With Congress playing hard to get (Dodd just reported on the wires as calling the Paulson plan "not acceptable" in its current form) a little follow up from a May posting on the likely duration of the credit crisis seems due.

Several experts were cited in that article setting out the belief that the worst was past.

1. Chris O'Meara, the former chief financial officer of the former investment bank Lehman Brothers said on 21 September 2007:

"I think the worst of this credit correction is behind us"
A world of pain and failed "active hedging strategies" later and things look so different.


2. In May 2008 John Thain, the former CEO at the formerly independent Merrill Lynch said:

"Well, I think that the the vast majority of the credit-related problems, which of course began with sub-prime and then moved to other classes, are in fact over."

Mr Thain subsequently revised his view and now works for Bank of America.


3. Mr Buffet, also in May 2008 said:

"The worst of the crisis in Wall Street is over. In terms of people with individual mortgages, there's a lot of pain left to come.''

Clearly Mr Buffet remains a man to watch mainly when he puts his money behind his opinions. But at least he was half right. UPDATE: He just put down some money.


4. Current man in the news Hank Paulson said, again last May:

"There's progress, I think we're closer to the end of this than the beginning...Later this year, I expect growth will pick up"
The good news with this view is that he could still be right on both counts. The bad news is that for the moment he is not.


5. Bill Miller of Legg Mason fame told his shareholders in April that:

"We will do better from here on, and that by far the worst is behind us. The credit panic ended with the collapse of Bear Stearns, and credit spreads are already much improved since then."
No comment.


6. Sir Win Bischoff, Chair of Citi gave by far the most equivocal quote back in May:

"...2008 is not going to be easy. But I think there are sufficient numbers of people working very hard to get (the financial system) out of this and I think we will be able to do so."
Admirable fluff.


7. Which brings us to Alan Greenspan. Difficult to find direct quotes from the man in the wake of Bear Stearns' implosion. However, "attendees" of one of his $200,000 appearance fee Specials in New York in May report him as saying the worst was well behind.

You may wonder why there is no formal record of this declaration. The answer, according to the organisers of the NY conference, was that the Maestro demanded a media ban. This means that it is difficult to contrast his then position with his now (ie September 2008) position of:

"The current credit crisis is the most wrenching in the last half century and possibly more"
Apparently Mr Greenspan thought this safe and uncontroversial enough for media coverage but could not get anyone to stump up $200k for it


8. Best for last. The Bank of England, in its Financial Stability Report of last May claimed that credit markets:

"overstate the losses that will ultimately be felt by the financial system and the economy as a whole".
Captions on a postcard.

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