I've been saying for sometime that the current administration has been downplaying the severity of the economic issues we're facing. Embedded within this post is an interview conducted by Steve Paikin of The Agenda, a Canadian public affairs television show, featuring Nouriel Roubini, a professor at NYU. In the interview, Roubini discusses the U.S. economic recession and is very candid about the economic outlook.
Roubini argues that the current recession will not be short and shallow, as some economists have claimed, but it will be the worst recession we've seen since the Great Depression. He goes on to talk about the financial sector and that we'll see the collapse of more financial institutions (e.g. Bear Stearns), and further price declines in the housing market. Unfortunately, Roubini's proclamations of the impending financial crisis to come have earned him the name of Dr. Doom among some of his peers.
The full interview is about 30 minutes long (broken into 3 separate videos), but I encourage you to have a look.
Part 1 of 3
Part 2 of 3
Part 3 of 3
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4 comments:
Dude, We found your long lost Brother, and a new nickname for you: Dr. Doom : )
Actually, coincidently Money Magaizines Letter from the editor, makes the following Statements:
"Evrey Market Cycle good or bad, eventually appoints a resident genius. You proabally remember Abby Joseph Cohen, Goldman Sachs' upbeat investment strategist, who alone seemed to remeber why stocks kept rising in the 1990's......In a confusing market, it seems, we need to believe someone has it all figured out.
In these anxious times, the man who seems to have figured it out first and best is NYU economist Nouriel Roubini.....As his forcasts came true one by one , he has turned into a bear market celebrity....He belives that home prices have another 20% to fall, that mortgage losses could hit 1 trillion, and the cycle wony end without huge goverment intervention. The words"Not since the great depressio" come up a lot in his converation. .....
Though remember this about market cycle geniuses: They always miss the next turn. Cohen remeained upbeat long after the 1990's party was over.
Its possible that Roubini is an exception. But lesson of History is pretty clear. The time to act on his forcast was 15 months ago, when he stood alone- not now when his once renegade outlook seems a lot less outlandish. Especially since Roubini himslef hasnt bought or sold a thing in response to his own forecast: He has all of his money in a diversified portfolio of index funds." Thats how I've invested for teh past 20 years and how i'll invest for the next 20," he says."I take a long term view".
- Eric Schurenberg
You know I am not as bearish as you due to my own intrests in seeing things turn around, but I guess looking at it from your point of view the worse it gets for us homeowners, the better it is for you. Like I said in my blog, it all depends on your prespective.
I think we both acted smart 15 months ago as refrenced in teh column by you selling and by getting fixed.
Edit:
By you selling your home and by me getting my mortgage fixed.
I have to disagree with the last comment. I don't think it matters what your perspective is and whether you have a vested interest in the market getting better or worse. Facts are facts and those that see things for what they are, are the ones that will benefit. The facts are that we are in a recession and the housing market will continue to crumble due to the number of foreclosures now and the number anticipated due to number of sub-prime mortgages. Doom and gloom in the forecast? Yes for now but as we have all learned eventually things get better. The question is, will you be smart and turn this into an opportunity or continue to make the same mistakes?
While I agree the lower prices go, the better it will be for buyers (like me) when we re-enter the market, it does not mean I want to see any homeowners hurt in this. It's not really a matter of perspective, it's a matter of reality. These things are going to happen whether I am there to purchase a home at the bottom or not.
The best that any of us can do is be prepared for what is to come. This is why I put my home on the market 16 months ago, and the reason why I encouraged you to do the same at that time. And that's the advice I've given since starting this blog.
Don't hate the messenger...
Hate the lenders that originated all of those subprime mortgages.
Hate the appraisers that said that $250,000 home was worth $500,000.
Hate the real estate agents that said buy now or be forever priced out of the market.
Redirect some of that frustration onto those who created this mess!
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