Nouriel “Dr. Doom” Roubini on the economy

If you’ve never heard of him, please check on his track record before branding him an alarmist. He is no radical. In his bi-weekly column for Forbes he wrote yesterday:

When investors don’t trust even venerable institutions like Morgan Stanley and Goldman Sachs, you know that the financial crisis is as severe as ever. When a nuclear option of a monster $700 billion rescue plan is not even able to rally stock markets, you know this is a global crisis of confidence in the financial system.

The next step of this panic could be the mother of all bank runs, i.e. a run on the trillion dollar-plus of the cross-border short-term interbank liabilities of the U.S. banking and financial system, as foreign banks start to worry about the safety of their liquid exposures to U.S. financial institutions. A silent cross-border bank run has already started, as foreign banks are worried about the solvency of U.S. banks and are starting to reduce their exposure. And if this run accelerates–as it may now–a total meltdown of the U.S. financial system could occur.

Make of it what you will. He has been almost preternaturally right in predicting each phase of the calamity, but maybe he’s wrong this time. The IMF yesterday admitted we are seeing a “full-blown crisis” and Europe is now scrambling to brace for the shockwaves. Is Weimar around the corner?

Off to a class. If things melt down over the next few hours feel free to send me a text message.

The Discussion: 9 Comments

I heard that they’re making a new Die Hard movie about the Wall Street end-of-the-world financial crisis starring Bruce Willis as Sec. Paulson.

October 3, 2008 @ 9:46 am | Comment

I was hoping that you would post your CV along with a list of books you’ve read. Not for any real reason, really, but just to show everyone how smart you are. Could you do that?

I really thought that was Roland’s shark-jumping post, and I’m amazed I haven’t seen any posts about it.

October 3, 2008 @ 12:09 pm | Comment

It’s all a big big joke…

โ€œIโ€™m not brave enough to try to influence the Congress,โ€ he said.

Buffett: “If we could do the deal that is available to the United States government and have its staying power, and its borrowing costs, we would make significant money. I would love to have, if they buy the assets at market price, I would love to have 1% of the profit or loss that results from buying these assets from troubled financial institutions.”

“If they buy them at market, they will realize a significant profit over time . . . but the key is buying at market prices.”

“I would love to have 1% of the profit or loss” …

Beautiful large scaled masterpiece it is. I hope one day they make a movie about it. I seriously do. Never before have witness such a parody in our life time. And people are still sleeping… It just amazes me.

October 3, 2008 @ 12:44 pm | Comment

How to reach the next step (By Bao and many others): Bring people down to their knees (it’s just starting now, the worse is to come), Bring down the economy, Remove any kind of hope (so that you can later propose a “master” plan to bring back hope and happiness), make people angry (but not about you, be clever, direct the hate toward a simple symbol, but still a popular one).

What do you get ? The perfect setup for the next step. War. On a global scale.

DO you think that Russia’s move is just a coincidence ? It is a seed. A seed planted in our mind. Preparing peoples for what is to come. It is basic mind manipulation, on a very large scale.

October 3, 2008 @ 1:03 pm | Comment

Oh and by the way, as many of you suspected in the last years (people living in China), you ARE being monitored. MSN, Skype, etc. Welcome the beauty of the China Dystopia:

I am being very vocal about a lot of things recently, the reason being, I am out of this freak show soon. I’ve had enough of this big joke. You can expect me to post on this forum soon, but let’s say in a more “honest” tone.

October 3, 2008 @ 1:28 pm | Comment

I’m confused by this conversation.

October 3, 2008 @ 2:11 pm | Comment

I think Bao has kind of taken over… ๐Ÿ™‚

Meanwhile, everyone should have his eye on Europe. I have it on good authority the dam will burst next week as the until-now abstract crisis becomes a global hurricane that will affect each of us.

Have no idea what is meant by the shark-jumping reference above. Meanwhile, did everyone see that the Chinese gymnast He Kexin is indeed 16 years old?

October 3, 2008 @ 3:50 pm | Comment

Sorry about that, was not the intent (maybe a bit)… ๐Ÿ˜‰

October 3, 2008 @ 4:16 pm | Comment

I worked for the navy as a civilian for many years before switching. I left mostly because there no leadership in the Navy. I thought this was more about historical issues for the navy and the us military. the veterans of our last major war – vietnam are retired or retiring so the senior leadership is mostly post-vietnam era people with no real war experience and the navy mission in the post-cold war era is no longer clear. when you have a large soviet navy in the world it is clear you need to build ships and plans to fight with them. when that threat went away the mission was no longer clear.

after leaving the navy and moving to another agency i have seen the same lack of leadership. it is even more blatant that most of the people at the top are mostly self absorbed baby boomers whose major objective is their own personal gain and climbing the ladder. cronyism, abject self promotion are considered the way things are done. i suspect it is probaby worse in wall street and the financial world.

I think basically the current generation of leaders now running the US in the government and the private sector are mostly selfish and self absorbed baby boomers who are driven from advancing their own careers and their cronies. I have seen too many patterns of advancing people with no leadership skills into positions of responsibility.

I bet in the finance world there were people who said the derivative CDOs and the credit swaps are a bad idea, but they are the ones who were not promoted, the yes men, the liars, and those seeking only to climb whether they earned or not are running the banks just like they are running the navy.

I bet you there are a 1000 palins in wall street, who had lots of personality, willing to lie, and where popular who have been put in charge of things they really have no understanding of.

October 4, 2008 @ 6:01 am | Comment

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