[Pen-l] FT: The Banker Who Said No

[Laurent GUERBY <laurent@xxxxxxxxxx>]

http://www.forbes.com/2009/04/03/banking-andy-beal-business-wall-street-beal.html
<<
Bernard Condon and Nathan Vardi, 04.03.09, 05:00 PM EDT 

While the nation's lenders ran amok during the boom, Andy Beal hoarded
his money. Now he's cleaning up--with scant help from Uncle Sam.

Standing outside the glass-domed headquarters of his Plano, Texas, bank
in March, D. Andrew Beal presses a cellphone to his ear. He's discussing
a deal to buy mortgage securities. In just a few minutes, the deal's
done: His Beal Bank will buy $15 million of face value for $5 million. A
few hours earlier he reviewed details on a $500 million loan his bank is
making to a company heading into bankruptcy--the biggest he's ever done.
A few floors above, workers are bent over computer screens preparing
bids for chunks of $600 million in assets dumped by two imploded
financial firms. In the last 15 months, Beal has purchased $800 million
of loans from failed banks, probably more than anyone else.

Andy Beal, a 56-year-old, poker-playing college dropout, is a one-man
toxic-asset eater--without a shred of government assistance. Beal plays
his cards patiently. For three long years, from 2004 to 2007, he
virtually stopped making or buying loans. While the credit markets were
roaring and lenders were raking in billions, Beal shrank his bank's
assets because he thought the loans were going to blow up. He cut his
staff in half and killed time playing backgammon or racing cars. He took
long lunches with friends, carping to them about "stupid loans." His odd
behavior puzzled regulators, credit agencies and even his own board.
They wondered why he was seemingly shutting the bank down, resisting the
huge profits the nation's big banks were making. One director asked him:
"Are we a dinosaur?"
[...]
>>

Says a lot about the psychology of regulators.

Found via techdirt:

http://www.techdirt.com/articles/20090405/1746494394.shtml

Laurent
http://guerby.org/blog



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