businesses by the establishment a wholesale "Good Bank", or National Recovery Bank, capitalised by the State and further leveraged by the ECB and funding markets using the "asset covered bond" model that is well-established in other EU countries.

In parallel, under Track 2, the banks would be given until the end of the Guarantee period in September 2010 to pass a rigorous "stress test" to show that they had repaired their own balance sheets by selling assets (such as foreign subsidiaries), raising more deposits and negotiating down their own liabilities to long-term providers of risk capital and funding.

In the event that the banks cannot pass such a Stress Test by the end of the Guarantee period, Fine Gael's proposal is to split each failed bank into two, leaving the assets with the most uncertain values (the developer loans) in legacy property management companies owned largely by the shareholders and other classes of risk investors.

Deposits, other short-term liabilities, easy-to-value loans like mortgages and business overdrafts, the branch networks and the vast majority of the staff would all move safely and seamlessly into a new, going concern "clean bank", initially owned and guaranteed by the taxpayer. These new "clean banks" would be well capitalised with a clean balance sheet and fully open to resume lending.

We are confident that this break-up procedure would never prove necessary for most of the banks, as they and their investors would have every incentive to avoid it. All the major banks have already announced plans to buy back debt from their bondholders at a discount in a way that generates capital to absorb future losses. These types of "debt buybacks" and debt-to-equity conversions would accelerate dramatically under our policy and at greatly discounted prices.

The advantage of this model over the current NAMA proposal is that the risks and responsibilities associated with working out distressed developer-related loans would remain with those professional bankers and investors that funded the loans and that are best placed to recover them. While the taxpayer may have to have some participation in the legacy property management companies, their losses will only be incurred after the private investors. Private investors would employ the best skills and judgement to recover as much of the money as possible, and there would be no public disquiet about a soft-touch approach for the well-connected developers.

I am, of course, aware of your oft-stated concerns regarding the implications of our proposal for financial stability. But it is international best practice for risk investors in the banks, including some classes of bond-holders, such as owners of subordinated debt, to absorb loan-related losses ahead of taxpayers. This, after all, is the nature of capitalism.Financial stability would also be maintained during this process by extending the Guarantee as necessary on debt roll-overs and all new funding coming into the banks until the sufficient recapitalisation has been achieved and confidence restored.

The Need for a Full Debate on Alternatives to NAMA.

It is disappointing that, given the enormity of the decisions we face over the coming months, that the Government has facilitated so little considered and objective evaluation of the benefits and weaknesses of the NAMA proposal vis--vis the alternatives. To justify its assertion that there is no workable alternative to NAMA, the Government to date has published nothing more than an 11-page summary of a report by Peter Bacon.

I would respectfully suggest that this has not been a formula for generating cross-party or widespread public support for any proposal to deal with the banking crisis. The draft NAMA Bill should now be delayed. In September, the Oireachtas Joint Committee on Finance and the Public Service should hear testimony from international and domestic experts of the pros and cons of the NAMA proposal vis-a-vis the alternatives that have been presented by other Parties and experts.

Detailed Observations on NAMA.

As I hope you appreciate, Fine Gael's preferred approach to resolving the bank crisis is based not on a dogmatic attachment to a particular model, but rather on a set of core principles: protecting the taxpayer from huge, unmanageable risks; minimising and ensuring a fair distribution of the losses associated with reckless lending by the banks and reckless investments by developers; and improving financial stability and credit availability for struggling businesses and families.

Notwithstanding our deep concerns about the principles underlying the Government's proposed approach to resolving the banking crisis, I am nonetheless concerned to submit detailed observations on how the draft NAMA Bill might be radically overhauled in order to protect the taxpayer and the wider economy.

Below I set out nine specific issues on which I would welcome further detailed engagement by the Minister at the Oireachtas Committee with a view to agreeing amendments to the draft Bill on which I hope all Parties might agree.

