Broker who predicted meltdown eyes Senate run

By Joseph A. Giannone

NEW YORK (Reuters) - A handful of investors made fortunes predicting the current financial crisis, but one Wall Streeter may try to parlay his prescient warnings into a political career.

Brokerage executive Peter Schiff, who as early as 2006 predicted the financial market meltdown and current recession, is considering a run for the U.S. Senate as a Republican, challenging incumbent Connecticut Democrat Christopher Dodd.

Schiff, 46, who heads Darien, Connecticut-based brokerage Euro Pacific Capital, said on Comedy Central's "The Daily Show" on Tuesday that he may run next fall. "I am considering running for Senate in my home state of Connecticut," he said.

He was not available for comment on Wednesday, but his brother Andrew told Reuters Schiff was traveling to Washington to meet with Senator John Cornyn, chairman of the National Republican Senatorial Committee.

The visit is the latest in a series of steps that show Schiff is seriously considering a jump from the fringes of Wall Street to Capitol Hill.

"We didn't announce last night and we're not announcing now," Andrew Schiff said. "But we're seeing how Peter fits in with the national Republicans and whether they would actively support a candidate of Peter's persuasion."

At least three other men have already announced their candidacies for Dodd's Senate seat: former three-term U.S. Representative Rob Simmons, former Ambassador to Ireland Tom Foley, and state Senator Sam Caligiuri.

Two weeks ago Peter Schiff told a blogger the odds of his running were "better than 50-50." In the meantime, supporters launched schiff2010.com to encourage his candidacy.

CASSANDRA

Schiff is credited with early and repeatedly predicting the collapse of the U.S. housing market, followed by a broader meltdown in financial markets and then recession. At the time, as video clips now testify, he was mocked and dismissed by news anchors and financial experts.

A frequent guest on financial news broadcasts, Schiff mixes dark humor with a steady stream of bold and gloomy economic predictions.

His firm, which manages more than $1 billion of client assets, steers its accounts to buy non-U.S. stocks and commodities, consistent with its view that the U.S. economy and the dollar are headed for a sharp decline.

At an investment conference last month, Schiff compared the United States to a massive Ponzi scheme, saying the U.S. Treasury must constantly issue new debt to refinance existing IOUs, tapping China and other overseas buyers for funds.

"I don't know why we have Bernie Madoff in jail," he quipped, alluding to the convicted mastermind behind the biggest Ponzi scheme ever. "We should appoint him secretary of the Treasury."

BEARISH