Get rich by failing

Here’s a deal for you, as detailed by Saturday’s New York Times. First, borrow $10 million from a bank to run a gas station/casino chain. Default on the loan, then have your lender fail and the FDIC take over the loan. Now buy back your debt for less than 50 cents on the dollar and there you are: last week you were $10 million in debt with a creditor breathing down your neck. Today you own your business again, freed of half that debt. It’s a fresh start – a “stimulus” to coin a term, and it’s all paid for by U.S. taxpayers. This all just keeps getting better.

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One response to “Get rich by failing

  1. Toke

    That’s what the investment banks were busy doing with their first tranche of funding. Check out Morgan Stanley’s results for example. Only problem with doing that p.a. is that the IRS will have its hand out for taxes on the $5 million ‘gain’