Leave it to you to post that Roubini Rubbish! Here is a much more thoughtful take on the credit "crisis..." It is about common sense rather than more of your fear-mongering!
Let's see what we posted up in 2006 regarding Dr. Roubini.
From the IMF, Sept 7, 2006:
Thanks very much for the kind introduction and thanks for also to Prakash Loungani for inviting me to this event.
Actually, I sent a PowerPoint presentation that was all text, not even a picture. It was nicely reformatted by a staff member here, [Dominique Raelison-Rajaobelina], who added this little chart on the top and side. They say a picture is worth a thousand words. This is just the perfect picture because it is essentially the way I see the United States.
So maybe I should not even give the talk, just the chart will be just enough.
The other comment I should say at the beginning is that I have been quite outspoken about the fact that I believe we're going to have a recession, but that in some sense clashes with scholarly evidence. Prakash Loungani has done some of the leading work on it, showing that forecasters are usually pretty bad, or lousy actually, in forecasting a recession. He wrote this article in 2001 that reached the following conclusion: "The record of failure to predict a recession is virtually unblemished."
So given that, I would say that I'm not a professional forecaster, so maybe I could get it right. That might be the way I justify it. The conjecture in Prakash’s paper was that usually forecasters because of a series of professional biases tend to essentially be too optimistic and, therefore, when there's a big turning point of the business cycle they tend to miss it. So maybe not being a professional forecaster might allow me to end up saying something correct.
Summary of main points of the talk
I'll just summarize my main points here right at the beginning and then flesh them out in a little bit in more detail. These are essentially the five points I've been making for a while now.
• One: there is a risk that the U.S. growth slowdown that we are observing right now this year is going to end up in recession by early next year. So we're going to have a hard landing rather than the soft landing that most people believe. The consensus is still for a soft landing.
• Two: I will argue that the Fed is going to ease interest rates at some point this fall or winter as there are more signals about the recession, but this easing is not going to prevent the recession. The recession is going to occur regardless of the Fed easing.
• Three: There is a view that even if the U.S. goes into a mild slowdown or a severe one, the rest of the world could decouple, with growth in Asia and Europe picking up while the U.S. may be slowing down. I believe for a number of reasons that the world is not going to decouple from a U.S. hard landing. As they say, when the U.S. sneezes, the rest of the world gets a cold. I think that the world still gets the cold when the U.S. slows down.
• Four: My analysis has implications also for markets. Risky assets will underperform in the U.S. and the rest of the world, and not just the equity markets but also commodities and other ones.
• Five: The final point is about the unsustainability of the U.S. current account deficit, the risk that essentially at some point foreigners become less willing to finance the U.S. The story I'm going to tell you today is one where shocks to the economy lead to consumer burnout, but they may also trigger foreigner flight from dollar assets.
So those are the five main points. I would say that the first one is the crucial one because if you believe the first one, then the other ones more or less logically derive from it.
<MORE AT THE LINK> http://www.businesscycle.com/news/press/1643/
So to conclude: my view is that the risk of a hard landing is very high for the U.S. economy. I see essentially a recession coming by next year. I give it a very high likelihood. I argue that housing today, like the tech bust in 2000-2001 will have a macro effect; it is not going to be just a sectoral effect. I argue that U.S. consumers are now close to a ‘tipping over’ point given all the vulnerabilities I have discussed. I argue that the Fed easing will occur, so the next move is going to be a cut, but it is not going to prevent a recession. And, finally, I argue that the rest of the world is not going to be able to decouple from the U.S. even if it is not going to experience an outright recession like the United States. So on that cheerful note, I will stop. Thanks.
and then an Article from August 2008 summarizing the past 30 months as predicted by Roubini.
and here is what Roubini has to say now
in his blog.
RGE Monitor : Nouriel Roubini Blog[FeedShow RSS reader]
So, Jay, wanna try and poke holes in his opinions? Good luck with that.