Bank Investment Consultant
Who isn’t happy to see the back of 2008? It started out badly on the back of the subprime crisis that began in the fall of 2007 and managed to get spectacularly worse when catastrophic third-quarter 2008 financial results poured in, sending many of the biggest financial services firms straight down the crapper.
I remember the shock and disbelief when on a Friday evening the bartender at my local watering hole told me Wachovia had collapsed. Wachovia? Surely he meant Washington Mutual, said a Wall Street trader I was talking to at a party on Saturday. But the bartender had been right: One moment Wachovia was the white knight ready to snatch WaMu from the jaws of death, and the next, the nation’s No. 3 bank itself had fallen afoul of an asset class that in hindsight seems ludicrously risky. Who would be reckless enough to bet billions of dollars on mortgages lent to people who can’t pay them? Every big name in financial services, apparently, and investors are as mad as all hell about it.
The question is, where do we go from here?
Without wishing to be too gloomy, the next year is going to be tough for advisors. Ken Kehrer, director of consulting firm Kehrer-LIMRA in Princeton, N.J., sums it up: