Bailout: No cure for recession - New England Patriots Forums

PatriotsReign · 09-24-2008, 10:53 AM

Nouriel Roubini is the MAN right now on the world economic stage. He has accurately forecasted almost every step of our decline as far back as 5 years ago. He was shunned for much of that time as doomsdayer. Now companies from all over the world are flocking to him for his advice.

here's what he has to say about the pending bailout;

"NEW YORK (CNNMoney.com) -- Even if the Bush administration's $700 billion bailout works, the United States still faces the longest and most severe economic stretch since the Great Depression, according to one economist.

"The recession train has already left the station," said Nouriel Roubini, professor of economics at NYU's Stern School of Business during a conference call Wednesday. "What this plan can avoid is a Japan-like, L-shaped recession," where the economy sinks and stays sunk, "that could last a decade or more."

He said a well-implemented plan could limit the heavy bleeding to 18-months.

Job losses have increased and the unemployment rate hit 6.1% in August, up from 5.7% in July, the highest in five years. Roubini is forecasting it to top out at over 8%, at least.

Roubini predicted that practically all lending will see increased rates of defaults in the coming months from auto loans to credit cards to commercial real estate loans to municipal bonds.

"We don't just have a subprime mortgage lending system," Roubini said, "we have a subprime financial system"

Expert: Bailout no cure for recession - Sep. 24, 2008

***weswelker#83*** · 09-24-2008, 11:38 AM

No worries. We're not even in a recession.

/“The price of greatness is responsibility.”

ljuneau · 09-24-2008, 11:41 AM

I'd also like to recognize Peter Schiff. Likewise he recognized the economic problems several years ago. When he appeared on the Saturday morning Fox business shows, he was laughed at, scoffed and called a doomsayer.

Quote:

Just three days ago, after looking at the prospect of bailing a string of distressed financial institution in the country, the government seemingly drew a line in the sand, and refused to bail out Lehman Brothers. The authorities clearly saw Lehman's demise as a trial balloon to see how the markets would react if the government stayed on the sidelines. That trial balloon quickly turned into the Hindenburg. Immediately reversing course, the Government has decided to go "all in" and bail out every institution with financial exposure to U.S. mortgages. Simply put, Americans will not be allowed to visibly suffer losses after the greatest asset bubble in U.S. history. But make no mistake, the losses are real and Americans will pay one way or another.

Moving beyond the guided munitions of selective bailouts, the Government is now trying the financial equivalent of carpet bombing (for AIG, Merrill Lynch, and especially Lehman Brothers, this gives new meaning to being a day late and a dollar short). To continue with the military analogies, Paulson's bazooka turned out to be a nuclear tipped ballistic missile.

By committing trillions of tax payer dollars (not the "hundreds of billions" that Paulson predicts), the plan will save commercial and investment banks from certain bankruptcy. In his statement today, Paulson made clear that Congress must pass new legislation to allow the Government to acquire even those loans too poorly collateralized to currently qualify for GSE or FHA absorption. The losses baked into these mortgage products, which Wall Street has been reluctant to even estimate, will now be borne wholly by taxpayers.

Here is more of his latest article...

PatriotsReign · 09-24-2008, 02:10 PM

Quote:

Originally Posted by ljuneau

I'd also like to recognize Peter Schiff. Likewise he recognized the economic problems several years ago. When he appeared on the Saturday morning Fox business shows, he was laughed at, scoffed and called a doomsayer.

Here is more of his latest article...

I've seen him on CNN...he is good. Isn't he the guy who was economic advisor to Ron Paul? One thing he said which I don't agree with is the home prices will be kept artificially high;

"He also claims that the plan will safeguard home equity by keeping real estate prices high. Since when did high home prices become a strategic national priority? If the plan succeeds, the gains for home sellers will simply be matched by losses for homebuyers, who end up paying inflated prices, and taxpayers, who get stuck with the losses when those buyers default."

I think home prices will still come down as lending standards become tougher, there will be fewer available buyers in the market. The bottom line is that home prices will continue to decline until demand meets supply and that will only happen when homes are affordable enough for the population in a given area. This rule applies to all regions of the country.

***reflexblue*** · 09-24-2008, 02:16 PM

Quote:

Originally Posted by PatriotsReign

Nouriel Roubini is the MAN right now on the world economic stage. He has accurately forecasted almost every step of our decline as far back as 5 years ago. He was shunned for much of that time as doomsdayer. Now companies from all over the world are flocking to him for his advice.

here's what he has to say about the pending bailout;

"NEW YORK (CNNMoney.com) -- Even if the Bush administration's $700 billion bailout works, the United States still faces the longest and most severe economic stretch since the Great Depression, according to one economist.

"The recession train has already left the station," said Nouriel Roubini, professor of economics at NYU's Stern School of Business during a conference call Wednesday. "What this plan can avoid is a Japan-like, L-shaped recession," where the economy sinks and stays sunk, "that could last a decade or more."

He said a well-implemented plan could limit the heavy bleeding to 18-months.

Job losses have increased and the unemployment rate hit 6.1% in August, up from 5.7% in July, the highest in five years. Roubini is forecasting it to top out at over 8%, at least.

Roubini predicted that practically all lending will see increased rates of defaults in the coming months from auto loans to credit cards to commercial real estate loans to municipal bonds.

"We don't just have a subprime mortgage lending system," Roubini said, "we have a subprime financial system"

Expert: Bailout no cure for recession - Sep. 24, 2008

What we've both been speculating for a while(years) might just happen. Not good news,not good news at all.