Word: weiss
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Dates: during 2000-2009
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...that fear is everywhere, how does Weiss feel? In some ways, more fearful than ever. Speaking over the phone from his office as markets plunge around the world, Weiss, 61, says: "The possibility of a total financial collapse is higher than at any time I've ever seen. We just don't know how bad things could...
...Weiss has been much on my mind lately. I invested in his fund in 2004 - and as I watch the daily drubbing of everything else I own, I'm painfully reminded that I should have heeded his warnings about the turmoil that lay ahead. While most of us were lulled by the financial stability and heady growth that preceded the recent meltdown, Weiss, who is also professor emeritus of economics at Boston University, was a prescient doomsayer. In 2005, when everyone else was bullish, he wrote to his shareholders that global markets looked "very treacherous" and warned about rampant borrowing...
...bankruptcy. According to data provided by Bloomberg using a model devised by JP Morgan, the price of this insurance currently implies that the odds of banking giant Morgan Stanley defaulting in the next five years are 45%. For Citigroup, another financial linchpin, they're 21%. "This is astonishing," says Weiss. "If Citigroup fails, it could be disastrous...
...Weiss believes these banks are far less likely to run aground than the panic-induced price of credit-default swaps would suggest. But since the demise of Bear Stearns and Lehman Brothers, "people have no idea how sound banks are," he says, so "the whole financial system is locking up." The U.S. government's rescue plan should help, and Weiss thinks there's a fair chance that the busted assets it's buying to prop up the system will rise sharply in value as everything stabilizes. But he's by no means confident that the $700 billion bet will...
...Given this extreme uncertainty, Weiss is sitting on more cash than ever before. One reason is that he expects further mayhem as leveraged hedge funds are hit increasingly hard by margin calls and shareholder redemptions, forcing them to sell investments to raise cash. Yet amid the panic, Weiss admits he's turning bullish: "People are freaking out, and it's a good time to make money when everybody is freaking out." One shell-shocked area where he's finding extraordinary bargains: illiquid funds with troubled investments in property. "You might very well lose all your money," says Weiss, "but there...