My favorite quote this week, from Nouriel Roubini. He was responding to the New York Times article referring to him as "Dr. Doom":
The article is a very friendly and sympathetic portrait of my views. I would take issue only with the characterization of myself as being a “perma-bear” or “perpetual pessimist”. For one thing I ended up a realist rather than a pessimist about the current economic and financial crisis; things are turning out even worse than I initially predicted.
My sentiments exactly.
Ohio Fraudclosure
Mish's Global Economic Analysis
Northern Virginia Housing Bubble Fallout
UK House Bubble
Bubble Meter
Breaking News Relevant Articles© Copyright 2012 Housing Doom | Copyright© 2011, AuthentiCraft, Inc.
Off topic-
It appears that Thornberg Mortgage has stopped trading, but so far, no I can’t find an explanation of why.
Also off topic (but you could say related
) -
I’ve been raising my eyebrows at recent claims that you can get up to $5 million FDIC coverage on CDs, definitely in the “too good to be true” category, but …
Old Doom friend, AP’s Rachel Beck recommends the scheme here.
I think Rachel misspoke a bit. The way I see it, CDARS is a private scheme that once got a conditional FDIC blessing.
I see a five-year-old legal opinion on FDIC’s own web site that gives the beast a conditional thumbs up. But if you want to try this at home, read especially the 3rd last paragraph where the lawyer notes that any real personal account you have with a 3rd party bank will of course add to any CDARS money that happens to end up there too.
“4000 – FDIC Advisory Opinions: Do “pass-through” deposit insurance rules apply to funds placed in the ‘Certificate of Deposit Account Registry Service’ [CDARS]“, FDIC–03-03 July 29, 2003 Joseph A. DiNuzzo, Counsel. FDIC.
on topic –
don’t you think it’s funny that anyone who doesn’t believe RE only goes up & appreciation can be double-digits forever are all labeled doomers?
why is being realistic so shunned by this society?
Diana-
I remember when some relatives of mine wanted to invest in a rather questionable business deal. Mr. Twist researched the companies and individuals involved and warned them against it.
They were really upset with him for “meddling” and went ahead and did it anyway. The whole thing fell apart within a year. In spite of the fact that he had no dealings at all with the project, he was told that his “lack of faith” submarined it!
The whole “cause and effect” thing is lost on too many people. Look how many on Wall Street are calling problems in the financial sector “a crisis of confidence”. The problem isn’t that home values are falling, as defaults are increasing- the problem is all those darn naysayers who keep talking about it!
I always liked it in Pinnochio when Jiminy Cricket sang “When you wish upon a star, your dreams come true”. I’m all for the power of positive thinking- I just think it’s a poor investment strategy.
As you say, society frowns on being “negative”. Myself, I think you have to identify the “negatives” in order to do something “positive” about them.
The ’90s were an eventful time for an international economist like Roubini. Throughout the decade, one emerging economy after another was beset by crisis, beginning with Mexico’s in 1994. Panics swept Asia, including Thailand, Indonesia and Korea, in 1997 and 1998. The economies of Brazil and Russia imploded in 1998. Argentina’s followed in 2000. Roubini began studying these countries and soon identified what he saw as their common weaknesses. On the eve of the crises that befell them, he noticed, most had huge current-account deficits (meaning, basically, that they spent far more than they made), and they typically financed these deficits by borrowing from abroad in ways that exposed them to the national equivalent of bank runs. Most of these countries also had poorly regulated banking systems plagued by excessive borrowing and reckless lending. Corporate governance was often weak, with cronyism in abundance.
Good thing we don’t have anything like that happening here in the good ol’ USA.
Keith,
That made me want to hide under the bed like I did as a child after watching a horror movie!
twist,
with 70+% of our economy based on consumer spending, I understand the idea of the easy way out of this crisis. what I don’t get is how they can’t realize that every single time we get out of a crisis using the easy way out (finding somewhere else for people to spend money they don’t have to make money they will never appreciate bc they didn’t earn it; therefore, never being able to keep it) is that it just ends up creating an even bigger crisis in the future.
NO ONE, NOT EVEN THE COUNTRY AS A WHOLE, CAN SPEND THEIR WAY OUT OF DEBT.
How can we expect most people in this country to understand that if Wall Street & the FED don’t?
Every time I hear a news story that states that 70% of the American economy is based on consumer spending, I say, “Why?”
Has consumer spending always accounted for such a large chunk of our economy. How does our 70% compare with other advanced, industrialized economies?
Arizonaslim I do believe that it used to be in the 50% range. So in the last 30 or so years we have shifted 20% of our economy from manufacturing to consumer spending. This can’t bode well for us as a nation.
Andrew Bacevich gives a good interview where he describes why the US overextends itself and he blames congress for giving too much power to the president. It is long but I watched it sunday and was drawn to his argument.
Part of his book is on the link as well as this quip.
“The United States today finds itself threatened by three interlocking crises. The first of these crises is economic and cultural, the second political, and the third military. All three share this characteristic: They are of our own making. In assessing the predicament that results from these crises, THE LIMITS OF POWER employs what might be called a Niebuhrean perspective. Writing decades ago, Reinhold Niebuhr anticipated that predicament with uncanny accuracy and astonishing prescience. As such, perhaps more than any other figure in our recent history, he may help us discern a way out.”
http://www.pbs.org/moyers/journal/08152008/profile.html
metro -
Thanks for the link
I’m deeply suspicious of Reinhold Niebuhr (and Bill Moyers for that matter) and hadn’t heard of Bacevich, but the interview and the book they are discussing both look intensely interesting.
I believe that my father was personally responsible for maybe half of the perceived might that US planners presently think they can apply against the wider world’s problems. I’ve been looking at how this basic misperception has flowed into economic trouble, so it will be exciting to see what Bacevich has come up with in this area.
You are welcome John. It was not exactly on topic but I was reminded of the interview because it brought the topic of economics in the US especially a negative prognosis.