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Gabelli100 | May 20, 2021 |

How a 1982 Forecast Sparked a Global Bull Market

Today’s interest rates can be as low as 3%, but in the 1970s, Americans were paying 17% just to borrow money. In 1982, Henry Kaufman, then managing director of Salomon Brothers Inc., issued a memorandum predicting that interest rates would plummet, and bond prices would soar. What happened next was the biggest economic uptick since World War II. 

Nicknamed “Dr. Doom,” Kaufman was known for his critical views on fiscal policy and the American economy. However, his missive stunned Wall Street and on the very same day it published, the markets boomed, beginning nearly four decades of fiscal growth.

In a Gabelli School Centennial Virtual Speaker Series event sponsored by the Gabelli Center for Global Security Analysis, the CFA Society New York, and the Museum of American Finance, Kaufman, now president of Henry Kaufman & Company Inc., spoke about that fateful day and other milestones in his 60-year career. He was joined by his son, president of the Kaufman Family LLC Glenn Kaufman.

“The saying goes, ‘If you don’t remember your history, you’ll repeat it,’” Kaufman said. “We tend to have periodic wars with periodic financial crises with which we tend to have people in finance that become dubious and outlandish. So, it’s very important to study business and financial history so that you realize what happened in the past can easily happen in the future.”

 

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