How to predict a financial crisis and the five signs of a bear, with Nouriel Roubini, RGE Monitor and Nassim Taleb, The Black Swan author.

via CNBC

Some pretty awful questions by everyone except Bill Griffeth . . .


UPDATE: February 10, 200 5:51am

Talking Point Memo notes:

“In this clip, Nouriel Roubini and Nassim Taleb are still being treated as a circus sideshow by CNBC… They’re predicting the end of finance, and offering the only clear path out of this mess that I’ve seen offered (with the knowledge to back it up), and CNBC keeps asking them for stock tips. It’s ludicrous. Wall Street media — CNBC at least — doesn’t realize how bad this is yet. They’re stuck in a bubble where they think everything will go back to normal in a few months….”

He hits it spot on. These two guys are talking about a deep structural crisis in the world economy. And these CNBC yahoos can’t stop asking for stock tips. Really surreal.

I’m watching it again now. This is a seminal piece of video. You have to see it. I’m not sure I’ve seen anything that captures — albeit unintentionally — the vast disconnect over what is happening today in the US economy.

Category: Economy, Video

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

11 Responses to “Predicting Crisis: Dr. Doom & the Black Swan”

  1. Scott F says:

    Wow, is that Michelle Casruso Cabrera totally clueless.

    I guess if she keeps calling bottoms, she will right eventually . . .

  2. strat575 says:

    Most of that studio should be embarrassed with their behavior. That type of action would be degrading to children if I called it childish.

    I’d love to see a petition to boycott CNBC.

    A new grassroots finance policy platform: Nationalization/boycott of CNBC/withdrawal from passive investment in retirement funds.

  3. Senor Tropicana says:

    How does Dennis Kneale have a job? I know you’ve posed this question before, but everything out of his mouth is rubbish. He is basically spitting in the face of two of the guys who got it right. The amount of arrogance emanating from Kneale is preposterous. He backs up his arguments with nothing but shallow rhetoric and talking over people. It is repulsive to watch and incredibly terrible journalism (if you can even call it that). It seems as if he (Kneale) has a position, but never has any information to back it up but na uh na uh…..

  4. leftback says:

    Dennis Kneale’s only position is bending over with Kudlow pulling the puppet strings…

    Uncompromising stuff from Roubini and Taleb. I am shocked that the baiting of the bears continues. Taleb makes a point I have raised a few times. The only people who called this ahead of time are still on the OUTSIDE looking in. These guys, Stiglitz and the many bloggers who saw this coming. Meanwhile the tyranny of the incompetent continues. Geithner, Summers, Mary Schapiro. Come on, Barack, you are smarter than this.

    Keep hammering away Barry, and eventually someone will listen to reason. Won’t they..??

  5. the economic fractalist says:

    Who predicted the current nonlinearity of asset devaluation and the exact 11 October 2007 intraday Wilshire saturation nominal high? Is asset valuation saturation macroecomonics truly a new exact and predictive science and does this probable science have practical application for the future? And yes, Mr. Taleb is correct …. a departure from past practice and past banking leadership is necessary if true growth and true investment vice petty speculation is to occur…….

    The Pathway home for the Great United States……..

    A Citizen’s National Bank: A Modest Proposal from the Economic Fractalist

    The Economic Fractalist deserves a full post of his comments regarding a national bank. I would add one cost saving device: Use local Social Security offices as branch offices. With a little retro-fitting and expansion, they would do nicely, giving us a real sense of security. And…they are everywhere. Furthermore, being local they would understand local needs and risks.

    A Modest Proposal

    The People’s Bank of The United States
    (And Debt Negation For The Little People)

    There is ardent attempt to recreate the old model of Western consumer spending and reliving the dream.

    Instead of creating ‘new bad banks’ to service toxic assets; instead of bailing out or carving up bad old banks that are currently insolvent on a composite basis; instead of doing the worse of all and assuming all the low brow idiots’ liabilities and nationalizing bad banks, perhaps… perhaps… the creation of a ‘new national good bank’ represents a better pathway.

    The Federal Reserve has often demonstrated that banking is only a manipulation of electronic ones and zeros (backed by political and social stability and weapons and reasonably reliable delivery systems).

    The creation of a new United States ‘People’s Bank’ is proposed. This American Taxpayer’s Bank can borrow directly from the US Treasury at extremely low rates bypassing the Federal Reserve. Who wouldn’t agree that after the past seven and a half decades a little competition for the old Fed may be in order. Better still, no borrowing from the Treasury is necessary – just use the couple of trillion dollars of virtual money in the Social Security Trust Fund that is backed by the full faith and best intentions of present and future taxing federal politicians. Leveraging those virtual dollars in an exponential fractional manner could double or qradruple dectuple the amount available for lending. Think of it: 4 or 80 trillion to lend at low enough rates rates that would make the Japanese government unnerved. Perhaps a concept of ‘sufficiently negative’ rates could be engineered to ‘significantly enhance’ borrowing. Lending could target new mortgage applications and new entrepreneurial industries that are defined as beneficial to the country. Even new American furniture factories, clothing textile plants, new automobile companies, private energy and energy grid companies, clean water companies, nuclear power plants, et. et. et. al. – could receive expedited loans.

