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US Economy Facing 'Death by a Thousand Cuts': Roubini

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jakeXT Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Sep-16-09 01:59 PM
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US Economy Facing 'Death by a Thousand Cuts': Roubini

Repeating his prediction that the economy faces a threat of a "double-dip" recession and at best a slow-growth U-shaped recovery, Roubini said in a live interview that more banks will fail and residential real estate prices have more room to decline.

Additionally, non-government bonds will face pressure, the securitization market is all but dead, the credit markets are still frozen and consumers will continue to save more rather than spend and boost growth.

"It's going to be death by a thousand cuts," said Roubini, chairman of RGE Monitor and economics professor at New York University's Stern School of Business. "The financial system is severely damaged, and it's not just the banks."

Roubini predicted more than 1,000 financial institutions could fail before all is said and done.

At the same time, he said housing prices are likely to fall another 12 percent in the next year—40 percent overall since the market began its steep decline—and about half of all homeowners will owe more on their mortgages than their houses are worth.

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http://www.cnbc.com/id/32837255
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