Comments on: Roubini Warns of Possible Systemic Meltdown, "Severe Global Depression" http://www.nakedcapitalism.com/2008/10/roubini-warns-of-possible-systemic.html Sun, 22 Nov 2009 18:20:39 -0500 http://wordpress.org/?v=2.8.4 hourly 1 By: Anonymous http://www.nakedcapitalism.com/2008/10/roubini-warns-of-possible-systemic.html#comment-21315 Anonymous Mon, 13 Oct 2008 21:48:00 +0000 http://www.nakedcapitalism.com/2008/10/roubini-warns-of-possible-systemic-meltdown-severe-global-depression/#comment-21315 HP<br/>Isn't it time to revert back to some form of gold standard even though it is far from being perfect? HP
Isn’t it time to revert back to some form of gold standard even though it is far from being perfect?

]]> By: Arto Bendiken http://www.nakedcapitalism.com/2008/10/roubini-warns-of-possible-systemic.html#comment-20804 Arto Bendiken Sat, 11 Oct 2008 08:58:00 +0000 http://www.nakedcapitalism.com/2008/10/roubini-warns-of-possible-systemic-meltdown-severe-global-depression/#comment-20804 Roubini is an unusually astute mainstream economist in that he holds an essentially Austrian view of capital and correctly identifies causes with an almost Misesian historical perspective.<br/><br/>However, his policy recommendations are a polar opposite to the Austrian School; he still retains an innately Keynesian faith in governments' abilities to solve the messes they've created, despite rather stark prior evidence to the contrary. Roubini is an unusually astute mainstream economist in that he holds an essentially Austrian view of capital and correctly identifies causes with an almost Misesian historical perspective.

However, his policy recommendations are a polar opposite to the Austrian School; he still retains an innately Keynesian faith in governments’ abilities to solve the messes they’ve created, despite rather stark prior evidence to the contrary.

]]> By: Anonymous http://www.nakedcapitalism.com/2008/10/roubini-warns-of-possible-systemic.html#comment-20722 Anonymous Sat, 11 Oct 2008 00:05:00 +0000 http://www.nakedcapitalism.com/2008/10/roubini-warns-of-possible-systemic-meltdown-severe-global-depression/#comment-20722 Why would there be redemptions at hedge funds? Don't most of their investor contracts stipulate that the investor would have to wait X days from the request for redemption until the investor's investment (minus losses) is paid back? Why would there be redemptions at hedge funds? Don’t most of their investor contracts stipulate that the investor would have to wait X days from the request for redemption until the investor’s investment (minus losses) is paid back?

]]> By: freude bud http://www.nakedcapitalism.com/2008/10/roubini-warns-of-possible-systemic.html#comment-20618 freude bud Fri, 10 Oct 2008 16:09:00 +0000 http://www.nakedcapitalism.com/2008/10/roubini-warns-of-possible-systemic-meltdown-severe-global-depression/#comment-20618 @ Independent Accountant ... The decision by the majors to defend their stock prices by laying off so many people in the 80s and hiring no one in the 90s is still causing problems in the oil patch today, lest you forget.<br/><br/>There's a reason no one decided to go to school to become an engineer during that time and that, of course, is part of the reason why the cost of new oil is so high just now.<br/><br/>I'm not entirely sure that the oil patch--and, by extension, the world--would welcome a similar tax on the cost of money going forward. But, of course, we do have the mantra of maximizing returns to shareholders without regard to anything else to blame for the situation in both.<br/><br/>The odd schadenfreude of people who are apparently so independently wealthy that they frankly don't give a damn about the rest of the people of the world aside, is this language from Roubini useful or even actionable?<br/><br/>- Politically what he calls for is almost certainly impossible.<br/>- Economically my limited sense is that certain of his provisions, like suspending all foreclosures, will worsen the situation.<br/><br/>If not, why distribute it further? @ Independent Accountant … The decision by the majors to defend their stock prices by laying off so many people in the 80s and hiring no one in the 90s is still causing problems in the oil patch today, lest you forget.

There’s a reason no one decided to go to school to become an engineer during that time and that, of course, is part of the reason why the cost of new oil is so high just now.

I’m not entirely sure that the oil patch–and, by extension, the world–would welcome a similar tax on the cost of money going forward. But, of course, we do have the mantra of maximizing returns to shareholders without regard to anything else to blame for the situation in both.

The odd schadenfreude of people who are apparently so independently wealthy that they frankly don’t give a damn about the rest of the people of the world aside, is this language from Roubini useful or even actionable?

