Listen to the video, it’s pretty scary.
Bloomberg: Roubini Says `Panic’ May Force Market Shutdown
Courtesy of Nouriel Roubini
Bloomberg October 23, 2008: Roubini Sees Crisis Worsening, Hurting Emerging Markets (click for video)
From Bloomberg:
"Oct. 23 (Bloomberg) — Hundreds of hedge funds will fail and policy makers may need to shut financial markets for a week or more as the crisis forces investors to dump assets, New York University Professor Nouriel Roubini said.
“We’ve reached a situation of sheer panic,” Roubini, who predicted the financial crisis in 2006, said at a conference in London today. “There will be massive dumping of assets,” and “hundreds of hedge funds are going to go bust,” he said.
Group of Seven policy makers have stopped short of market suspensions to stem the crisis after the U.S. pledged on Oct. 14 to invest about $125 billion in nine banks and the Federal Reserve led a global coordinated move to cut interest rates on Oct. 8. Emmanuel Roman, co-chief executive officer at GLG Partners Inc., said today that as many as 30 percent of hedge funds will close.
“Systemic risk has become bigger and bigger,” Roubini said at the Hedge 2008 conference. “We’re seeing the beginning of a run on a big chunk of the hedge funds,” and “don’t be surprised if policy makers need to close down markets for a week or two in coming days,” he said.
Roubini predicted in July 2006 that the U.S. would enter an economic recession. In February this year, he forecast a “catastrophic” financial meltdown that central bankers would fail to prevent, leading to the bankruptcy of large banks exposed to mortgages and a “sharp drop” in equities…
“In a fairly Darwinian manner, many hedge funds will simply disappear,” Roman said, speaking at the same event as Roubini…
“Things are getting very ugly also in the emerging markets,” Roubini said. “We used to say when the U.S. catches a cold, the rest of the world sneezes. Well, the U.S. now has chronic and persistent pneumonia. It’s becoming a mess in emerging markets.”…
Roubini, a former senior adviser to the U.S. Treasury Department, earlier this month said that the world’s biggest economy will suffer its worst recession in 40 years.
“This is the worst financial crisis in the U.S., Europe and now emerging markets that we’ve seen in a long time,” Roubini said. “Things will get much worse before they get better. I fear the worst is ahead of us.”
Full article here.
