September 17, 2008

Time to Start a Bank

Reading a Main Street v Wall Street piece by Ed Cone reminded me of that old chestnut of capitalist wisdom "when blood's running in the streets, the greatest profits are to be had." Well, the financial streets are running with blood and major profits are to be had. Good deals are left on the table that will provide great profits at reasonable risk rates because the incumbents all lost their minds in the preceding expansion and badly invested their depositors money. With only projects that would get funded in any economy currently being looked at by many banks, the financial players willing to look closely and invest in a great story have been winnowed down to near zero.

This is where the previously prudent can make a killing by funding those projects that almost qualify for bank financing and would have qualified even under the normal scrutiny of 20 years ago but do not qualify today. These sorts of ventures will not make any headlines. Why should they? The more they draw attention to themselves, the more competition they will have from other groups. But those seeking capital will find them and be quite happy for their discovery.

Posted by TMLutas at September 17, 2008 10:18 PM