Roubini’s ‘bad banks’ solution

Nouriel Roubini sees temporary nationalization as a fix for banks overwhelmed by toxic assets.

Dr. Doom’s predictions

Economist Nouriel Roubini gives his forecast on unemployment, housing and Geithner’s bank plan.

Roubini: Still in pain

Economist Nouriel Roubini explains this is a U-shaped deep recession and growth will be slow.

Roubini: ‘Bear market rally’

Economist Nouriel Roubini says there is too much optimism about the state of the economy.

Category: Economy, Video

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3 Responses to “Roubini: When will economy recover?”

  1. JD says:

    Roubini is the Arnold Schwarzenegger of economists. Heavy accent, shows absolutely no emotion, and scares the shit out of you.

  2. cdskiller says:

    Roubini, like virtually everyone else, has completely forgotten that the institutions that are in trouble are INVESTMENT BANKS, not commercial banks. In his perfect world, the taxpayer would inject a lot more capital, on top of the trillions already stolen, to save the shareholders and senior bondholders of the hedge fund factories, I mean investment banks, that Geithner’s asinine stress tests show are not totally insolvent. We are talking about criminally reckless, private financial institutions THAT WOULD NOT BE IN OPERATION TODAY, if not for the unprecedented trillions they have already received.
    None of them deserved to survive intact, if they needed our money to survive. Shareholders should be wiped out and bondholders of EVERY private bank that received TARP money or that gorged at the trough of TALF should be forced to take a haircut. And some senior execs needs to be fired. NOT JUST at institutions that fail Geithner’s deceptive and idiotic stress tests. Roubini is either being disingenuous or remarkably naive to assign any kind of legitimacy to the tests, which were fraudulently designed from the start. He should know that. It makes me wonder whether he is angling for a job in the administration.
    Roubini also wants the taxpayer to absorb or purchase as many of the toxic assets sitting on the books of private investment firms as necessary, at whatever price is necessary, to restore them to health.
    He, like Geithner, is lying about the long-term value of the most toxic of those assets, WHICH IS POTENTIALLY ZERO. Any value they have is inflated. Their toxicity is a result of their design, and will not suddenly disappear with wishful thinking. The loans and the bundles and the bonds were all fraudulently rated. EVERY step in the creation of those securities would have to be re-examined which, of course, cannot happen. There is no defensible argument that can be made why struggling taxpayers, including those paying taxes on their unemployment checks, should be forced to absorb the toxic gambling debts of irresponsible traders at investment bank hedge fund divisions. The only argument that anyone has ever made is that to NOT do so would lead to systemic collapse. Well, we are already feeling systemic collapse. Senior bondholders are not. That fear mongering doesn’t fly anymore.
    If Roubini and Geithner were being honest, they would tell people that losses on those assets are guaranteed. It is the height of irresponsibility to attempt to restart the CDO market. It needs to be discouraged, disincentivized, shut down entirely. The instruments that became cancerous need to be forbidden from ever being created again. The OTC derivatives market, ESPECIALLY IN CREDIT DERIVATIVES, must be stopped in its tracks until regulatory reforms and oversight structures are in place. IN THAT ORDER.
    Private groups of wealthy individuals, that’s what investment banks are, have already received, in the past 8 months, more money than has been spent in 7 and a half years on the wars in Iraq and Afghanistan COMBINED.
    When a once a century financial apocalypse occurs, courage is required. The amount of pain that is felt by the industry participants that brought this crisis to the world is of no concern.

  3. ben22 says:

    nouriel looks to be enjoying his fame judging by the sunburn.