Robertson: 10 to 15 Years of Weak Economy
Tuesday, October 14, 2008 2:22 PM
By: Elaine Barr
A year after making a dour prediction for the U.S. economy, multi-millionaire investor Julian Robertson still sees a recession ahead for the United States and says the poor economy will last as long as 10 to 15 years.
"I don't mean to imply that this is going to last quite as long as what's been happening in Japan. But when they went into their decline in 1990, almost 20 years ago, their people were loaded with savings, but Americans are broke," the hedge fund manager told CNBC.
Robertson is credited with turning $8 million in start-up capital into more than $22 billion at the peak of the tech boom.
"If we leave out the home in the calculations, I'd say that 80 to 85 percent of Americans are broke. So they have to cut back on their spending," he said.
Last year, Robertson told CNBC that the economy was headed for a "doozy of a recession." He said then that the credit situation was worse than anyone had thought and that the normal economic indicators were not very strong.
He also said at that time that he thought Fed chairman Ben Bernanke was doing what he could to help the economy.
"I think, in a sense, he is trapped in the sins of his forefathers. I think he is doing exactly what he can do: ease, ease, ease; cut, cut, cut; print, print, print," Robertson said in that interview.
According to Hedge Fund Research, hedge funds' losses ballooned in September when the average portfolio fell 4.68 percent, making it the industry's worst month performance. The average hedge fund has now lost 9.41 percent this year.
In an Oct. 1 letter to clients, Jeffrey Gendell, who runs Greenwich, Connecticut-based Tontine Associates LLC, wrote, "We clearly underestimated several things, most importantly the tsunami of redemptions that are being delivered to hedge funds as investors line up to get out of these funds as well as record outflows from equity mutual funds."
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