14
Apr
09

Want Unwanted Attention From the Feds? Run a Solvent Bank.

Excellent article in Forbes. Andy Beal runs his bank in a prudent manner and that seems to raise red flags in Washington.

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Beal has barely got a dime from the feds. A self-described "libertarian kind of guy," Beal believes the government helped create the credit crisis. Now he finds it "crazy" that bankers who acted irresponsibly are getting money and he’s not. But he wants to exploit their recklessness to amass his own fortune. "This is the opportunity of my lifetime," says Beal. "We are going to be a $30 billion bank without any help from the government." (A slight overstatement: He is quick to say he relies on federal deposit insurance.) Not much next to the trillion-dollar balance sheets of the nation’s troubled banks, but the lesson here might be revealed in the fact that this billionaire is not playing with other people’s money–he owns 100% of the bank and is acting accordingly.

Then came a shocker: Amid one of the most reckless lending sprees in history, regulators focused on the one bank that refused to play along. Beal’s moves confused and worried them, and so they began to probe him with questions. "What are you doing?" he recalls them asking. "You’re shrinking yet you’re raising capital?"

Next, the credit rating agencies started pestering him about his dwindling loan portfolio. They never downgraded him but scolded him for seeming not to have a "sustainable" business model. This while their colleagues were signing off on $32 billion of bum collateralized debt obligations issued by Merrill Lynch.

Downgraded for having a “sustainable” business model? We are truly in Bizarro World.


5 Responses to “Want Unwanted Attention From the Feds? Run a Solvent Bank.”


  1. 1 LibertyVini Apr 14th, 2025 at 11:45 am

    How DARE he not participate in the government’s plan to destroy the dollar! The NERVE of that guy! Look for a sheaf of tax laws to be written just for him!

  2. 2 The State Apr 16th, 2025 at 10:25 am

    thought you might enjoy this twitter

    http://twitter.com/ourenemy

    it’s from the point of view of the state

    thanks man!

  3. 3 Dave May 19th, 2025 at 1:04 am

    So this dood is, “a libertarian kind of guy,” huh?

    Spoeaking as a card-carrying Libertarian, I find it very interesting lots of “libertarian kinds of guys” have cropped up all over after the ignoramus, fundamentalist, domestic terrorist neocon criminals lost the White House in November.

    You buttmunchers are as “libertarian” as my left nut and I, for one, will not stand buy and let you Republican defector COWARDS smear my party with your repugnant, idotic ideas and failed, harebrained theories.

    Get lost, every stinking one of you pukes.

  4. 4 matt May 23rd, 2025 at 7:43 pm

    i would like to point out that the author misquoted the Forbes article at the end. the article said “…never downgraded him but scolded him for seeming not to have a “sustainable” business model.” then the author of this blog said that he was “downgraded for not having a sustainable business model…” my point is, he was never downgraded (according to Forbes), but the blog makes it seem like he was.

  5. 5 Joe Pulcinella May 26th, 2025 at 8:24 am

    Dave: Huh?

    Matt: I did include the entire quote from Forbes in context. What you read from me was pointing to what I read as an implication that the scolding may very well lead to a downgrading since there is no area of any business that can be left untouched by the federal government.

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