NAMA is also the moniker of a sushi bar in Norway.

Of course, there is a good and bad side to Nama.  First, the bad side.

It represents a very large investment in real estate.  Typically, such investments are Real Estate Investment Trusts(REITS).  They come in three flavours: investment in real estate, investment in the loans underpinning it and hybrid.  Nama is the latter.

REITS are usually the most liquid form of real estate investment and trade on markets such as the New York Stock Exchange.  Unfortunately, Nama is not liquid and will not trade.  The lack of a market price severely complicates its true value.

In general, REITS are quite risky – exhibiting about two-thirds the volatility of the US stock market.  Given the lack of a market price, it is difficult to ascertain the risk of Nama.  But a lack of trading is usually associated with higher rather than lower risk.

REITs are usually considered efficient ways of investing in real estate.  But Nama is an investment in a dysfunctional banking sector that is over-reliant on a dysfunctional property market.

It suffers from adverse selection – instead of investing in good loans, the purpose is to support bad loans.  There is little attempt to avoid the riskiest loans.

The Nama REIT entails moral hazard with little attempt to control the bad activities of the banks.

Overall, Nama is a sub-prime product; banks give money to bad developers under bad credit terms and the Government then gives money to banks under bad credit terms.  On the other hand, Nama is also the moniker of a sushi bar in Norway.  The sushi is good.