8 really, really scary predictions

[cali]

Dow 4,000. Food shortages. A bubble in Treasury notes. Fortune spoke to eight of the market's sharpest thinkers and what they had to say about the future is frightening.
1 of 8Nouriel Roubini Known as Dr. Doom, the NYU economics professor saw the mortgage-related meltdown coming.

We are in the middle of a very severe recession that's going to continue through all of 2009 - the worst U.S. recession in the past 50 years. It's the bursting of a huge leveraged-up credit bubble. There's no going back, and there is no bottom to it. It was excessive in everything from subprime to prime, from credit cards to student loans, from corporate bonds to muni bonds. You name it. And it's all reversing right now in a very, very massive way. At this point it's not just a U.S. recession. All of the advanced economies are at the beginning of a hard landing. And emerging markets, beginning with China, are in a severe slowdown. So we're having a global recession and it's becoming worse.

Things are going to be awful for everyday people. U.S. GDP growth is going to be negative through the end of 2009. And the recovery in 2010 and 2011, if there is one, is going to be so weak - with a growth rate of 1% to 1.5% - that it's going to feel like a recession. I see the unemployment rate peaking at around 9% by 2010. The value of homes has already fallen 25%. In my view, home prices are going to fall by another 15% before bottoming out in 2010.

<snip>

http://money.cnn.com/galleries/2008/fortune/0812/gallery.market_gurus.fortune/index.html

[Mike 03]

1. Instant Recommendation. Thank you, Cali. This is extremely important.

And this is so on point with respect to the conversations going on in other threads.

I know we all want this crisis to come to an end, but it's much worse than most people seem to realize, as this commentary enumerates.

The most frightening prediction there is "bubble in Treasury notes." That is my absolute worst nightmare. As Paul Krugman has pointed out, there is nothing sacred or invincible about Treasury Notes. We all HOPE they are invincible. The truth is, we invest in them because if it gets to the point that Treasuries are no longer liquid, then things are so bad that there's no point in even having money anymore.

That would truly be a catastrophe for the United States.

[trof]

8. People bought 3 month Ts that yield .01% interest.

T bill auction 2 or 3 days ago.
For all practical purposes, that's zero interest.
They just wanted to invest in something that wouldn't go DOWN in price.
:-(

[MercutioATC]

2. A little too doomsday for me, but I've been preaching this for 18 months.

This has the potential to be very very bad.

[On the Road]

3. While I'm Skeptical of Doomsday Predictions in General

These predictions sound pretty realistic. Maybe that's because of the quality of the people making them.

[willing dwarf]

4. Abridgbed Roubini: Don't breathe, it'll cost you!

but really, everything he says makes real sense.

I keep reminding myself that all my favorite stories from the father's childhood centered round the depression years. The stories were great, so many comic mishaps, moving house in the middle of the night, squeaking by, feasting guests on the odd cumquat and a bean...

It's a little different when you're living it yourself, eh?

[Mike 03]

5. I know, he is very, very pessimistic, but many of his projections, which seemed so

dire six months ago, are now being replicated by firms like Goldman Sachs, Morgan Stanley, and many analysts in Europe, such as the additional fifteen to twenty percent collapse in the price of housing.

Like most people, I hope he's wrong, but he's damned intelligent and so far has been damned right.

[Initech]

6. What pisses me off is that the REPUBLICANS could have fixed this years ago.

Instead the mere mention of a terrible economy sent them running like dogs with their tails between their legs going "LA LA LA LA LA LA LA LA LA LA LA LA LA". All it would've taken is a little effort on their part instead they did nothing (like usual) and blamed it on us (like usual).

[Tierra_y_Libertad]

7. The really scary thing is that desperate people turn to "strong" leaders.

The kind that promise quick fixes and miracles wrapped up in xenophobia and nationalism.

[cali]

9. it seems, however, that people have turned to a different kind of

strong leader. Let's hope that lasts.

[Festivito]

10. Previously posted. DU link.

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=114x50319

[autorank]

11. He's been right a ll along k*r

I've been reading him for about the last year and a half. It's all unfolded as he's said. Here's his website address http://www.rgemonitor.com/

Here's another prophet from 2005:

"But it is an altogether different story when it comes to analyzing options, or a portfolio of derivatives, especially those with lots of complicated bells and whistles. In most cases, valuation and risk assessment depend on mathematical formulas and computerized models, with many inputs derived from estimates and past data. That is all well and good if the tools are perfect and the history is complete.

Unfortunately, there is little evidence that this is the case. In truth, many experts believe the derivatives market rests on a number of very precarious assumptions that have yet to be tested." http://www.financialsense.com/editorials/panzner/2005/1109.html

[JohnnyRingo]

12. K&R ...Though it's not very uplifting, it deserves note.

If only there was someone to blame.
Lemme think a minute....