    A plethora of newly unemployed lower level banking managers and loan officers from collapsing financial institutions could be hired at nominal rates to manage the transactions and assure reasonable credit worthiness. Likely, toxic banks and financials load stoned with their untenable balance sheets and blighted past performances, would fortunately not score out as a good enough credit risk to borrow from the new People’s Bank.

    Ultimately the US Social Security Trust fund would be backed both by hard collateral assets and by its doubly benefited taxpayers both receiving loans and paying interest on those new mortgage, new business and new industry creation loans. This would of course be in addition to the high interest rates that the Treasury is already currently paying for the use of this virtual money; double interest earnings for the US Taxpayer – that’s a real deal by any standards.

    And if the private banks and financial industries go under because of their inescapable toxic debt and inability to see the inevitable qualitative results of bad risk taking, and if banking and financial stock owners lose all their equity valuation, and if the well bonused CEO’s ultimately lose their jobs and their wealth…and by popular demand.. go to jail…. ces’t la vie.

    Mortgage debtors and squatters not yet evicted from their homes should be entitled to win the mini lotto by outlasting the survival of toxic banks … and all outstanding debt on mortgages ‘owned’ by insolvent banks .. also by popular demand… canceled out. After all if the lending banks and financial institutions went under, they didn’t really have the money as a real asset in their locked-box vaults to lend in the first place – an illegal banking practice if there ever was one.

    This debt negation plan would overnight eliminate a huge chunk of outstanding toxic debt where valuations of assets are much lower than the debt owed by home owners. These entrapped new serfs and indentured servants of the real estate and banking industry now owing much than the value of their homes will ever be worth in their near life times, would be unencumbered and unbound from their unreasonable, illegal. and unethical contracts.

    This freedom from the banking yoke would quickly readjust the asset valuation-debt equilibrium and perhaps prevent social and political instability. Houses were really never close to being worth the goosed-up prices that the bad banks and the mindless real estate hawkers leveraged and perpetrated on American citizens relative to the ongoing mortgage holders’ wages.

    Debt negation would immediately help to increase asset valuations, reverse the deflationary spiral, get people spending again, and jump start the economy faster than any of the available logically inconsistent plans. Even inflation would make a come back making equity speculators, gold hoarders, oil barons, and Prius owners happy as clams.

    The People’s Bank of The United States – it has a ring to it.

    In this milieu of hair brained and undo able ideas; The People Bank deserves consideration; don’t count it out.

    And… the little people .. may … for once in their lives … have a chance to best the deals the bankers have been getting since 1913.

  6. ronin says:

    LOL! Start bashing the establishment, asking for resignations and asking for REAL CHANGE and get attacked by the media guard dogs!

    I hope the next movie Michael Moore makes is called, “Bowling for CNBC.”

  7. bubba says:

    I’m sorry for wishing this but those fucking imbeciles should be out of a job before this is all over. CNBC is to business news what FOX is to political news.

  8. barrister999 says:

    Michelle and Kneale were awful. But what do you expect, both, along with the rest of CNBC ‘pimp’ for Wall Street. Their reporters, with some exceptions, have no journalistic standards, they are not objective and many apparently believe journalism is a ‘sport’ rather than a profession. How can they be objective, their ultimate boss is GE.

  9. ben22 says:

    What a joke. Michelle Caruso Cabrerra will look as foolish a year from today as she did when her and Art Laffer tried to gang up on Peter Schiff during the famous bet debate.

    She acts so arrogant about taleb and roubini and she has been the one over and over again that was wrong.

    I’m not even going to comment on that asshat Dennis Kneale. Mr, “whats that one data point” does anyone in a position to give advice use 1 data point for any decision, you’ve got to be kidding me, then he yells, “give me 3″ Asshole. All pathetic, that whole CNBC panel trying to push them into investment advice, the constant interruptions. Oh well, I should have expected this.

  10. adavydov says:

    Jesus Christ, how the hell does she extrapolate a market bottom from Bill Gates and Michael Dell lining up to see these two in Davos?

  11. Myr says:

    Piece of advice: watch BBerg TV instead of CNBC. Gasparino, Kudlow, Kneale, Liesman, and Cabrerra are all intolerable. Faber is quality, but the rest are bad for your wealth and mental health.