Nouriel Roubini: "I Told You So"
Nouriel Roubini writes about the sub-prime mortgage market meltdown and, with considerable justification, points out that he was warning about this problem long ago.
And here was my own dismal forecast from last October.
On my modest side last August, when I started to forecast a recession in the US in 2007 by Q2 that would be triggered by the housing bust, I also argued that this housing bust would soon also lead to serious risks and distress in the financial system. I pointed out that such stress and vulnerabilities would first be noticed in the subprime segment of the mortgage market as many (but not all of) of the excesses of the last few years in mortgage finance were concentrated in this market. I pointed out that the housing bubble and the credit bubble associated with it reckless lending practices and with regulator being asleep at the wheel while this unregulated gambling was taking place. I argued that the result would be financial distress and bankruptcy for many lenders and a systemic banking crisis similar to - or most likely worse than - the S&L crisis.Here is what I wrote on this topic last August. And a year before that, I linked to a statement by Ed Leamer that a recession would follow the bursting of the housing bubble sometime this year.
And here was my own dismal forecast from last October.
I can readily imagine US GDP growth rates of less than an annualized rate of 1% a year from now, and I just hope the Fed has enough foresight and control to keep them from turning negative.Update:Dave Altig has much more, with some illuminating graphs, about the mortgage markets.
Category: Disasters, Economics, Housing, Macroeconomics, Money Posted on
Wednesday, March 14, 2007 at 7:46am
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