This is a guest post from Loren Picard, Senior Managing Director with LMA Capital, Inc. He focuses his efforts in the mortgage and P2P financial solutions arenas. He can be contacted on LinkedIn here.
A revolution against rent seekers is upon us. Who are these rent seekers in the financial markets today? This is not another tirade against rich guys on Wall Street who don’t get it; ranting against the beneficiaries may feel good, but it smacks of envy and does not solve any problems. Worse, it can lead to an Argentinian style thievery on a truly gargantuan scale—leading us all to doom.
No, these rent seekers are the large institutions, both private and government-owned, along with their regulators, who have built a comfortable symbiotic relationship maintaining the status quo. The newly formed CFPB is a weak response and will themselves eventually become part of the problem.
The Revolution Has Gone Viral
The revolution is starting out slowly and in the background. Something recently happened that will be misinterpreted for a while, but will nonetheless be seen as the day the revolution went viral. The event: John Mack joined the board of Lending Club. For revolutions to get started, it is the intelligentsia which needs to be made aware of the spark which lights the fuse, not the masses. The masses will be herded into the square in due time. In this case, the intelligentsia are the people who work in all manner of the financial services industry—including the reviled rich guys. [Read more…]