It’s a good question and I think the answer, in simple terms, is that he’s being badly advised. That said, I think there’s only West Ham that might be buyable, and of a decent size. Perhaps he sees Newcastle as being relatively cheap and sees the mismanagement of Man U and Arsenal as being an opportunity to break into the top four. If I were him I’d be waiting to see what happens with Man City and FFP.
There’s talk of wanting Pochettino, presumably they think he can do with Newcastle what he did with Spurs but Spurs were already a decent club when Poch came in, they’d been in the champions league with Redknapp and made a lot of money to reinvest from selling the likes of Bale, Modric, Berbatov, they’d been building since ENIC took over, with a long term strategy.
I suppose clubs like us and Leicester have made it look easier than it is.