When in 2006 Professor of Economics, Stern School of Business at New York University's Nouriel Roubini spoke to economists at the IMF, he said that America is waiting for a brutal financial and economic crisis.
Roubini argued that the United States will face the "oil shock" of the crisis in the property market, with the fall of "consumer confidence" and the recession - that is, with economic stagnation, if not recession.
professor argued that when the mass of mortgage debtors in the US will not be able to cope with the payments, the whole system will collapse of mortgage-related securities - and that trillions of dollars.Then, they say, it staggered the entire global financial system.Next
be maimed or even destroyed by hedge funds, investment banks and other basic financial structures: such as mortgage corporation "Fannie Mae" and "Freddie Mac".
takkzhe Roubini said that if someone in the world imagines that it is possible to disconnect from the American economy, he is deeply mistaken: "If America sneezes, the whole world is sick runny nose - in this respect nothing has changed."
own statement Roubini was met mocking laughter of American scientists and economists.They pounced on him like a flock of black crows on the white "otschepenku."
Like this upstart Iranian Jews dare say such a thing, when unemployment and inflation in the US is low, the economy, though still rather weak - but evinces growth!And anyway, they say, Roubini - the old pessimist, who regularly performs in gloomy prophecies, without using any mathematical models.But predictions Roubini come true with frightening accuracy.
When Roubini again invited to speak at the International Monetary Fund in September 2007, it no longer looked like a madman.He warned that there was a threat that burst some "respected the structure" on Wall Street.
In February this year, an American professor came up with yet another frightening prophecy.
This time he promised a series of bankruptcies of the banking sector, to cope with which the authorities are unable to prove, and the stock market - a catastrophic decline.
These comments are now known to have anticipated the collapse of the investment bank Bear Stearns and Lehman Brothers, as well as the historic collapse of stock indices.
after, the US Federal Reserve began frantically pumped money some investment banks and brokerage houses, revealing them preferential credit lines.
And what happened?Most American economists said that the crisis is over.
Professor Roubini called it "delusional complacency» ("delusional complacency") and predicted most dreadful developments.One: a wave of corporate bankruptcies, falling real estate market, as well as - the collapse of one of the large regional or federal banks that provoke panic among investors across the country.
Again Roubini confounded most American economists failed bank Indymac, (California).
now to listen more attentively to Roubini.
He speaks to the US Congress, in Davos, meets with the heads of central banks.And all the time
predicts a systemic crisis of the banking system of the United States.
studying a series of economic crises of the 90s, the talented and versatile educated scientist came to the conclusion that the US economy, in general, suffers from the same defects and distortions, and that the country's "rising markets» (emerging markets), which experienced a severe crisis (Mexico in 1994, Thailand, Indonesia and South Korea in 1997-1998. Brazil and Russia in 1998 and Argentina - in 2000).
What's that in the US, according to the professor - the same weakness.The current account deficit (the country spends more than it earns), the financing of this deficit through excessive borrowing abroad, poor regulation of the banking system, which borrows heavily wildly and recklessly distributes loans.
And all this is complemented by weak corporate governance, heavily implicated in the corruption.
Roubini did not believe, because he worked on the historical parallels, and compared to the economies of different countries.He delves into the essence of what is happening and take into account all aspects of the case.And ... he was right.
Nassl When Jim (Jim Nussle), in charge of the White House for the state budget, announced in July 2008 that America has avoided recession, Roubini expressed the strongest doubts.According to him, this will be the worst recession since the collapse in 1929
So, on the horizon - rising unemployment, corporate bankruptcies and other "charms", and for years to come!
October 23 Roubini predicted the possibility of stopping trade in the financial markets.
And after a day of US futures market is temporarily closed trading fell more than 6% after opening.
However, a new Great Depression, according to Roubini is not expected, provided that the senior officials to act promptly and to conduct a wise policy.
Here are the main points of the forecast of Roubini:
American Stock Exchange will fall another 20-30%, reaching the bottom of the earliest in the autumn of 2009 and then will fluctuate over the years.Unemployment in the US will reach 8-9%.
particularly "heinous" Roubini is the prospect of "rising markets"."At this time, the US is not just sneezing, and patients with chronic pnevomaniey. Countries emerging markets are waiting for the monstrous problems."
In early December, Roubini has visited Russia to personally assess how the crisis has hit the Russian Federation.
Here are some of his assessment (Bulletin. 10.12.2008):
Today, Russia is trying to keep the exchange rate higher than the market wants.Intervened to prevent the devaluation, but this can not be done without losing foreign exchange reserves.When the central bank intervenes in defense of the national currency, it reduces the money supply, leading to higher interest rates, and this may push the economy into recession.If you do not want to be given the ruble down.
depreciation can be controlled, fortunately, today Russia, in contrast to 1998, large reserves.But if your currency is overvalued today, because the prices of raw materials that you sell in a few months fell by 65%, its rate should be reduced.How many?Different people give different assessments: 10%, 20%.One thing is clear: it is impossible to maintain a course at the same level, you'll just lose money, spending billions of dollars from the reserves.
I talked with local economists.If such a fall in oil prices, while reducing the rate of economic growth in 2009 to as many expect, 2-3% (and some even say zero growth), with the credit crisis, in this outflow of capital and the fall of the stock market on 70%, with expectations of currency depreciation is clear that the exchange rate should be lower.How many?I can not say exactly, maybe 10% to 20% compared to current levels.
Shortly before the New Year Roubini gave an interview to the Israeli edition of "Kalkalist" (the material published on 27.12.2008).
There is a specific assessment of the prospects for 2009 and recommendations where simple depositors should not invest in 2009.
According to Roubini, dollar assets, US and international equities, real estate can not currently serve as a safe investment.
- We have already passed the peak of the crisis?
- Not at all.People are still surprised how bad is the situation the United States and the world as a whole in 2009.We will see the next bad loans, bank failures, bankruptcies, and an abundance of extremely bad news with regards to revenues and profitability of the companies and financial institutions.Undoubtedly, the worst is yet to come.The crisis in the real economy - in the US and other world markets - will continue throughout 2009.I do not see the indicators by which the situation may improve in the United States until 2010.
in Europe and in developing countries planted no better ... The financial policy of the US administration now has to be very aggressive.But be that as it may, even if the right policies, the crisis will not end earlier than the end of 2009.
- And what are the signs of recovery?
- First, they will be visible in the real economy.In the US, we will have to see the termination of the reduction of personal consumption and the reduction of unemployment.Among the first positive signs will be the end of the fall in prices and reduce profits.The real economy should be back to normal before it will make the financial markets.
- That is, in essence, do you recommend in modern times to stay away from the stock exchanges?
- Time to return to risky financial investments will come only after the peak of the crisis blow.That is not in the course of 2009.The same is true with regards to commodity market, credit market and other risky markets.It is better to invest in government bonds at almost zero percent, you lose 50% of your money. "