Ranieri to the Rescue

I remember the first time I read Liar's Poker. A young Midas was on his first ever flight back from Rio, reading about the legends of Salomon Brothers and feeling like King Salomon himself. Back in those days I would go into places like Club Monte Carlo and ask questions like " am I allowed to touch? ", drawing strange looks and laughter. But none of that mattered on that near empty flight back to JFK, I picked up Michael Lewis' book and flew away to a different world.

I immediately identified with Lewis Ranieri. Louie was one of the original rainmakers, pioneering securitization and mortgage-backed securities. Lewis Ranieri was a legend who left Salomon at its peak in 1987 after holding the position of Vice Chairman. He introduced quants to Wall Street in order to create collateralized mortgage obligations and changed the way the bond business worked.

Louie Ranieri has personified the Great American Scream Machine that is Wall Street. One minute you're up, the next you're down.

In 2004, Business Week called him one of the great American innovators of the past 75 years. Four years later, Nobelist Robert Mundell included him into the list of "The Five Goats Who Contributed to the Financial Crisis".

He has always been used as the stereotypical fat cat banker villain. A favorite target of high brow populists and naysayers of free markets.

That is why this story makes me smile.

Who's that riding to the rescue of nearly foreclosed upon folks?

Lewis S. Ranieri. That's who.

Once again, proving the motto that "greed is good". Little funds like Louie's newest ( Selene Residential Mortgage Opportunity Fund ) are swooping into bureaucracy frozen banks and picking up delinquent loans for dimes on the dollar. They are then able and most importantly, willing to renegotiate mortgages down to manageable levels.

Naturally, your local bank is not crazy about this sort of fund. It forces THEM to acknowledge the stupidity of giving $500,000 house loans to people bringing home $37K. THIS my friends, is the 800 pound gorilla in the room. The REALITY nobody wants to talk about and the TRUTH that has been getting swept under the rug for years.

What has and will always pull America out of the quicksand has been creativity and ambition. Booms and busts are part of capitalism. We cannot give up 200 years of progress, because a few water cooler pimps got smacked down. Can't stop, won't stop.

Louie Ranieri is a great American. Today he is doing what he has always done, make bank. He is also reminding us, that crises of this sort do not get solved by big government. The losers pay the winners and that is the only bottom line that can clear the balance sheet. This is what brings recovery and growth, not another welfare check.

This story should make all of you guys proud of who you are and where you are trying to go. For those that already have, keep it moving.

Wall Street: the place to get paid and do some good.