I saw a link to this quick “lunchtime read” from Alex Rudloff, creator of Emurse.com. Emurse is a website I recommend to any professional looking to beef up their online presence… Alex just announced that AOL acquired Emurse – huge congrats!
Back to the article – it’s about Andy Beal, the guy who practically shut down his bank for four years because he didn’t like the lending that was happening. He thought it was all bad, and he was going to wait it out until it got more reasonable.
What he thought would take six months took four years, and now he is in a very healthy position to capitalize on all of the vast mistakes from other lending institutions.
When I read this I thought “this is the American Dream! Go Andy!” Not like he needs any encouragement from me… he’s a billionaire and I’ll never become one.
Here’s a profound quote from the article (more than 1/2 down):
He thinks the government is going to be “disappointed” by its various programs to revive lending….
“Banks are on a prayer mission that somehow prices will come back and they won’t have to face reality,” Beal says. And that reality, according to Beal, is going to get a lot worse. “Unemployment is going over 10%, commercial real estate hasn’t even begun collapsing and corporate credit defaults are just getting started,” he says. His prediction: depression, without bread lines this time, thanks to the government safety net, but with equal cost to society.
Wow. Not that he’s a prophet or anything but he did figure out that not diving into the free profit from yesterday would keep him healthy today.
The outcome he predicts is bleak. And we thought we were on the upswing.
Here’s a link to the article.