Make money creating the crisis. Make money solving it!

Here's the skinny. The guy gives tons of loans to people who can't afford them and sets the stage for the sub-prime crisis. The crisis erupts. He buys the loans back from the government ridiculously cheaper than the government bought them from the banks using taxpayers money. As a result he can afford to lower the interest homeowners pay on those loans and still make a 20% profit from them. Desperate to keep their houses, homeowners will gladly say thank you to him for helping them keep their houses.

And I want to ask a very simple question. Why is the government selling the loans to him? Why can't the government hire Him or other people like him to do the job of lowering the interest rate on those loans itself? Why let Him do the job via PennyMac and let Him keep the 20% profit? Why not have the government do the job and return the 20% profit to taxpayers whose money it used to buy the loans in the first place?

Is our government stupid, incapable or what? Or is the former No2 of Countrywide Financial that brilliant?

I have to say, just by looking at the name of his company PennyMac, he is a brilliant shyster. Penny for thriftiness and Mac for creative! Son-of-a...spiv :((

Check the full story here

http://www.thinkaloo.com

Does starting a new bank make sense?

My reasoning for starting a new bank is that creditworthy customers would rather trust that their money is held with a bank that is 100% free of toxic assets and that it won't go bust. People tell me I must be crazy to want to start a new bank because a) no one trusts banks any more and b) no one has money any more. I don't think b is true and a happens because existing banks have a lot of bad loans/investments in their books. A new bank that has none of it can earn the trust of creditworthy customers. It seems good business to me to want to start a new bank despite the turmoil in global finance.

http://www.thinkaloo.com