...a rising probability of a 'catastrophic' financial and economic outcome. (1 Viewer)

crosswatt

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http://news.yahoo.com/s/ft/20080219/bs_ft/fto021920081334359078;_ylt=AozoX8V3CwKFRV6c_RfR1f0E1vAI
Recently, Professor Roubini's scenarios have been dire enough to make the flesh creep. But his thinking deserves to be taken seriously. He first predicted a US recession in July 2006*. At that time, his view was extremely controversial. It is so no longer. Now he states that there is "a rising probability of a 'catastrophic' financial and economic outcome"**. The characteristics of this scenario are, he argues: "A vicious circle where a deep recession makes the financial losses more severe and where, in turn, large and growing financial losses and a financial meltdown make the recession even more severe."
Prof Roubini is even fonder of lists than I am. Here are his 12 - yes, 12 - steps to financial disaster.


:covri:
 

Jonesy77

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Sounds like I'd be stupid to pay of my $40,000 of credit card debt before the crunch comes and possibly bankrupts all these companies.
 

blackadder

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Perma-Bears love recessions!

Whose a perma bear?

If we can get a credit line increase we can go back to busniness as usual.

As a society, we are just bumping up against our credit limit, which is slowing consumption, which accounts for 75% of economic activity...
 
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TDH

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The US financial system is increasingly looking like a house of cards.
 

The Mongoose

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yawn. While he's selling, I'll be buying cheap.

The economy always comes back.
 

jpcdolphan

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Whose a perma bear?

If we can get a credit line increase we can go back to busniness as usual.

As a society, we are just bumping up against our credit limit, which is slowing consumption, which accounts for 75% of economuic activity...

It was more of a reference to the professor in the linked article (who is credited with "calling" a looming recession, which isn't a big stretch since markets will always be cyclical). Perma-Bears are usually at their most vocal during the one year per decade when they are right.

I actually agree with the need to restrict our spending and not always pawning our debt into the future...sooner or later the check needs to be paid. I also have big misgivings with what I see as a Fed bailout of Wall Street. My only hope is that the Fed sees a tanking economy as a greater threat so they are addressing that now and will worry about crossing the inflation bridge when they get to it. We'll see.

At heart, I tend to trend towards optimism so I have hope that, as bleak as the long term picture may seem, that the country can get their fiscal house relatively in order. At some point, either now or in the next cycle, that will probably require a tough recession to destroy the inflationary threat. I accept that in the hopes that our long term outlook is helped by that. Until the past 15 years or so, our recessions tended to be fairly deep. The following booms made up for it.

Markets are cyclical. There are always downs as well as ups. Every era has it's "threat to destroy our economy". We've always managed to deal with it before.

Personally speaking, I'll take the 2008 credit crunch over late 70's stagflation.
 
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threexcharm

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All these financial forcasts are getting to be a little scary.

Joe
 

BigRonJon

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Scary, especially since our nation's defense and military is directly infuenced by our wealth. If our economy crumbles, so will our military. Hopefully our grandchildren wont be all wearing towels on their heads.
 

triumph

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Scary, especially since our nation's defense and military is directly infuenced by our wealth. If our economy crumbles, so will our military. Hopefully our grandchildren wont be all wearing towels on their heads.

When did our country become so fragile and susceptible that this thought would ever enter your head? Arabs couldnt take and hold Denham Springs for crying out loud. Talk about an insurgency.

But to keep you up at night, here you go:
 

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blackadder

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It was more of a reference to the professor in the linked article (who is credited with "calling" a looming recession, which isn't a big stretch since markets will always be cyclical). Perma-Bears are usually at their most vocal during the one year per decade when they are right.

I actually agree with the need to restrict our spending and not always pawning our debt into the future...sooner or later the check needs to be paid. I also have big misgivings with what I see as a Fed bailout of Wall Street. My only hope is that the Fed sees a tanking economy as a greater threat so they are addressing that now and will worry about crossing the inflation bridge when they get to it. We'll see.

At heart, I tend to trend towards optimism so I have hope that, as bleak as the long term picture may seem, that the country can get their fiscal house relatively in order. At some point, either now or in the next cycle, that will probably require a tough recession to destroy the inflationary threat. I accept that in the hopes that our long term outlook is helped by that. Until the past 15 years or so, our recessions tended to be fairly deep. The following booms made up for it.

Markets are cyclical. There are always downs as well as ups. Every era has it's "threat to destroy our economy". We've always managed to deal with it before.

Personally speaking, I'll take the 2008 credit crunch over late 70's stagflation.

I mostly agree.

But we've reached a point now where we refuse to take our medicine at all. There's a Fed or government bailout organized at the first whiff of less than 2-3% growth. Markets are cyclical and every recession sews the seeds of its own recovery.

The policy actions in aggregate over the decades, fueling debt and bubbles in order to paper over weak spots, are threatening worse outcomes down the road than simply letting the markets take their course.

We are now kind of hostage to all the past excesses because the credit markets are in such bad shape there is no choice but organize another "stimulus" lest lending seize up entirely.
 

efil4stnias

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Fed will lower rates again in March.

Nice, so that will deflate the value of the dollar, AGAIN, and we will watch as oil trades at $110 pbl.

meanwhile, back in the states....

Im walking across the causeway everyday to get to work where i am paid in dollars that increasingly dont mean much. hooraay beer. ( thats if i can afford it )
 

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