Sunday, May 31, 2009

Bert Dohmen

I met Bert Dohmen at a conference in 2008, and picked up his book, Prelude to Meltdown.

He wrote about a lot of potential problems in the economy -before- the financial problems started in 2007.
Here's an excerpt from his website :

'At the beginning of 2007, Bert started warning about a financial crisis, which could turn into the worst since the early 1930's. But almost everyone scoffed at the idea. In April 2007, the headline of his prestigious Bert Dohmen's WELLINGTON LETTER was: "THE PERFECT FINANCIAL STORM."

While everyone on Wall Street talked about the huge amount of "liquidity," Bert pointed out that genuine liquidity is cash, and that Wall Street confused liquidity with "credit" which could disappear overnight. And that's exactly what has happened.

The world financial system is leveraged beyond comprehension. It's estimated that $500-700 TRILLION of derivatives are outstanding. Compare this with total economic activity (GDP) of the world, which is around $50 Trillion, and you can see that even a 5% drop in value of the derivatives is beyond the rescue capability of the world's central banks.'


From what I understand, he was an early adopter of technical indicators. His analysis seemed spot on, so, I've subscribed to his newsletter, and recommend it to others.




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