1. We want to explore how the Bill could be re-drafted to protect the taxpayer from over-payment to the banks by NAMA by minimising political interference in the process and by establishing a fully independent appeals mechanism that could also hear appeals against high valuations by NAMA.The Government had claimed prior to the publication of the draft Bill that the valuation process would be immune from political influence. But the draft Bill gives the Minister very substantial influence on the "adjustment factors" that NAMA must take into account when estimating the "long term value" premium over current market prices. Valuations and payments by NAMA to the banks can be over-ruled and increased by the Minister, while there is no corollary provision for independent or Ministerial challenge for over-payment by NAMA for bank assets.

2. We want to explore how the NAMA Bill could be re-drafted to ensure that owners of risk capital (both equity and subordinated debt) fully share in the losses resulting in write-downs by NAMA.In particular, we want further clarity as to what status the stated Government policy of avoiding nationalisation of the banks plays in the valuation process. We also want to understand the mechanisms for ensuring losses are absorbed by owners of non-equity risk capital (subordinated debt) in the event that the write-downs by NAMA more than wipe out all the equity in the banks.

3. We want to explore how the NAMA Bill could be re-drafted to allow for risk-sharing between the taxpayer and risk investors in the banks in the future work-out of the bad loans, as has been recommended by the IMF. We do not accept that the bank levy promised by Government to recover NAMA losses is a credible mechanism for risk-sharing between taxpayers and investors.In this regard, we would welcome your views on Professor Patrick Honohan's recommendation that NAMA should pay the banks less than fair value for bad loans, but in return give owners of bank equity and subordinated debt an ownership share in NAMA with upside potential.

4. We want to explore how the Bill could be re-drafted to re-assure the taxpayer that the over-riding objective of NAMA is to maximise the returns to taxpayers on assets purchased by collecting as much of the debts owed as possible, and to put in place the necessary clarity of mandate, robust incentives to achieve this objective, and set benchmarks of comparison. It is not appropriate that this be left to unpublished guidelines.

Only last November, the IMF finished a study on banking and property busts in seven other countries where the NAMA approach was adopted, and concluded that "Government-owned asset management companies appear largely ineffective in resolving distressed assets, largely due to political and legal constraints."

In layman's terms, the IMF believes that state quangos are much less skilled than private bankers at recovering loans from well-connected borrowers. In France, a similar state-owned asset management company in the 1990s lost a total of EUR18 billion (including funding costs) out of EUR28 billion of assets purchased from Credit Lyonnais.

In this regard, a major weakness in the draft Bill is the absence of any principles to guide its relationship with the developers, such as the policy on foreclosures, bankruptcies, work-outs or any of the other hard-nosed aspects of asset management which must be present to protect taxpayers. For example, without explicit protections, there is a very real prospect that in a few years' time, these same individuals will pop up again to buy these assets at an enormous discount, only this time they will be backed by funding from the same banks whose liquidity problems are now being eased. This will not, in my view, be acceptable to the public.

It is not conducive to public confidence that this be left to unpublished, future guidelines to be drafted by the Minister. The "rules of engagement" between NAMA and developers in default of their loans must be clarified in advance.

5. We want to explore how the Bill could be re-drafted to deliver new innovative mechanisms for political oversight, transparency and accountability of this extraordinary agency. These would include giving the Oireachtas an oversight and approval role for the appointment of the directors and CEO, providing "whistle-blower" protections for insiders exposing mal-practice and ensuring detailed oversight and reporting to the Oireachtas by experts appointed by the Office of the Comptroller and Auditor General of all key stages in the NAMA process, such as loan valuation and asset recovery.

6. We want to explore how the Bill could be re-drafted to require banks that participate in the Scheme to use a proportion of the extra ECB liquidity generated to support bank lending to SMEs and households. There is a danger than banks will use the extra ECB funding only to build up their cash reserves or to pay down other inter-bank or market liabilities.

