Jim Rogers Contradicts Wall Street -- The Worst Is Yet To Come
Jim Rogers, a co-founder with George Soros of the Quantum Fund, has contradicted his old partner and most Wall Street firms with his prediction that the global credit squeeze caused by US housing loan delinquencies is not nearing its end. According to Bei Hu writing on Bloomberg.com on May 8, Rogers, the chair of Rogers Holdings, said at a press conference in Singapore, “I doubt that we’re half way through the financial crisis. We certainly haven't hit the bottom as far as I'm concerned.”
“Most of the European banks and Asian banks haven't taken a huge write-off yet,” Rogers commented. “I suspect there are more write-offs to come in Europe and Asia,” he advised.
This contradicts Quantum Fund co-founder, George Soros, who said that the "acute phase" of the financial crisis was nearing an end even as the U.S. economy was just beginning to feel the effect.
Rogers' comments also contradict recent comments by Wall Street CEOs. On April 16, JPMorgan CEO Jamie Dimon said that the credit-market freeze is more than half over. Close to a week later, Citigroup CEO Vikram Pandit noted that the credit market contraction is abating. Other CEOs offering similar comments include Richard Fuld of Lehman Brothers, Lloyd Blankfein of Goldman Sachs, and John Mack of Morgan Stanley.
Since the beginning of 2007, the world's largest banks and securities firms have posted $319 billion of asset writedowns and credit losses. In the past 10 months, 65,000 jobs were cut.
For now, Rogers has said that he is not buying financial stocks and expects an additional drop in the share prices of U.S. investment banks, Fannie Mae, and home builders as the credit crisis reduces investor demand for all but the safest assets such as US Treasury debt.
