Roubini's Latest 'Dr. Doom' Prediction: More Than 400 Banks Will Fail

Roubini's Latest 'Dr. Doom' Prediction: More Than 400 Banks Will FailIt didn't take long for Nouriel Roubini to come up with his next dire prediction: The New York University economics professor with the nickname "Dr. Doom," who recently said the chances of a double-dip recession are more than 40%, now says that even if the U.S. and European economies manage to avoid a double dip, it will still feel like a recession, and more than 400 U.S. banks will likely fail.

Speaking to CNBC, the renowned economist said the U.S. economy will remain weak in second half of the year, with growth below par at best. He reiterated what he has previously said -- that tailwinds will become headwinds. "We have to expect the new normal," he told CNBC. "We do not need a double dip for it to feel like recession."

With no private sector jobs growth, and weak consumption, exports and housing, there are no final sales and no final demand, he explained. And if any world economies hoped to move forward unaffected by weak U.S. consumption, they will soon discover that they can't as the slowdown in the U.S. impacts China, Japan and the eurozone.

The deleveraging of governments and consumers in the developed world has to continue, Roubini said, and while the biggest banks have been supported, "800-plus small- and medium-sized banks in the U.S. remain on the critical list and half of those will go bust."

The economist repeated his previous statements that policymakers are out of moves to stimulate the economy, and that the U.S. is facing a liquidity trap and has insolvency problems. But, for a change, he suggested a plan: "What we need [are] credible spending plans over the medium term on health care, welfare and retirement age. This will create a fiscal constraint lasting well into next year."

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Marcia

i just got to say if we are to cut spending, then WHY dont they do it from the top? they always hit the poor and middle class. those in the white house what ever there job cut there pay to match are"s, get it to at least 10$ a hr and see how long they will last at a job or how long they will hang on to it. and those purks//// heck they cost alot get rid of them

September 09 2010 at 10:52 AM Report abuse rate up rate down Reply
jtran8424

I believe there IS hope if we were to open up the offshore accounts and collect the back taxes that were never paid with the interest accrued from the birth of the account to today. Tax evasion is a felony, for all of you sho feel this would not be a nice thing to do, it is the Treasury's money sitting in those accounts, the "Gipper" had already 30 years ago reduced the taxes on the ridh and wealthy by 70% and 3 hears later we were in the second deepest recession in history for the time, which should have told us, "NO, we cannot survive without the taxes from the rich and wealthy, but even still, they did not pay that measly 30%, stashing their cash into offshore accounts faster than you can say Mercedes Benz. Let the Republicans get over it, we need all their back taxes, and stop blaming everything on us Melting Middle and Working Poor classes, for having children who need an education so they can make enough money to handle the cost of running the country when they retire, because they'll accept that you can't squeeze blood out of a stone, like the Republicans want to, and they will catch up with the back taxes from those offshore accounts. It's only a matter of when. Be smart, do it now, and maybe they will give you a break, like house arrest, and not stick you in a cell, like Mr. Snipes. That right there is what we have to do. The "Gipper" showed us what happens when you stop taxing the rich and wealthy as they should be, higher than the Melting Middle and the Working Poor. And Minimum Wage must be raised to better the poverty level, that is clear, we cannot expect our own workers to work for below poverty level wages when we would shout out loud about another country doing the same thing and call it a Human Rights Issue, the pot calling the kettle black. Let us live up to the image we have of ourselves, fine, upstanding, CHRISTIAN Americans, and not have the CEO making 262 times the average worker as of 2005 when in 1965 they were making 24 times the average worker and w're not talking about the lowest paid workers here, (1996, Economic Policy Institute, Lawrence Mishel, "CEO-to-worker pay imbalance grows"). You must now see that we have a problem, Houston, and it's called GREED. We cannot have the Richest Aericans deciding if it's ok to have 36 in their Kindergarten or 52 kids in a thrid grade classroom, Samsula Elementary, Florida. We know they are going to say NO NEW TAXES, ok, then let us have all your back taxes from your offshore accounts, that's even better, then you will wish you had said oh, sure let's raise the taxes on the rich and wealthy, but when the smart people in Washington begin thinking about those old offshore accounts because the people are screaming "you can't take back the class size amendment, too late, our kids are not going to grow up to be ignoramuses" well its payback time, boys, and Dr. Doom can go back into his cave, because he underestimates the morality and ethics of our government, especially when it comes to our children, they cannot vote now, but give them time, and every time the children have to share books and ask why, well you don't think the teacher are going to cover up for you, they are going to say it like it is, and when there are no field trips anymore, and they had to cut out art and music and PE, and the kids ask why, you done think the teachers are going to tell them stories, do you, you are building your own graves. We do have the money for quality education, it just sitting in other people's offshore accounts, let's tell it like it is. This depression need not last one more day if the back taxes on those accounts were paid, and you know it and so does Dr. Doom. He's just so sure we'll never get it out of you...you know what, people who turn in suspected tax evadors get 10% of the total booty, and the IRS and Treasury get 90% of what they would never otherwise would have seen. That's 10% folks...just think about it. It's legal or the IRS wouldn't be advertising it on their web site, it ethical because if you can help the IRS collect this money you are helping a nation in economic distress, and it is moral, just ask yourself, would God want me to help the Treasury to bring our country back up on it's feet? I don't think I have to tell you the answer to that. Well, stash up your morals in that old black bag and talk, talk, talk.