7. We want to explore how the Bill could be re-drafted to deliver new supports for home-owners at risk of repossession, such as a Scottish-style equity purchase scheme by NAMA for householders facing repossession from mortgage lenders designed to bring their debts down to manageable levels (combined with some mortgage debt write-down by the banks).

8. We need further clarity on the method of payment for loans by NAMA, with particular regard to the coupon to be paid on NAMA bonds in short and long-term and other terms and conditions. We need greater clarity on the agreement with the ECB on NAMA bonds, including whether the ECB has committed to accepting NAMA bonds as collateral for liquidity operations over full duration of life of NAMA.

9. We want to explore how the Bill could be re-drafted to establish the principles under which NAMA will manage the property market (in which it will be a weak monopoly seller) in Ireland's long-term economic interests.I look forward to further engagement and debate on this most important issue for the country over the coming weeks.
Sincerely,
Richard Bruton T.D.

1983 Video of 5 Medjugorje Visionaries (in Italian)

1983 Video Medjugorje Visionaries

The movie is taken from a VHS that has been widely used in Italy in the early years and includes amateur shots made in November and December of 1983 when everyone had the good fortune to come to Medjugorje and could easily attend the live appearances ...
This documentary shows three apparition sequences involving five of the visionaries (Mirjana is missing). Former priest Fr Tomislav Vlasic is heavily featured.

Videos from Tehran showing Basiji and revolutionary guards using teargas and beating peaceful protesters-9/7/09

This video (bottom video) shows the time when protestors arrived at the intersection of Taleghani and Valiasr ave, heading toward Valiasr Square.

The duration of this rally was about 25 minutes and before arriving at Taleghani intersection, riot forces were not interfering but closed behind the crowd to block the accumulation of people. After arriving at the intersection of Taleghani and Valiasr ave, people continued toward Valiasr Square, as shown in this video. At this time, the anti riot forces shot teargas and followed people on motorcycles forcing the crowd to Taleghani ave.

I continued toward Chahar-rah Valiasr where people were blocked from going to Enghelab Square. The revolutionary guards on motorbikes hit pedestrians with batons. On my way to the subway station I saw a lot of military cars full of anti riot guard heading west, apparently to help their forces stationed at Enghelab square.

Iran 29/6/09: Shocking Video from Tehran- man gunned down

Contains graphic scene.This video was recorded on June 29th.

Iran:Tehran-Police brutality exposed in letter from “Rasul Akram” hospital

Police Brutality in Iran exposed

This comes from Revolutionary Road

Date: Wednesday 24th June 2009.
The following email in Farsi we received today (Wednesday 24th june). It is written by a doctor from “Rasul Akram” hospital in Tehran who says that some people were killed not only by one bullet as they found two or three bullets in some bodies, close to one another, showing that shooters used barrage shooting against people and not only a single shot. A 68 year old man had 3 bullets in his body, two on his left shoulder and one in the left side of his stomach.

The doctors of the “Rasul Akram”hospital say they had been faced with 38 people killed during last week’s protests. Apparently, police took the corpse of the dead bodies out from the hospital and carried them away by truck. Most of their families still do not know if their children have been killed. Besides, among the corpse there were some 15, 16 years old kids. According to the email, the crew of the hospital protested in the street next to the hospital giving out the information about the violence to the people. The photos attached are from this demonstration which appears to have taken place earlier this week.
Regards
-Where s my vote?

Iran:Report Live from demonstration at Baharestan Sq. Tehran today (24/6/09)

Excerpt of live blog by Revolutionary Road

More than 10.000 Bassij Milittias get position in Central Tehran, including Baharestan Sq.

