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kdakota630 (29.88)

Roubini: Expect Emergency Market Shutdown

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October 24, 2008 – Comments (6)

Former Clinton economic adviser Nouriel Roubini says hundreds of hedge funds will fail and that policymakers might have to shut down financial markets for a week or more in response.

"We've reached a situation of sheer panic. There will be massive dumping of assets," and "hundreds of hedge funds are going to go bust," said Roubini, a New York University professor. He was speaking to attendees at a hedge fund conference in London.

Roubini is known for his predictions. In July 2006 he said that the United States would enter an economic recession.

Earlier this year, he forecast a "catastrophic" financial meltdown that he said global central bankers would fail to prevent and would lead to the bankruptcy of large banks exposed to mortgages and a sharp drop in equities.

He warns, too, that the world is heading for a protracted recession that will end the financial dominance of the United States.

Roubini told CNBC that he believes the United States is going to have two years of negative economic growth, quite at odds with most predictions of quarter or two of recession ahead.

"The last two recessions lasted only eight months each. … This time around, this is going to be three times as long, three times as deep. This is going to be the worst recession the United States has experienced since the 1980s."

Emmanuel Roman of GLG Partners, a former division of Lehman Brothers Holdings, agreed with Roubini's dire prediction.

He told the Telegraph that 25 percent to 30 percent of the world's 8,000 hedge funds will disappear "in a Darwinian process," either by going bust or deciding that meager profits are not worth the effort.

"This will go down in the history books as one of the greatest fiascos of banking in 100 years. There needs to be some scapegoats, and the regulators are going to go hunt people. That will be good in the long run," Roman said.

© 2008 Newsmax. All rights reserved.

6 Comments – Post Your Own

#1) On October 24, 2008 at 2:00 PM, awallejr (77.23) wrote:

At least he isn't calling for a depression.  And he does seem to imply that greater governmental regulation is "good in the long run", something counter to what Peter Schiff thinks.

 

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#2) On October 24, 2008 at 2:09 PM, kdakota630 (29.88) wrote:

"The last two recessions lasted only eight months each. … This time around, this is going to be three times as long, three times as deep. This is going to be the worst recession the United States has experienced since the 1980s."

He may not have used the word depression but it sure sounded like that's exactly what he's predicting.

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#3) On October 24, 2008 at 2:41 PM, awallejr (77.23) wrote:

Not really, he is basically comparing it to the early 1980 one, which was rough but certainly not like the 1930s.

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#4) On October 24, 2008 at 3:25 PM, Harold71 (20.43) wrote:

Ha Roubini is a bear?  I guess I'm the Grizzliest of them all.  It's not a 2-3 year deal.  It's a depression.  Fundamentally 5-10 years away from any true economic foundation.

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#5) On October 24, 2008 at 4:42 PM, biotechmgr (34.99) wrote:

A greater Depression it will be. Current events are but a preview of what will happen after a nice Santa Claus rally then the real bust in 2009.

I'm part of the Grizzly club as well.

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#6) On October 24, 2008 at 4:43 PM, biotechmgr (34.99) wrote:

A greater Depression it will be. Current events are but a preview of what will happen after a nice Santa Claus rally then the real bust in 2009.

I'm part of the Grizzly club as well.

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