Market Preacher
Losing Religion?
Josef Ackermann, the normally bullish 60-year-old head of Deutsche Bank, is sounding glum these days. After a recent trip in New York that included a chat with former Federal Reserve chief Alan Greenspan, Mr. Ackermann concluded that the situation in the markets amounted to a "meltdown" where "confidence seems to have vanished."
"I have just spent a week in New York. And therefore I may have been particularly influenced by the developments" there, Mr. Ackermann told a gathering at the Swiss consulate in Frankfurt Monday evening. "I no longer believe in the self-correcting nature of markets. It pains me to say something like this, as I am one of the biggest proponents of a market economy."
Mr. Ackermann later clarified his remarks to say he was referring to the U.S. mortgage market and the inability of market participants to revive it. Instead he called for help to "stabilize the subprime- mortgage market with state help."
To restore confidence in the markets, Mr. Ackermann said two things were needed: "Firstly a concerted action of governments, central banks and market participants to get together to do everything to stop this meltdown. It also needs a bit of courage to invest in the future. Many products are at historically attractive valuation levels."
WSJ Deal Journal March 19, 2008