Video Interview: Roubini Preaches Gloom

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Nouriel Roubini, professor at New York University and chairman of RGE Monitor, is renowned for his bearish stance on the US economy and stock markets. Aline van Duyn, US Markets Editor of the Financial Times, has just conducted a three-part video interview with Roubini on a variety of topical issues.

In Part 1 Roubini shares his pessimistic outlook for the US economy. He does not expect a short and shallow recession, but believes it will last 12 to 18 months. He expects the housing recession to get worse; a contraction of consumption; and problems in the financial system well beyond sub-prime mortgages, into residential mortgages, commercial real estate, consumer credit, leveraged loans, corporate bonds and municipal bonds.

Click here or on the image below for Part 1 of the interview.

nouriel-roubini.jpg

In Part 2 Roubini argues that the Frank-Dodd mortgage crisis bill is the only policy proposal that could make a meaningful difference to the mortgage market. Time is running out for the US Congress to take action, however, and Congress has to move in the next few weeks.

Click here for Part 2 of the interview.

In Part 3 Roubini says US equities do not look overvalued if a six-month recession is expected. However, as he expects a 12- to 18-month recession, he expects “significant downward pressure on stock prices”. Roubini thinks, though, the US can avoid a Japanese-style recession due to the policy response.

Click here for Part 3 of the interview.

Source: Financial Times, May 26, 2008.

 

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