USAGOLD's Top 25 Quotes on the Credit Crisis of 2007

By: Michael_J_Kosares

The financial market globally is up to its elbows in one of the strangest and most complicated credit crises in history. Events have come in rapid succession with mind-numbing effect. No sooner does the dust settle in one part of the market than it is kicked up in another. Through it all, the reactions on the part of the participants have been the stuff of a good financial thriller. We thought it would be interesting to catalog some of that reaction for you on one web page. So here they are - from the witty and profound to the scary and downright silly - our Top 25 Quotes on the Credit Crisis of '07.

1. In one way, I'm sympathetic to the institutional reluctance to face the music. I'd give a lot to mark my weight to 'model' rather than to 'market.' - Warren Buffett, Fortune, 8/16/07 (On the financial institution practice of valuing subprime assets on the basis of a computer model rather than the free market price.)

2. The Federal Reserve was not founded to bail out Bear Stearns or a few hedge funds. It was founded to keep a stable currency and maintain its value. - Jim Rogers, Rogers Commodity Fund

3. For the second time in seven years, the bursting of a major-asset bubble has inflicted great damage on world financial markets. In both cases--the equity bubble in 2000 and the credit bubble in 2007--central banks were asleep at the switch. The lack of monetary discipline has become a hallmark of unfettered globalization. Central banks have failed to provide a stable underpinning to world financial markets and to an increasingly asset-dependent global economy. - Stephen Roach, Morgan Stanley

4. There is a lot of pain still to be had in the equity markets, particularly aimed at the risky end of the spectrum. We think the fair value on the market is about a third lower in the U.S. . . - Jeremy Grantham, Grantham, Mayo and Van Otterloo

5. Suddenly, the world is realizing that gold is still a safe haven asset. We've seen pretty substantial losses in equity markets. I think this is genuine safe-haven buying. - James Moore, theBullionDesk

6. I think Greenspan would have cut rates already. So I do think things are beginning to look different at the Fed. - Paul Kasriel, Northern Trust

7. At this juncture, the impact on the broader economy and financial markets of the problems in the subprime market seems likely to be contained. - Fed chairman, Ben Bernanke, Congressional testimony, March, 2007

8. "If prices go down, we will have problems -- problems in the sense of spillover to other areas," Greenspan said. While he hasn't seen such spreading yet, "I expect to." - Former Fed chairman, Alan Greenspan, speech, March, 2007 as reported by Bloomberg.com

9. This is not a rescue. - Goldman Sachs Chief Financial Officer David Viniar after Goldman poured $3 billion into one of its hedge funds

10. This is a sort of preemptive rescue. - Eric Kuby, chief investment officer for the Goldman fund mentioned

We invite you to continue reading quotes 11 - 25, including a short commentary on parallels between the Banking Panic of 1907 and the credit crisis today.

By Michael J. Kosares
Michael J. Kosares , founder and president
USAGOLD - Centennial Precious Metals, Denver

Michael Kosares has over 30 years experience in the gold business, and is the author of The ABCs of Gold Investing: How to Protect and Build Your Wealth with Gold , and numerous magazine and internet articles and essays. He is frequently interviewed in the financial press and is well-known for his on-going commentary on the gold market and its economic, political and financial underpinnings.

Disclaimer: when considering any market analysis, bear in mind that past trends do not necessarily guarantee future performance.

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