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Most investors are going to sit on the sidelines until they’re more certain the sharks have left the waters and it’s safe to go back in. The write-offs have been far worse than anyone would have imagined.
—Bruce McCain, the Cleveland-based head of investment strategy at Key Private Bank, which oversees about $30 billion.
“Monetary policy makers around the world certainly understand what they are doing much better than they did in the early 1970s. I’m sure that policy makers will not allow inflation to rise any more and they’ll bring it back down.”
—Steve Cecchetti, Brandeis
Investment banks and securities firms in the past 10 months have cut 83,000 jobs amid losses and writedowns of $383 billion.
“These substantial home price declines bring positive and negative news. For homeowners and financial market observers, these declines spell further erosion in home equity levels and potentially more trouble for mortgage markets. To prospective home buyers who have been shut out of homeownership because of affordability constraints, these declines may be welcome news, as are continued low mortgage rates.”
—OFEHO Director, James Lockhart
“Over the past year, prices fell 3.1 percent between the first quarter of 2007 and the first quarter of 2008. This is the largest decline in the purchase-only index’s 17-year history.”
“We had a spectacular era of financial success that was extended by the subprime mortgage mania to 2007. But I think the golden age of Wall Street is over.”
—Barton Biggs, managing partner of Traxis and former chief global strategist at Morgan Stanley until 2003.
“Imagine what the U.S. financial system would look like if $69 billion in capital did not come in November, December and January from the sovereign wealth funds. It would have been a lot messier, the credit crunch would have been a lot worse, the de- leveraging would have been a lot more severe.”
—Mohamed El-Erian said at a conference in Los Angeles yesterday.
“the industry’s wage costs are about 10 percent too high after the credit bubble. If the excess were all recouped through job cuts, it would imply an additional reduction of more than half a million.”
—Thomas Philippon, a professor at New York University
73k down. 17k to go.
“From my perspective, I think that we don’t know if the storm has passed or if we are still in the eye of the storm…Are there other shoes to drop and new events or new shocks that will come to the fore? In my view, this is probably as bad or worse than the 1989-1990 crisis and may even rival the worst crisis we’ve seen since the end of the Second World War.”
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