Roubini: New Deal, fire Paulson & Bernanke, Dow 7000, Deflation next 6 months

[D-Mack]

Is Roubini simply being too bearish? "I worry that it'll be worse than I expected," he says in the accompanying video, in which he predicts a slow, possibly L-shaped recovery a la Japan.

...

In the accompanying video, the NYU economics professor ticks off a number of suggestions for whoever wins the election:

Replace Treasury Secretary Hank Paulson and Fed Chairman Ben Bernanke. "We need a clean slate to restore confidence," he says, suggesting market participants have lost faith in current regulators.

Start a $300 billion government works program focused on repairing and expanding our infrastructure. Yes, a new New Deal.

Create a blanket guarantee for all bank deposits. Even with the FDIC raising its insurance limit to $250,000, there's still $2 trillion of uninsured assets in American banks and that money is moving overseas to places like Ireland, which have granted blanket guarantees.

Revise the $700 billion bailout plan (or TARP) so that it just doesn't buy toxic mortgage securities but directly helps recapitalize the banks.

....

In other words, the Dow is going to 7,000, but over the course of months vs. days if Roubini is right, as -- unfortunately for bulls -- he mostly has been for the past two years.

"The policy response is going to become more aggressive [but] a steady flow of bad financial and macro economic news is going to push down equity markets," he says, forecasting a real bottom won't be hit until "sometime next year."

Because of growing slack in the global economy, Roubini says deflation is going to become a much bigger threat in the next six months vs. inflation. In such an environment, cash, Treasuries and gold are the only safe bets he says -- provided your holdings are within the FDIC's new $250,000 insurance cap.

http://www.rgemonitor.com/blog/roubi...sion_is_rising

Did he change from U to L ?

[kingcopper]

Re: Roubini: New Deal, fire Paulson & Bernanke, Dow 7000, Deflation next 6 months

Roubini hadn't really projected what type of recovery was expected. I had assumed a U because he's smart enough to know better than a V!;)

[bpr]

Re: Roubini: New Deal, fire Paulson & Bernanke, Dow 7000, Deflation next 6 months

Start a $300 billion government works program focused on repairing and expanding our infrastructure.

Isn't this EJ's prediction?

[phirang]

Re: Roubini: New Deal, fire Paulson & Bernanke, Dow 7000, Deflation next 6 months

Isn't this EJ's prediction?

Gee, I wonder who gets the contracts...:rolleyes::rolleyes::rolleyes:

Oh, well, good for my recently drawn-and-quartered materials stocks.

[magicvent]

Re: Roubini: New Deal, fire Paulson & Bernanke, Dow 7000, Deflation next 6 months

I thought EJ predicted 5,000???

[rj1]

Re: Roubini: New Deal, fire Paulson & Bernanke, Dow 7000, Deflation next 6 months

Roubini hadn't really projected what type of recovery was expected. I had assumed a U because he's smart enough to know better than a V!;)

I'm thinking a G personally.

[Starving Steve]

Re: Roubini: New Deal, fire Paulson & Bernanke, Dow 7000, Deflation next 6 months

Witnessing the entire gammet of failed Federal Reserve and U.S. Treasury policies now, the new policies of the next administration should be the opposite:

So, instead of lowering interest rates, maybe the new administration should raise interest rates? Instead of bailing-out Wall Street, why not let firms like AIG fail? Instead of letting the dollar go down to nothing, why not re-value the dollar and move toward a gold standard? Instead of de-regulating, why not re-regulate and jail the criminals who created this disaster? Instead of bailing-out failing companies like GM, Ford, and Chrysler, why not let uncompetitive and backward companies fail--- and good-bye to them? Instead of punishing savers, maybe embrace and reward savers. Instead of lowering taxes, raise taxes. Instead of waging endless wars and spending on defence, why not wage peace and slash spending? Instead of embarking on the delusion that deficits don't count, as the Bush Administration has with supply-side economics, why not run surpluses and cut federal spending? Instead of trickle-down economics, how about trickle-up economics--- to help the workers instead of CEOs?

This is the only way out of this mess: to do the opposite of what is being done now in Washington, and the sooner, the better. Although not every new approach may work, try these new approaches and see what works and what does not work.

