Loading ...There was a time when markets moved not on the televised utterances of Federal Reserve officials or billionaire money managers, but on a small printed report with the unassuming title “Comments on Credit.” That was because it contained the latest insights from Henry Kaufman, Salomon Brothers’ chief economist and head of the firm’s nonpareil research efforts.
Some readers may not recognize the name of the man or the firm, since they were toddlers (or perhaps not yet born) in Salomon’s heyday of the 1970s and ’80s. During that time, Kaufman earned the sobriquet of Dr. Doom for his consistently downbeat—but consistently prescient—forecasts of inflation and interest rates rising to unprecedented levels well into the double digits. Anyone younger than 35 years old has lived only in a period of disinflation and generally falling interest rates.
So it was enlightening and enjoyable to catch up with Henry via telephone on the occasion of the publication of his latest book, Tectonic Shifts in Financial Markets: People, Policies, and Institutions. At my end, his voice sounded the same as it did when he addressed a New York City hotel ballroom packed with clients and media 3½ decades ago to outline his eagerly anticipated forecast for the coming year. But his weekly “Comments” carried as much clout as his annual predictions did during those days of soaring bond yields and extreme volatility.
He later parted company with Salomon over disagreements about the risky tack the firm had taken and formed his own consultancy. Solly would later be hit by the infamous Treasury auction scandal, after which it was folded into various firms that were melded by Sandy Weill into what ultimately became Citigroup (ticker: C). Read more