In Baharestan Sq. in the Police shooting, A girl is shot and the police is not allowing to let them help
The girl who was shot was taken to a private clinic, not known yet of her well being...alive or not?
About 5,000 Protesters gatherd at Sadeghieh Sq, Bassij and Hezbollah attcking them
At Baharestan Sq plain clothes are between people and whoever talks they arrest him/her
We saw 7/8 militia beating one woman with baton on ground - she had no defense nothing

So many people arrested - young & old
In Baharestan we saw militia with axe choping people like meat - blood everywhere - like butcher
The military plain clothes have entered the crowd with high speed on bikes, they are beating people with cable and batons, almost everyone in the crowd is injured, there is blood everywhere!..

Video from Shiraz Iran: Pro Mousavi Protesters attacked by Basij (20/6/09)

Iran: 8 Pictures from Today Thursday June 18 of pro Mousavi protest in Tehran mourning those killed by regime

Photographs © Farhad Rajabali

　



　

　

　

　

Video: NATO jets shadowing Russian Tu-95 Bear

Video of NATO jets following Russian patrol planes filmed from the cockpit of a Russian aircraft.

Alaska: Exceptional pictures from Mount Redoubt Volcanic Eruption-23/3/09

Mud marks the high water mark along the banks of the lower Drift river valley.
Picture Date: March 23, 2009
Image Creator: Read, Cyrus


Flood waters cascading through a gorge carved in the Drift Glacier below the summit of Redoubt.
Picture Date: March 23, 2009
Image Creator: McGimsey, Game



View of the west margin of the Drift Glacier and ash deposits covering the adjacent slopes. The ice gorge carved by flood waters is visibe coursing through the center of the glacier (left middle).
Picture Date: March 23, 2009
Image Creator: Read, Cyrus


Image of ashfall, taken from Tordrillo Mountain Lodge on Judd Lake (just north of Beluga Lake, at the head of the Talachulitna River.) Photograph courtesy of Lel Tone.

Ash haze in Cook Inlet with the summit Mount Spurr visible. AVO/USGS

Flooding caused by the melting of Drift Glacier by the eruption. Flood waters reached as high as 25 feet. AVO/USGS

Ashfall on a lodge on Judd Lake. Lel Tone/USGS

Source of images: (Alaska Volcano Observatory )

Side Effects from Cervical Cancer Vaccine in Valencia Spain

Some cervical cancer vaccines were withdrawn following the side effects suffered by two 14-year old girls in Valencia Spain. One of the girls was admitted to the Intensive Care Unit of the Hospital Clínico in the city. The other girl was admitted to a normal ward. Both suffered from convulsions and other complications. Later a third a girl was placed in intensive care having suffered from convulsions.
According to Typically Spanish

The health monitoring system, El Sistema Español de Farmacovigilancia, registered as many as 45 cases of bad reactions to the cervical cancer vaccine, while sources at the Ministry for Health put the number at only five.

Today Typically Spanish reports that:

One of the two 14 year old girls from Valencia who was admitted hospital 19 days ago after a side effect reaction to the cervical cancer vaccine earlier this month has had to return to the UCI, Intensive Care Unit. She is said to be in a serious but stable condition, while the second girl remains on the general ward and is making good progress. The two girls received their jabs on the 4th and 6th of February in health centres in Burjassot and Valencia. The Gardasil vaccine, lot NH52670, resulted in them both suffering from convulsions and losing consciousness for a time. After withdrawing the lot concerned, the Valencia regional health authority has once again started the VPH vaccine campaign.

The Ministry for Health says that since Gardasil was approved in Europe in October 2006, more than 1.14 million doses have been distributed in Spain.

