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November 17, 2011 at 09:50 AM
A Forbes blog post with a screaming headline pegged to Mark Mobius about a “hellish” financial crisis shortly forthcoming has been generating plenty of fear in the Internet sphere. The article by Addison Wiggin was picked up by the well-read Drudge Report, ensuring lots of reader attention, and has quickly gained the interest of blogs making frequent reference to the word “Armageddon.”
The article, which is very thinly sourced, quotes Franklin-Templeton emerging markets guru Mark Mobius saying “There is definitely going to be another financial crisis around the corner because we haven’t solved any of the things that caused the previous crisis.” Mobius is reported to have linked said future crisis to the derivatives market.
The article, citing comments Mobius made in Tokyo, said, “Estimates on the amount of derivatives out there worldwide vary. An oft-heard estimate is $600 trillion. That squares with Mobius’ guess of 10 times the world’s annual GDP.” Mobius also warned the derivatives are unregulated, and growing in volume.
Wiggin’s article raises a number of interesting questions, such as what is Mobius, who runs some $50 billion in investor assets, doing to prepare for this crisis and what exactly is the danger he foresees. But a search for Tokyo-based coverage of Mobius’ warning yielded nothing. And the reason for that is that Mobius made those remarks half a year ago. A Franklin-Templeton spokeswoman told AdvisorOne he made the comment in May.
That does not mean there won’t be a fresh financial crisis or that Mobius isn’t worried about derivatives, but the point of the article may have more to do with selling Wiggin’s Agora Financial newsletter products than offering well-sourced news content.
