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Realistbear

Christopher Wood Who Predicted Credit Melt Down Speaks

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http://www.telegraph.co.uk/money/main.jhtm...2/ccprof122.xml

Chris "Christopher" Wood: the man who predicted the subprime crisis

Last Updated: 2:19am BST 22/09/2007

Mark Kleinman talks to the influential investment strategist credited with being the first to predict the US sub-prime meltdown
The world's central bankers might be well advised to steer clear of Christopher Wood. Likewise Adam Applegarth, the chief executive of Northern Rock, the mortgage lender whose share price has sunk faster than the proverbial stone. The reason? Wood, a managing director and chief strategist of the broking firm CLSA, doesn't think much of them right now, and he isn't pulling punches about why.
Bank of England Governor Mervyn King should be "feeling like a schmuck" after the Bank of England's bail-out of Northern Rock, says Wood. As for the bank, he is unimpressed with its dependence on money-market funding – its £80bn in mortgages outstanding supported by just £2bn of shareholders' equity and £78bn of mostly short-term debt, he says, "would not disgrace a Thai finance company prior to the Asian crisis"...../
"What the Bank of England has done doesn't really pass the smell test," said Wood. "Northern Rock was just about the most extreme mortgage lending model you could find. It managed to run into trouble even before a housing market downturn in the UK, which is a truly astonishing feat."
Quite apart from the fact that the credit crisis is rippling its way around virtually the whole world, it is understandable that Wood has taken such an interest in the misfortunes of a relatively small mortgage bank in northern England.
..../
That intellect* has also diagnosed a sober prognosis for the health of the British economy and its ability to withstand a downturn in the City, one of its principal growth engines. Wood's view, that the UK economy rests on a tripod of the housing market, the City, and sub-prime consumer finance, makes an alarming outlook.
He said: "If you told me that I had to choose in the next three minutes whether to buy an apartment in London or New York, I'd be choosing New York every time at the moment. The UK economy is heading for a sharp shock. It just remains to be seen how bad."

I could not agree more. Interesting that Christopher was a bit early in predicting the crunch. The NR episode is the tip of a major iceberg and the bottom line (highlighted in red) should serve as a warning to those who think Gordon's miracle is going to survive the winter. As goes HPI so goes sterling and, for that matter, the economy.

The World Bank stats are interesting in that they back up what Christopher is saying in relation to the "tripod" and the fact that we are heavily dependent on the banking sector which is mired in the subprime related market. According to the World Bank the UK is by far the most indebted nation on the planet in relation to bank liabilities.

Get ready, its going to be a hard winter ahead. Gordon seems to be keeping his head down recently wouldn't you say?

______________________

* Another "Intellect" said the same thing this past week: Al Greeenspan stated that the UK economy would suffer more pain than the US for much the same reasons as Christopher gives.

Edited by Realistbear

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It's also interesting to note that whilst he has been proven right in the end, he like many on this forum were "a little early" calling the US sub-prime issue - at least the majority on here can claim to be in line with someone who is now held in high regard by the city.

Who is giving us our bonuses this year,

Regards

SB

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He said: "If you told me that I had to choose in the next three minutes whether to buy an apartment in London or New York, I'd be choosing New York every time at the moment. The UK economy is heading for a sharp shock. It just remains to be seen how bad."

It all can't be that bad if he's still thinking about realestate, just a thought. <_<

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It's also interesting to note that whilst he has been proven right in the end, he like many on this forum were "a little early" calling the US sub-prime issue - at least the majority on here can claim to be in line with someone who is now held in high regard by the city.

Who is giving us our bonuses this year,

Regards

SB

Indeed. A little early would be putting it rather mildly. Just as well he wasn't trading your money with his towering intellect. Predicting a credit crunch two years ago is a joke.

I remember in 1997, after the Asian crisis was analysing the global economy and I came to the conclusion that personal debt was going to do for the US economy. Perhaps if I had published I'd be a genius? It was impossible to say exactly how it was going to happen then and it was impossible two years ago. Why didn't he see it two-and-a-half- years ago like Fingus Trevallian III (FT3) (who trades 30bn in loose money down at Shatzer, Blitz & Kibbitz?) or twelve years ago like cgnao? (I hear market people;-)

The debt problem has been obvious for a very long time. The mortgage problem has been obvious for a very long time. But pegging the actual timing is the hard part.

It is preposterous to look back two years and find this guy (not that he is talking shit; he's just talking the same shit that many many people have been talking. Good for him. Can you ask him what exactly is about to happen please? I need some timing on my pension fund shorts? I'm tired of getting whipped out; I need a proper intellect onside.) :lol:

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It all can't be that bad if he's still thinking about realestate, just a thought. <_<

Does he mean as an investment though?

Or does he mean to live - for instance, is he also referring to the likelihood of jobs like his being under threat in London vs New York?

He doesn't really make it clear.

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Predicting a credit crunch two years ago is a joke. ...Can you ask him what exactly is about to happen please? I need some timing on my pension fund shorts? I'm tired of getting whipped out; I need a proper intellect onside.) :lol:

dstars is right. It reminds me of the betting tipsheet scam where you are offered a subscription for £1,000 following 2 free tips. Send out 64,000 emails predicting 8 different winners at the gee-gees, 8,000 emails per outcome. Next race send 8,000 emails to the winners, again with all 8 outcomes covered, 1,000 emails per outcome. The winners have now seen two correct predictions. What's the "betting" you now get a fair few sign up to that £1,000 subscription.

The losers forget your predictions and forget your name. Try them again with different marketing in 12 months.

I'd like to know how many wrong predictions "christopher" has made in the past 24 months (besides being early on property) before I adpt him as my guru.

Edited by Sledgehead

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http://www.telegraph.co.uk/money/main.jhtm...2/ccprof122.xml

Chris "Christopher" Wood: the man who predicted the subprime crisis

Last Updated: 2:19am BST 22/09/2007

Mark Kleinman talks to the influential investment strategist credited with being the first to predict the US sub-prime meltdown
That intellect* has also diagnosed a sober prognosis for the health of the British economy and its ability to withstand a downturn in the City, one of its principal growth engines. Wood's view, that the UK economy rests on a tripod of the housing market, the City, and sub-prime consumer finance, makes an alarming outlook.
He said: "If you told me that I had to choose in the next three minutes whether to buy an apartment in London or New York, I'd be choosing New York every time at the moment. The UK economy is heading for a sharp shock. It just remains to be seen how bad."

I could not agree more. Interesting that Christopher was a bit early in predicting the crunch. The NR episode is the tip of a major iceberg and the bottom line (highlighted in red) should serve as a warning to those who think Gordon's miracle is going to survive the winter. As goes HPI so goes sterling and, for that matter, the economy.

The World Bank stats are interesting in that they back up what Christopher is saying in relation to the "tripod" and the fact that we are heavily dependent on the banking sector which is mired in the subprime related market. According to the World Bank the UK is by far the most indebted nation on the planet in relation to bank liabilities.

Get ready, its going to be a hard winter ahead. Gordon seems to be keeping his head down recently wouldn't you say?

______________________

* Another "Intellect" said the same thing this past week: Al Greeenspan stated that the UK economy would suffer more pain than the US for much the same reasons as Christopher gives.

Yes he would choose NY over London if he HAD to choose one or the other - read his quote -- But my guess is he wont be touching either markets with a barge pole! ( despite the media hype about NY at the moment ! )

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