More chirpy economic news in the U.S. financial press. From Sunday's Reuters story:
NEW YORK, Aug 3 (Reuters) - The United States is in the second inning of a recession that will last for at least 18 months and help kill off hundreds of banks, influential economist and New York University Professor Nouriel Roubini told Barron's in Sunday's edition.Read the full story here: "Hundreds of banks will fail, Roubini tells Barron's"
Taxpayers will pay a big price for helping bail out the rest of the financial services industry as well, Roubini said -- at least $1 trillion and more likely $2 trillion.
The banks will become insolvent because of mounting losses as a result of the housing bust and because they have only written down their subprime loans so far, he said. Still in front of them are their consumer-credit losses, for which they lack the reserves, Barron's reported.
He also said there are hundreds of millions of dollars outstanding in home-equity loans that could be worth zero, too.
U.S. consumers, meanwhile, are "shopped out" and saving less, while the Federal Reserve's performance in handling the crisis has been poor, Roubini said, because it failed to see that the problem extended beyond subprime mortgage debt.
For those readers whose eyes haven't already glazed over at our mere reference to economic news, Professor Roubini's original Barron's interview is available here: "Yes, That's $2 Trillion of Debt-Related Losses" . (Be sure two check out the two short videos embedded within the article.)
This is the kind of information you're not going to learn about if your information sources are confined to the local press and broadcast news.
Q: So why do we keep harping on the dire condition of the U.S. economy?
A: Because we believe our gentle readers deserve to know the truth.
3 comments:
In the previous comments section, Rudi wrote, "Too bad about the $100 million in public debt Godfrey's already racked up during the 'good times,' however."
Is it possible that Ogden is cursed with proclivity to indebtedness? From the N.Y. Times of April 27, 1890, we learn:
"President Harrison sent his first veto to the House today. He returned, without his approval, the bill 'To authorize the city of Ogden, Utah, to assme increased indebtedness.' 'I do not doubt that the citizens of Ogden will ultimately realize,' he says, 'that the creation of a municipal debt of over a half million dollars by a city of 15,000 population, being about $37 per capita, is unwise.'"
Sorry. That should've been ASSUME increased indebtedness.
MM: neat catch!
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