NAMA. The banks' shareholders are happy.

So, we all now know how much of our money the Government wants to give to the banks under the auspices of the National Asset Management Agency. €54 billion of taxpayers’ (and mortgage payers) hard-earned to buy a bad loan book of €77 billion, even though the current market value of the properties underpinned by the loans is estimated at €47 billion.

Many would question the optimism of that current “valuation” in today’s market. Furthermore, the only way they are going in our little banama (sick) republic is downwards. But Brian Lenihan was on Morning Ireland earlier telling us what a good deal NAMA represented for us all, and how the property market was “near the bottom”. Right.

The problem with NAMA is the people behind it – Lenihan’s Government – are the ones that created the mess in the first place. So do you believe Lenihan’s upbeat, self back-slapping, assessment of his own plan, or his assessment of the state of the housing market? Or would you take more note of the following assessement by Barclays Capital, which appeared in the Irish Times on the 11th September:

Barclays noted Irish house prices remain the most expensive in Europe and are “especially elevated” in relation to disposable income. “There is no evidence to suggest that Irish house prices have yet reached a trough, despite the exceptionally low interest rates prevailing.”

Barclays paints a picture of a future Irish economy marked by extreme caution among consumers, following a reckless decade in which household and other private sector debt expanded at the most rapid pace in the euro zone. “With the Irish labour market deteriorating rapidly, real household disposable incomes are likely to be squeezed still further in the months ahead and precautionary savings look set to climb higher.” The squeeze on incomes could be even tighter if the next budget is as much of an “austerity budget” as expected.

But in the meantime we have to suffer the consequences of paying near-bubble prices for the bad property loans of the banks in order to spare them and their shareholders the vigours of the market. Once again, it seems that it’s all about privatising profit, and nationalising loss.

As if to illustrate, AIB shares were up 30% in the first twenty minutes of trading on the Irish Stock Exchange this morning.

Nice to see someone is happy.

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