Sunday, November 7, 2010

Nouriel Roubini on The subprime mortgage Crisis

NOURIEL ROUBINI:".... Unfortunately, I think we're going to have a very severe recession. It's going to last at least 18 months through the middle of next year. And this financial crisis is not going to be over anytime soon.

And the problems are not just problems of housing. Housing has not yet bottomed out. Home prices are going to fall for another 15 percent for a cumulative fall of 40 percent.

The problem was not just subprime mortgage. It was subprime mortgages, near-prime mortgages, prime mortgages, credit cards, auto loans, student loans, commercial real estate, muni bonds, leverage loans that finance deals that should have never occurred, and even a fat tail of the corporate system as a huge amount of junk bond debt is borderline unprofitable and is going to get in trouble.

We have the biggest housing and asset bubble and credit bubble in U.S. history. Now it's going to burst, and many institutions, households, home-builders, financial institutions, and corporations are going to go bust..."
Nouriel Roubini interviewed by PBS Newshour

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