I Told You So - Original Oil Painting on Canvas by Moreau Paul Charles Chocarne
A collection of memorable quotes about the credit crisis of 2008, from timely warnings to the scary and downright silly. So we have no excuse to those who say “I told you so!”
Timely Warnings
Downright Scary
Ludicrous Quotes
“We have no plans to insert money into either of those two institutions.” US Treasury Secretary Henry Paulson referring to Fannie Mae and Freddie Mac on August 10, 2008, just over 1 month before the institutions were nationalised. Source: Bloomberg
“This is not a time to be panicking about this. These are viable, strong institutions… The economics are fine in these institutions and people need to know that… There’s no reason to talk about failure. These two institutions are fundamentally, fundamentally strong… There’s no reason for the kind of reaction we’re getting.” Senator Christopher Dodd, July 11, 2008. Source: Marketwatch
“In my judgment, we are closer to the end of the market turmoil than the beginning. Looking forward, I expect that financial markets will be driven less by the recent turmoil and more by broader economic conditions and, specifically, by the recovery of the housing sector.” US Treasury Secretary Henry Paulson, May 16, 2008. Source: US Treasury
“I believe Fannie and Freddie are better off than the market thinks. Over the long term the market is a very rational distributor of resources, but in the short term it can fall prey to hysteria. Sometimes you need to deal with that. Part of the problem is rumor mongering by short-sellers. Our hope is that just by making U.S. financial support available, we’ll quiet the fears and eliminate any need for that support.” Rep. Barney Frank, chairman of the House Financial Services Committee, April 25, 2008. Source: CNN
“We’ve got strong financial institutions . . . Our markets are the envy of the world. They’re resilient, they’re…innovative, they’re flexible. I think we move very quickly to address situations in this country, and, as I said, our financial institutions are strong.” US Treasury Secretary Henry Paulson in an interview with Wall Street Journal on Sunday, March 16, 2008
“It is not the responsibility of the Federal Reserve – nor would it be appropriate – to protect lenders and investors from the consequences of their financial decisions.” Ben Bernanke, August 31, 2007. Source: China Daily
“This is far and away the strongest global economy I’ve seen in my business lifetime.” US Treasury Secretary Henry Paulson, July 12, 2007. Source: Fortune
“The budget and financial results presented in this report demonstrate the remarkable strength of the US economy that translated into record-breaking revenues of $2.6 trillion flowing into the Treasury in 2007.” US Treasury Secretary Henry Paulson, 2007 Budget Report. Source: GAO
“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, March 28, 2007. Source: Newsmax
Timely Warnings
Asked if the U.S. economy was in recession, Greenspan said: “We are on the brink… A rebound at this stage is not something I think is in the immediate outlook… There are still very considerable structural problems remaining in the financial system. They will remain for a while. It’s going to be very difficult. There are a lot of unexpected adverse events out in front of us.” Alan Greenspan, June 24, 2008. Source: Reuters
“You can see there is a sharp slowing of growth, and it is quite possible that at some point we might get a quarter or two of negative growth, but recession is not the central projection.” Mervyn King, Governor of the Bank of England, 15 May 2008. Source: Daily Mail
“With the daily volume of transactions in the hundreds of trillions of dollars in notional value of over-the-counter derivatives, the Fed would have to inject funds at a much more massive scale to affect the market. Such massive injection would mean immediate and sharp inflation. Worse yet, it would cause a collapse of the dollar.” Henry C K Liu, August 24, 2007. Source: Asia Times
“US sub-prime is just the leading edge of a financial hurricane.” Bernard Connolly, AIG, August 20, 2007. Source: Telegraph
“We might hope to see the finances of the Union as clear and intelligible as a merchant’s books, so that every member of Congress and every man of any mind in the Union should be able to comprehend them, to investigate abuses, and consequently to control them.” President Thomas Jefferson to Treasury Secretary Albert Gallatin, 1802
Downright Scary
“Not since the beginning of the First World War has our banking system been so close to collapse.” Mervyn King, Governor of the Bank of England, October 22, 2008. Source: Times Online
“We are in the midst of a serious financial crisis… Our entire economy is in danger… The market is not functioning properly… There is a widespread loss of confidence. America could slip into a financial panic.” President George W. Bush in a prime time TV address, September 24, 2008. [Ed. Now that's how to inspire global confidence.] Source: CNN
“The mother of all credit contractions.” Former Treasury Secretary Nicholas Brady, former Controller of the Currency Eugene Ludwig, and Reagan-era Federal Reserve Chairman Paul Volcker, September 19, 2008. Source: MoneyNews
“The next cause for concern in the battered US economy is whether there will be buyers abroad for the nation’s billions in debt, New York Mayor Michael Bloomberg warned … In a speech at Georgetown University in Washington, the billionaire political leader said the tumult in financial markets is being felt worldwide and it’s unclear who will continue to buy US Treasury bills.” Michael Bloomberg, September 18, 2008. [Ed. No buyers of debt = no solvency!] Source: Asia Times
“The unsustainable has run its course and policymakers face the difficult task of damage control” Title of a Bank for International Settlements report dated 30 June, 2008. Source: BIS
