Risk of a near-depression shouldn’t be underestimated

[redrumloa]

http://www.bloomberg.com/apps/news?pid= ... A9lCHrtAqk

At the World Economic Forum two years ago, Nouriel Roubini warned that record profits and bonuses were obscuring a “hard landing” to come. “I really disagree,” countered Jacob Frenkel, the American International Group Inc. vice chairman and former Israeli central banker.

No more. “Roubini was intellectually courageous, and he called the shots correctly,” says Frenkel, whose AIG survives only on the basis of more than $100 billion of government loans. “He gained credibility, and he deserves it.”

This week, New York University’s Roubini returned to the WEF and the Swiss ski resort of Davos as the prophet of the worst economic and financial crisis since the Great Depression - - joining the ranks of previous “Dr. Dooms” who made their names through contrarian calls that proved correct.

Even as he wins plaudits for his prescience, Roubini, 50, says worse lies ahead. Banks face bigger credit losses than they realize, more financial companies will require state takeovers and the world economy will keep shrinking throughout 2009, he says.

“The consensus is catching up with me, but it’s still behind,” Roubini said in an interview in Davos. “I don’t know what some people are smoking.”

 

[FluffyMcDeath]

What do you mean "near-depression"?
According to shadowstats.com, if unemployment were still measured the way it was B.C. (before Clinton) the rate is 17%. That's closing in on Depression rates - and the Depression took three years to reach bottom from the stock market crash. We are just over a year past our initiating shock of Aug 2007. Have you checked out the fdic failed bank list? We're off to a flying start

 

[ScapeGoat]

Some fuckers got all the money !!

 

[smithy]

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=a6A9lCHrtAqk

At the World Economic Forum two years ago, Nouriel Roubini warned that record profits and bonuses were obscuring a “hard landing” to come. “I really disagree,” countered Jacob Frenkel, the American International Group Inc. vice chairman and former Israeli central banker.

No more. “Roubini was intellectually courageous, and he called the shots correctly,” says Frenkel, whose AIG survives only on the basis of more than $100 billion of government loans. “He gained credibility, and he deserves it.”

This week, New York University’s Roubini returned to the WEF and the Swiss ski resort of Davos as the prophet of the worst economic and financial crisis since the Great Depression - - joining the ranks of previous “Dr. Dooms” who made their names through contrarian calls that proved correct.

Even as he wins plaudits for his prescience, Roubini, 50, says worse lies ahead. Banks face bigger credit losses than they realize, more financial companies will require state takeovers and the world economy will keep shrinking throughout 2009, he says.

“The consensus is catching up with me, but it’s still behind,” Roubini said in an interview in Davos. “I don’t know what some people are smoking.”

Well done Roubini, but during good times there are always doom-mongerers. They know at some point they will be right, they just need to be vague enough to take credit for guessing right - it's a long way from being a prophet.

It doesn't seem much cleverer than if I stood with a plackard during July, yelling the winter will come, but missing out any specifics.

 

[FluffyMcDeath]

Well done Roubini, but during good times there are always doom-mongerers. They know at some point they will be right, they just need to be vague enough to take credit for guessing right - it's a long way from being a prophet.

It doesn't seem much cleverer than if I stood with a plackard during July, yelling the winter will come, but missing out any specifics.

If you claim, in July, that winter is coming then you are right. All those that say that "winter" was something that only happened in the odlen days, and that we have new tools now for preventing winter, and we are in a new paradigm, we have reached perpetual summer, etc... all those people are morons.

But Roubini isn't the only one who say it coming. Many of us have and have tried to do what we can to shore up our circumstances. Lean times are a given in life, there is harvest time, and then there is the rest of the year when you live off of your savings. It was quite obvious that there were structural problems that were being allowed to build. These are things that anyone paying attention could also have seen - but it seems most people didn't pay attention or simply don't have a clue or believe their own hype. We have people running the economy who believe in absurd economic ideas like if something becomes rare enough then the simple rising price of it will result in the demand magically being met - like if you're in an airtight room then as the air runs out eventually it will be so valuable that someone will step in to supply more air by some as yet unforeseen technology!!!!

But winter has a well known timing. The guy who yells "Winter is coming" should be able to say when. On the other hand, other things are chaotic. As you watch a child pile up blocks you know that he won't be able to build very high, no matter how confident he may seem. The higher it gets, the wobblier it gets and you know it's going down, just not exactly when but you get a good feeling about if it's close or not.

When the mountain rumbles, it doesn't mean it's going to erupt, but it means that it's not all fine and dandy and it wouldn't be a bad idea to start planning an escape route.

 

[FluffyMcDeath]

Also, we all gonna starve

 

[smithy]

Well done Roubini, but during good times there are always doom-mongerers. They know at some point they will be right, they just need to be vague enough to take credit for guessing right - it's a long way from being a prophet.

It doesn't seem much cleverer than if I stood with a plackard during July, yelling the winter will come, but missing out any specifics.

If you claim, in July, that winter is coming then you are right. All those that say that "winter" was something that only happened in the odlen days, and that we have new tools now for preventing winter, and we are in a new paradigm, we have reached perpetual summer, etc... all those people are morons.

Yes.. very true. Our very own Gordon Brown is one example. He based his entire economic policy for 10 years on this theory that the economic cycle was replaced with steady growth. This is why the UK is such poorly prepared for this recession.

 

[FluffyMcDeath]

Yes.. very true. Our very own Gordon Brown is one example. He based his entire economic policy for 10 years on this theory that the economic cycle was replaced with steady growth. This is why the UK is such poorly prepared for this recession.

The US did the same. A lot of places did. And people prefer to believe comforting lies than disconcerting truth ergo they would rather not contradict "the experts". Far more than half the people seem to have shirked their responsibilities to themselves to learn how things work and what's going on and have been happy to trust experts, politicians (ha ha - right!!) or the telly rather than do a modicum of thinking. I'm not sure they still teach "thinking" in schools these days. Pity - coz it comes in handy sometimes.