- Politically what he calls for is almost certainly impossible.
- Economically my limited sense is that certain of his provisions, like suspending all foreclosures, will worsen the situation.

If not, why distribute it further?

]]> By: Independent Accountant http://www.nakedcapitalism.com/2008/10/roubini-warns-of-possible-systemic.html#comment-20568 Independent Accountant Fri, 10 Oct 2008 13:00:00 +0000 http://www.nakedcapitalism.com/2008/10/roubini-warns-of-possible-systemic-meltdown-severe-global-depression/#comment-20568 Alan van Altendorf:<br/>We Houstonians, earth men, must stick together. I agree with you. It's more than time to let the finance sector collapse. When Wall Street has a 60% unemployment rate, like we had in the oil patch in 1986-87, we'll know the "crisis" is about to end. Roubini is all wet here. Let his students at NYU's Stern get real jobs. In mining, manufacturing, the oil patch, agriculture, etc. Wait, the time may come we will see thousands of people protest the bailout in front of the Treasury building as recently happened in Taiwan. Whaaat? There was a protest in Taiwan over Lehman Brothers having sold fraudulent securities there. Or so the Taiwanese say. Our crisis is becoming a foreign policy disaster too! Talk about "Ugly Americans"! Alan van Altendorf:
We Houstonians, earth men, must stick together. I agree with you. It’s more than time to let the finance sector collapse. When Wall Street has a 60% unemployment rate, like we had in the oil patch in 1986-87, we’ll know the “crisis” is about to end. Roubini is all wet here. Let his students at NYU’s Stern get real jobs. In mining, manufacturing, the oil patch, agriculture, etc. Wait, the time may come we will see thousands of people protest the bailout in front of the Treasury building as recently happened in Taiwan. Whaaat? There was a protest in Taiwan over Lehman Brothers having sold fraudulent securities there. Or so the Taiwanese say. Our crisis is becoming a foreign policy disaster too! Talk about “Ugly Americans”!

]]> By: David http://www.nakedcapitalism.com/2008/10/roubini-warns-of-possible-systemic.html#comment-20567 David Fri, 10 Oct 2008 12:49:00 +0000 http://www.nakedcapitalism.com/2008/10/roubini-warns-of-possible-systemic-meltdown-severe-global-depression/#comment-20567 Hedge Funds! Compared to minor problems of Fanny Mae that's what's concerning me. <br/><br/>Help! Why have we've been hearing that the assessed values in 'Hedge Funds' are at the 500 Trillion level? I am trying to grasp that number and wikipediaed it and then get the <a HREF="http://www.bis.org/" REL="nofollow">BIS</a> banking system instead then realize that all of the values of Everything couldn't come close to that 500 Trillion level. <br/><br/>So thus, it's the Mother and Father of all Bubbles. <br/><br/>Obviously since the Electric Koolaid writer announces on NPR that the end of Sept maybe is the doom's day (not in those words....), one wonders about the chill in Greenwich, Conn (maybe minus a n)...and we have until next year to assess that hell that we've entered due to the redemption period of three monthes. Does anyone think there <i>hasn't</i> been a huge calling of the chips in the biggest of all casinos? Does anyone think there is money to cover those 'chips'? <br/><br/>Tell me again where those 500 Trillions are, someone? Hedge Funds! Compared to minor problems of Fanny Mae that’s what’s concerning me.

Help! Why have we’ve been hearing that the assessed values in ‘Hedge Funds’ are at the 500 Trillion level? I am trying to grasp that number and wikipediaed it and then get the BIS banking system instead then realize that all of the values of Everything couldn’t come close to that 500 Trillion level.

So thus, it’s the Mother and Father of all Bubbles.

Obviously since the Electric Koolaid writer announces on NPR that the end of Sept maybe is the doom’s day (not in those words….), one wonders about the chill in Greenwich, Conn (maybe minus a n)…and we have until next year to assess that hell that we’ve entered due to the redemption period of three monthes. Does anyone think there hasn’t been a huge calling of the chips in the biggest of all casinos? Does anyone think there is money to cover those ‘chips’?

Tell me again where those 500 Trillions are, someone?

