Legal Commentary

How Much Worse Can The Economy Get?

By Patrick J. Lamb

I ran across an article in the business section of this morning's  Chicago Sun-Times that made my blood run cold.  Columnist Terry Savage was recounting how Bert Dohmen, publisher of The Wellington Letter, predicted the current credit crisis in March 2008, saying that "[t]he enormity of this problem is beyond anything we have ever seen in financial history."    In Dohmen's September 28, 2008 edition of The Wellington Letter, he recounts how Jeffrey Immelt of GE recently said we have a " once in a hundred year" crisis in the credit markets.  Former oracle Alan Greenspan just said that we have a "once in a century" credit crisis.  And to top it off, Warren Buffett recently said on CNBC: "Last week we were at the brink of something that would have made anything that's happened in financial history look pale." He later added, "If Congress doesn't help us on this, heaven help us."  Nothing like all of this to start off a Monday.

The kicker?  Dohmen is quoted in the Sun Times article, saying "Most bear markets, after a major bubble has burst, decline 80-90 percent, going back to where the bubble started....So until a major index is down over 80 percent, I will not even start looking for a bottom."  There is a discussion about a "fake rally" and then the real bad news.  So when is the fake rally  going to occur?  Dohmen says he'll make that prediction for his subscribers, but leaves the rest of us with this prediction: "But I can say the worst is still ahead over the next several years for stock market investors." 

Of course, our clients are the ones that make up the market.

Full post as published by In Search of Perfect Client Service on October 27, 2008 (boomark / email).