Back in 2004, Texas billionaire Andy Beal decided the credit and mortgage markets were getting out of control, with too much risk and too much easy credit. So he stopped buying mortgages and the like. Within in few years, regulators and credit agencies were pestering him about not buying mortgages.
You can guess the rest. His banks dodged the bullets and are now expanding, buying distressed loans for ultra cheap prices.
These days Beal’s still fairly pessimistic and predicts that about half the country’s banks, 4000, would go bust if they were being honest about their books.
But the good news: Now he’s the model banker, though once again he’s annoying the government. Sheila Bair seems to think of him as a nuisance picking off assets at too-low prices and generally not playing ball with everyone else. But it should be obvious we need more Andy Beals, not less.