Merrill Lynch Chief Executive John Thain has said he does not expect the global economy to recover quickly from the credit crisis and that the environment more closely resembled 1929, the advent of the Great Depression, according to Reuters and several other news reports.
"We are going to be in a very difficult economic environment for a significant period of time," Thain said during the company's annual financial-services conference.
"Right now, the U.S. economy is contracting very rapidly. We are looking at a period of global slowdown," he told investors. "This is not like 1987 or 1998 or 2001. The contraction going on is bigger than that. We will in fact look back to the 1929 period to see the kind of slowdown we're seeing now."
He also dismissed the idea that national or regional stock markets could perform differently across the globe. "There is no such thing as decoupling," he said, referring to the popular theory that emerging markets could sustain reasonable growth even while the world's leading economies suffered recessions. "All equity markets are linked. Each individual economy will be more or less affected, depending on reliance on global trade and commerce."
However, he was more upbeat about the industry. "I'm cautiously optimistic that things are starting to get better in financial services," Thain said. And in terms of the company he leads into a merger with Bank of America, "We're in a good space to weather this economic storm," he said. The deal should give Merrill Lynch's 16,700 financial advisors access to BofA's "huge pool of wealthy individuals", he said.