[hellstan]

Re: Roubini: New Deal, fire Paulson & Bernanke, Dow 7000, Deflation next 6 months

I thought EJ predicted 5,000???

And gold going 1:1 with the Dow. :cool:

[grapejelly]

Re: Roubini: New Deal, fire Paulson & Bernanke, Dow 7000, Deflation next 6 months

Witnessing the entire gammet of failed Federal Reserve and U.S. Treasury policies now, the new policies of the next administration should be the opposite:

So, instead of lowering interest rates, maybe the new administration should raise interest rates? Instead of bailing-out Wall Street, why not let firms like AIG fail? Instead of letting the dollar go down to nothing, why not re-value the dollar and move toward a gold standard? Instead of de-regulating, why not re-regulate and jail the criminals who created this disaster? Instead of bailing-out failing companies like GM, Ford, and Chrysler, why not let uncompetitive and backward companies fail--- and good-bye to them? Instead of punishing savers, maybe embrace and reward savers. Instead of lowering taxes, raise taxes. Instead of waging endless wars and spending on defence, why not wage peace and slash spending? Instead of embarking on the delusion that deficits don't count, as the Bush Administration has with supply-side economics, why not run surpluses and cut federal spending? Instead of trickle-down economics, how about trickle-up economics--- to help the workers instead of CEOs?

This is the only way out of this mess: to do the opposite of what is being done now in Washington, and the sooner, the better. Although not every new approach may work, try these new approaches and see what works and what does not work.

right on Starving! You are spot on. This hair of the dog business is going to kill us.

[metalman]

Re: Roubini: New Deal, fire Paulson & Bernanke, Dow 7000, Deflation next 6 months

Is Roubini simply being too bearish? "I worry that it'll be worse than I expected," he says in the accompanying video, in which he predicts a slow, possibly L-shaped recovery a la Japan.

...

In the accompanying video, the NYU economics professor ticks off a number of suggestions for whoever wins the election:

Replace Treasury Secretary Hank Paulson and Fed Chairman Ben Bernanke. "We need a clean slate to restore confidence," he says, suggesting market participants have lost faith in current regulators.

Start a $300 billion government works program focused on repairing and expanding our infrastructure. Yes, a new New Deal.

Create a blanket guarantee for all bank deposits. Even with the FDIC raising its insurance limit to $250,000, there's still $2 trillion of uninsured assets in American banks and that money is moving overseas to places like Ireland, which have granted blanket guarantees.

Revise the $700 billion bailout plan (or TARP) so that it just doesn't buy toxic mortgage securities but directly helps recapitalize the banks.

....

In other words, the Dow is going to 7,000, but over the course of months vs. days if Roubini is right, as -- unfortunately for bulls -- he mostly has been for the past two years.

"The policy response is going to become more aggressive [but] a steady flow of bad financial and macro economic news is going to push down equity markets," he says, forecasting a real bottom won't be hit until "sometime next year."

Because of growing slack in the global economy, Roubini says deflation is going to become a much bigger threat in the next six months vs. inflation. In such an environment, cash, Treasuries and gold are the only safe bets he says -- provided your holdings are within the FDIC's new $250,000 insurance cap.

http://www.rgemonitor.com/blog/roubi...sion_is_rising

Did he change from U to L ?

roubini has been forecasting this for 10 years. whew! finally right.

msm loves roubini. haul him out like a circus ugly to show the crowd how beautiful the dancers are.

old news... except for the 'new deal' part... obviously... er... derivative.

[ltullos]

Re: Roubini: New Deal, fire Paulson & Bernanke, Dow 7000, Deflation next 6 months

....

This is the only way out of this mess: to do the opposite of what is being done now in Washington, and the sooner, the better. Although not every new approach may work, try these new approaches and see what works and what does not work.

God love ya,

- George Castanza - "Hi, I'm George. I'm unemployed and I live with my parents."

[chrisk]

Re: Roubini: New Deal, fire Paulson & Bernanke, Dow 7000, Deflation next 6 months

I'm thinking a G personally.

It will be a !-shaped trajectory (note the gap down to the final low, marking the shocking end point for all that has come before).

[cschx]

Re: Roubini: New Deal, fire Paulson & Bernanke, Dow 7000, Deflation next 6 months