Thursday, November 12, 2009

Nouriel Roubini On the next asset bubble

" day this bubble will burst, leading to the biggest co-ordinated asset bust ever: if factors lead the dollar to reverse and suddenly appreciate – as was seen in previous reversals, such as the yen-funded carry trade – the leveraged carry trade will have to be suddenly closed as investors cover their dollar shorts. A stampede will occur as closing long leveraged risky asset positions across all asset classes funded by dollar shorts triggers a co-ordinated collapse of all those risky assets – equities, commodities, emerging market asset classes and credit instruments." Said Nouriel Roubini the NYU economist also nicknamed Dr Doom

1 comment:

Anonymous said...

Is it there a way out? Is there a different economical system we can move to, avoiding ever growing debt? Zeitgeist

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