]]> By: Anonymous http://www.nakedcapitalism.com/2008/10/roubini-warns-of-possible-systemic.html#comment-20562 Anonymous Fri, 10 Oct 2008 12:31:00 +0000 http://www.nakedcapitalism.com/2008/10/roubini-warns-of-possible-systemic-meltdown-severe-global-depression/#comment-20562 For a Palin-esque and Panglossian antidote to Roubini, one of the University of Chicago acolytes offers this in today's NY Times:<br/><br/>http://www.nytimes.com/2008/10/10/opinion/10mulligan.html For a Palin-esque and Panglossian antidote to Roubini, one of the University of Chicago acolytes offers this in today’s NY Times:

http://www.nytimes.com/2008/10/10/opinion/10mulligan.html

]]> By: wintermute http://www.nakedcapitalism.com/2008/10/roubini-warns-of-possible-systemic.html#comment-20546 wintermute Fri, 10 Oct 2008 10:46:00 +0000 http://www.nakedcapitalism.com/2008/10/roubini-warns-of-possible-systemic-meltdown-severe-global-depression/#comment-20546 Roubini is right about most things - but WRONG about suspending foreclosures. This will be a big disincentive to all the struggling homeowners now cutting back on daily spending to cover their monthly mortgage payments. The unintended consequences of this action could be to kill off all non-government backed mortgage lending for years.<br/> <br/>A better option would be to forcibly convert distressed mortgages to the Fed funds rate plus say 1% and extend the term of the mortgage to 50, 70 or 100 years to cover the original loan. This will make many distressed mortgages affordable - and provide an incentive to householders to stay in their homes. The alternatives: renting or eviction - will be financially worse options. <br/>Super-long-term mortgages will help put a floor under the housing-market - but only as a temporary measure. When normal conditions resume these should fall out of favour with market pressures or regulation (to avoid this being a contributing factor to the next housing boom). Roubini is right about most things – but WRONG about suspending foreclosures. This will be a big disincentive to all the struggling homeowners now cutting back on daily spending to cover their monthly mortgage payments. The unintended consequences of this action could be to kill off all non-government backed mortgage lending for years.

A better option would be to forcibly convert distressed mortgages to the Fed funds rate plus say 1% and extend the term of the mortgage to 50, 70 or 100 years to cover the original loan. This will make many distressed mortgages affordable – and provide an incentive to householders to stay in their homes. The alternatives: renting or eviction – will be financially worse options.
Super-long-term mortgages will help put a floor under the housing-market – but only as a temporary measure. When normal conditions resume these should fall out of favour with market pressures or regulation (to avoid this being a contributing factor to the next housing boom).

]]> By: russell1200 http://www.nakedcapitalism.com/2008/10/roubini-warns-of-possible-systemic.html#comment-20538 russell1200 Fri, 10 Oct 2008 09:46:00 +0000 http://www.nakedcapitalism.com/2008/10/roubini-warns-of-possible-systemic-meltdown-severe-global-depression/#comment-20538 I have found Rs comments on commercial construction to be fairly clueless. The hedge funds seem to have been collapsing for a while: almost the whole way through.<br/><br/>I like him because he has had to the play the role of a Casandra arguing for the obvious and being vilified in the process for some time before the obvious came to pass. His specific prognostications are interesting, but not much more. I have found Rs comments on commercial construction to be fairly clueless. The hedge funds seem to have been collapsing for a while: almost the whole way through.

I like him because he has had to the play the role of a Casandra arguing for the obvious and being vilified in the process for some time before the obvious came to pass. His specific prognostications are interesting, but not much more.

]]> By: Francois http://www.nakedcapitalism.com/2008/10/roubini-warns-of-possible-systemic.html#comment-20526 Francois Fri, 10 Oct 2008 08:25:00 +0000 http://www.nakedcapitalism.com/2008/10/roubini-warns-of-possible-systemic-meltdown-severe-global-depression/#comment-20526 I'm afraid Prof. Roubini do not realize how incredibly difficult it would be for the politicians to even UNDERSTAND, let alone accept that his suggestions must be implemented in one form or another.<br/><br/>They do not have the capacity, nor the inclination to move so radically so fast.<br/><br/>The pain is not severe enough,(yet) the mob hasn't chase them with pitches and forks to make them more mentally malleable to reality.<br/><br/>So, we will have to go through a meltdown and depression. I’m afraid Prof. Roubini do not realize how incredibly difficult it would be for the politicians to even UNDERSTAND, let alone accept that his suggestions must be implemented in one form or another.

They do not have the capacity, nor the inclination to move so radically so fast.

The pain is not severe enough,(yet) the mob hasn’t chase them with pitches and forks to make them more mentally malleable to reality.

So, we will have to go through a meltdown and depression.

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