E-Z Way To Make A Billion Dollars

My friend Steve sent me a link to an article by Henry Blodget from The Business Insider, showing how easy it is to make a billion dollars these days. There’s really only one tricky step, but other than that, it’s just follow the steps and collect the riches.

First, form a bank. Anybody can do it. Just a bunch of paperwork. Second, round up a bunch of your unemployed or under-employed pals to be “bankers”. The next step is the tricky one, but if you’re of average IQ and have above average drive, you can do it. You have to raise a billion dollars in equity.

You do that by showing this plan to fat-cat investors, and odds are they’re greedy enough to want in. You’re doing all the “leg-work” and they’re just along for the ride.

Next, now that you have your billion in equity, borrow 9 billion more from the Fed. Toxic Timmy Geithner will let you have that amount at an annual cost of one-quarter of one percent.

Now you take your ten billion and invest it all on 30-year Treasury Bonds, which pay 4.45%. All that’s left now is to sit back and watch the cash flow in. You’ll be earning around 400 million bucks a year, unless the Fed raises short rates. But they don’t have the backbone.

Pay your “banker” pals (from step 2) huge salaries for all their “hard work” and then - it’s BONUS TIME!!! The industry standard is 50% of revenue, so you’ve got a $200 million dollar bonus pool. Give each of your underemployed/unemployed friends…ah, I mean, “bankers”, a million dollar bonus, and keep all the rest for yourself.

Look at all the jobs and value you’ve created! You’re an economic engine!
If you really want to play the Wall Street game and get greedy, take your venture public. You’ve got no risk on your balance sheet - you’re invested in T-Bonds - so sell a quarter of your “bank” at the standard 20-times earnings, and BAM! You’ve just made a billion dollars.

Use your billion in new equity to start the whole cycle over. In a few years, you’re a multi-billionaire.

If you feel lucky, start gambling on things more risky than T-Bonds. You’ll be able to find a lot of guys who used to work on trading desks at places like Enron, AIG, Goldmine-Sachs, and so on, to help you cook up some really far-out things to gamble on. And to create bets on bets (derivatives) to really leverage your butt and get the BIG money rollin’ in!

Don’t worry about the risk.

The taxpayers will bail you out, and you can start all over again….just like in the real world!