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The Uberization of Banking

Andy Kessler has no idea what caused the Financial Crisis.

" . . . banks use leverage, but that’s courting trouble [give me a break - it wasn't balance sheet leverage at banks that caused the Crisis]. SoFi doesn’t take deposits, so it’s FDIC-free. The firm isn’t a bank, at least in that sense of the word. Instead, SoFi raises money for its loans, most recently $1 billion from SoftBank and the hedge fund Third Point, in exchange for about a quarter of the company. SoFi uses this expanded balance sheet to make loans and then securitize many of them to sell them off to investors so it can make more loans. . . . Yes, this sounds like what was happening before the subprime meltdown. But with a highly tuned algorithm...


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