Nouriel Roubini: The Housing Debate: "it is not going to be okay"
The Housing Debate: Bull vs. Bears
Monday, January 14, 2008 | 02:30 PM
If you missed the Real Estate Connect NYC 2008 debate on the impact of Housing last week, it is now available online. (Broadband suggested).
The video is 54 minutes and it is worth watching and has some funny moments:
Highlight Nouriel Roubini speaks at:
33:51 - "the contagion has been been massive"
39:16 - "consequences are going to be severe...it's NOT going to be okay, it will be dramatic lots of people are going to lose jobs, including lots of people here"
PROFESSOR NOURIEL ROUBINI --->
Nouriel Roubini, professor of economics at New York University's Stern School of Business, is calling it the worst housing recession since the days of the Great Depression. Roubini said he believes that a U.S. economic recession began in late 2007 and "is going to be much more severe" than economic recessions earlier this decade and in the early 1990s, with credit problems spreading across the financial system and impacting all forms of home loans, commercial real estate loans and even auto loans, among other forms of financing.
"What we're worried about today is a systemic financial crisis. This is a severe, massive problem. It's going to take years to adjust," said Roubini. Home prices have already fallen 15 percent to 20 percent in some areas from their peaks during the latest housing boom, with housing starts tumbling 40 percent and sales sliding about 50 percent, he said.
If prices fall 30 percent from the peak, that would represent about $6 trillion in lost value and millions of homeowners with negative equity, he said.