Website review: RGE Monitor
laodan discovered this in Economics
•1 reviews since Nov 16, 2007
economics
•rgemonitor.com/blog/roubini/227330
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laodan discovered 6 months ago- Rising Risk of a Systemic Financial Meltdown in RGE by Nouriel Roubini
I now see the risk of a severe and worsening liquidity and credit crunch leading to a generalized meltdown of the financial system of a severity and magnitude like we have never observed before. Goldman Sachs is writing today on the risk o a contraction of credit of the staggering order of $2 trillion dollars in the next few years causing a severe credit crunch and a serious recession. ... Hopefully by now some folks at the New York Fed and at the Fed Board are starting to think about this most dangerous systemic financial crisis that could emerge in the next year and what to do to prepare for it. Rising Risk of a Systemic Financial Meltdown Goldman Sees Subprime Cutting $2 Trillion in Lending in America's vulnerable economy What to add to the extremely strong words of Nouriel Roubini? We are slipping back to the economic fundamentals that have been lost on most of us blinded as we were by financial modeling and mathematics. Financial engineers and quants were out to create our future societal reality. At least that's what they were thinking they were doing. In that dream the production of real goods was considered an activity with only marginal returns and thus not worth preserving. So today we are awakening in a situation where the production of commodities is no longer available in the West while its entire service economy is crashing. What does that imply for our daily lives? - increasing food prices - increasing commodity prices - decreasing personal incomes - decreasing personal assets (homes, paper, ...) Simultaneously in the countries that did not prepare for after-fossil fuels the prices of energy will be crashing the economies further down. Those economic changes will not happen in a political vacuum. We'll assist at the strengthening of the centers of power from where will emerge a post-modern worldview that will help glue us all behind new social and political forms of societal life. Gardening and local exchanges are decidedly in the air of our times while grand theories are on the way out.
- Rising Risk of a Systemic Financial Meltdown in RGE by Nouriel Roubini