September 06 2010 at 6:17 AM Report abuse rate up rate down Reply
clearhoads7

I can see he is a aprt of doom and gloom polictics and we all know when that was started about eight years ago! need i say more!

September 05 2010 at 5:31 PM Report abuse -1 rate up rate down Reply
Judy

Hello? Anyone? This situation we find ourselves in, is soooo beyond anything about party politics. It is wholly and totally about a world economy that will assure a wider separation of class, and guarantee to bring the people of the United States to our knees. Why else have the “checks and balances” allowed all the things to take place that have us in this mired economy? They gave it to us a teaspoon at a time, and we swallowed it. Consider these few facts (there are so many more): Zero tax on imports. “Managed” health care. Mosque on GZ. Look at the big picture here, and tell me is there anything left that is sacred? I have NEVER been a radical person, but am beginning to feel a need to overthrow this government. Though admittedly, I am afraid of a Chinese take-over. I pray, the Lord help us!

September 05 2010 at 3:57 PM Report abuse +2 rate up rate down Reply
2 replies to Judy's comment
magyymae1

There is no mosque at ground zero. There is a cultural center planned for several blocks away that has a small space for prayer and meditation. this site now holds an empty burlington coat factory store. Have you forgotten that one of the main reasons our country was founded was for freedom of and for religion? I am a Christian and I see no reason why this cultural center should not be built. would anyone object it a Christian church was built where Timothy McVeigh bombed the Federal building?

September 05 2010 at 4:21 PM Report abuse -3 rate up rate down Reply
clearhoads7

fear not sister the muslim and russian and chinaness will all be destroyed at the battle for isreal and the united states will fight them and god will come down from the heavens and strike them assunder because the jewish our god chossen people and israel is god chosen land and not one foot of any enemy will step one step into gods lands its sacred and the gentiles our also the people of christ and god read the book of acts where the apostle said we should go to asia and god said you should never go to asia so i guess that takes care of that they worship idolsand god was not going to waste his time on asia because he already new they would reject him as well as muslim they die and go to hell none of any bomber or a people they have no respect for the living and have no value of life!!!!!!!

September 05 2010 at 5:54 PM Report abuse rate up rate down Reply
CATANIA

CLOWARD-PIVEN....Exactly as planned.

September 05 2010 at 3:55 PM Report abuse rate up rate down Reply
Eddie

These weaker banks should be weeded out if their managers were greedy enough to make risky loans to people with bad credit and no money down. It's survival of the fittest.

September 05 2010 at 3:52 PM Report abuse rate up rate down Reply
Condley

He is right, their will be massive bank failures. But the vast majority of banks that are in real trouble are very small and probably should have never been chartered in the first place. They are mainly located in small towns across America and service the blue collar and below economic ladder. These are the uneducated and unskilled people who don't have a pot to piss in and who are experiencing very high unemployement rates. They never had very good credit to begin with, and now they in big trouble financially. Unfortunately, a lot of these banks made loans on the "good ol boy" system and the "good ol boys' are defaulting. I have four of these banks in a small town near where I live. They escaped federal regulators because they were so small, but now they are calling attention to themselves because of their financial difficulties.

September 05 2010 at 3:48 PM Report abuse rate up rate down Reply
1 reply to Condley's comment
LaharlD2

Never knew much about blue collars specifically Condly. Thanks.

September 05 2010 at 4:48 PM Report abuse rate up rate down Reply
keithj77441

since obama as a scum lawyer sued the banks playing the race card and using acorn thugs to harrass and discredit banks, all because they were not loaning subprime money for mortgages to unqualified buyers and criminal gimmegrants, now many have and will fail.

September 05 2010 at 1:38 PM Report abuse +6 rate up rate down Reply
1 reply to keithj77441's comment
taerodmoon

you are grotesquely stupid.

September 05 2010 at 3:09 PM Report abuse -1 rate up rate down Reply
pckesq

We should have charged Iraq a fee for liberating them. I know we are the world's policeman but why does it have to be on our dime?

September 05 2010 at 1:37 PM Report abuse +17 rate up rate down Reply
actionhero

The political pressure on obama and the dems is reaching critical mass. I just heard osama is considering a payroll holiday. This republican idea is welcome news.

September 05 2010 at 1:35 PM Report abuse -3 rate up rate down Reply