Commentary: The Weekend Interview - WSJ.com

Commentary: The Weekend Interview - WSJ.com: "Theodore J. Forstmann
The Credit Crisis Is Going to Get Worse
By BRIAN M. CARNEY
July 5, 2008; Page A9

New York

Twenty years ago, Ted Forstmann contributed a scathing – and prescient – op-ed to this newspaper warning that the junk-bond craze was about to end badly: 'Today's financial age has become a period of unbridled excess with accepted risk soaring out of proportion to possible reward,' he wrote in October 1988. 'Every week, with ever-increasing levels of irresponsibility, many billions of dollars in American assets are being saddled with debt that has virtually no chance of being repaid.'
[The Credit Crisis Is Going to Get Worse]
Ismael Roldan

Within a year, the junk-bond market had collapsed, and within 18 months Drexel Burnham Lambert, the leading firm of the junk-bond world, was bankrupt. Mr. Forstmann sees even worse trouble coming today.

For a curmudgeon, he is a cheerful man. When we met for lunch recently in a tony midtown restaurant, he was wearing a well-tailored suit, a blue shirt and a yellow tie. He spoke with the calm self-assurance of someone who has something to say but nothing left to prove.

'We are in a credit crisis the likes of which I've never seen in my lifetime,' Mr. Forstmann warns. He adds: 'The credit problems i"