Obama's Irish Relatives interviewed and Whiskey is malted for the US President in Co. Louth

Embedded from RTE.IE

Video requires RealPlayer-Download here

While Barack Obama prepares for his first hours in office, staff at the Cooley Distillery in north Co Louth are already preparing for his last day in the White House.
Today an American wood cask has been filled with a special blend malt whiskey which will be put in storage to mature before being given to the US President-elect when he eventually leaves the White House...RTE

Barack Obama's great-great-great-grandfather, Fulmuth Kearney, was reared in Moneygall Co. Offaly (Ireland), then left for America in 1850, when he was 19......Kearney sailed to New York aboard the S.S. Marmion at a time when legions of Irish were leaving their famine-stricken island. The shoemaker's son made a life in America, and his family line eventually produced Ann Durham, who was born in Kansas, according to Ancestry.com. The Web site has posted some of Obama's records online.
Durham married a Kenyan, also named Barack Obama, who was studying in Hawaii, and in 1961 they had a son, Barack the new President....Washington Post

Iraqi Forces Prepare to Take Over from Coalition Forces on January 1

Ireland: Proposed World Trade Deal could mean BSE, Bird Flu & Foot and Mouth on your plate - Creed

According to Michael Creed -Fine Gael Agriculture & Food Spokesperson- the World Trade Deal could open floodgates to inferior quality food.
European consumer agencies have continuously focussed their attention on the price of food. Of course this is only right and proper. However less attention is paid to the dangers posed by cheap food imports to the EU. These are generally produced to inferior standards and in some cases may pose a threat to health. In many cases there is little traceability. EU farmers have been crushed by regulation and red tape. The highest standards of traceability are a sine qua non.
The EU Commission has failed to insist on the same levels of traceability for beef and chicken imports.

The Commission appears determined to sacrifice EU agriculture to ensure greater access to Third World markets for industrial exports. It is prepared to sacrifice security of supply. It appears negligent in its attitude to health threats posed by food imports to the EU.

The FG party has decided to put down a Private Members Motion in the Dail:
The following is the text of the FG press release:

Fine Gael Agriculture & Food Spokesperson Michael Creed TD has warned consumers of the threat posed to Food Safety in this country by the proposed World Trade deal currently being negotiated. Speaking prior to this week's FG Private Members' Motion calling on the Government to take action to prevent the deal being finalised, Creed has issued a stark warning to Irish consumers.

"Irish food producers have worked tirelessly, and invested heavily to ensure that the food on our tables is of the highest quality and fully traceable to source. The current World Trade Deal on offer will mean that all their efforts were in vain - as the EU market will become fully exposed to imports from dollar-a-day economies, where hygiene, food safety and animal welfare are non-issues.
"The Government has failed in their responsibility to consumers, by not ensuring that food safety is a pre-requisite to any World Trade deal. We will be subjected to Battery Poultry from Asia, Brazilian Beef which has already been condemned by the European Food and Veterinary Office, and who knows whatever else from every corner of the world.
"It is widely believed that agreement on the World Trade Deal is imminent. Consumers need to be made aware of the potential horrors that are in store if the Government doesn't act now."
Ends

Text of Fine Gael Private Members' Motion below:
That Dáil Éireann Notes:
- With concern the political failure of the Government to have non-trade issues debated in the context of the World Trade Organisation Talks.
- The concessions already made to the WTO by the EU in CAP reforms in 2003.
- The failure of the Government to honour its own commitments in this regard as outlined in the Programme for Government.
- The fact that the current proposals would devastate Irish Agriculture and in particular would decimate the Irish Beef Sector with the loss of thousands of jobs both at Primary Producer and Processing Level.
- That the Common Agricultural Policy currently provides EU consumers with a safe and secure supply of food produced to the highest environmental and animal welfare standards.
- The financial consequences to the Irish economy to be at least €4 Billion P.A.
The current conflict between the WTO proposals as pursued by Commissioner Mandelson and Article 39.1 of the Treaty of Rome.
Calls on the Government:
- To mount a major political and diplomatic initiative to protect the Common Agricultural Policy and Irish Agricultural interests.
- To ensure that food safety & security, climate change, animal welfare, and human health interests are priorities in the context of any future agreement in the WTO.
- To immediately publish a sectoral analysis on the impact of the current proposals for Irish Agriculture.
- To signal its willingness to use all necessary measures to defeat the current WTO proposals.