Nouriel Roubini: U.S. and global equities could drop by another 15 to 20 %

Professor Nouriel Roubini, who predicted the global financial crisis, said in an interview with Bloomberg television on December 12, shares worldwide may fall further. “I’m still quite bearish on U.S. and global equities, they’ve fallen a lot, but they might surprise on the downside. U.S. and global equities could be 15 to 20 percent lower before they start to recover towards the end of next year,” he said.


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Sources :

Bloomberg: Roubini Says U.S., Global Stocks May Drop 20% Before Recovering, December 12, 2008 11:12 EST

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Meredith Whitney’s scary predictions

The following are the gist of the Oppenheimer & Co. analyst, Meredith Whitney, predictions via Fortune:

1. What the federal government has done so far- with TARP, bailing out Citigroup, etc. - has stemmed the bleeding, but what it hasn't done is fundamentally alter the landscape. Yes, there's been a tremendous amount of capital has been thrown into the system, is just going to plug the holes. It's not going to create new liquidity, which is what the system so desperately needs.
   
   
2. After we have seen TARP 1.0, TARP 2.0, and TARP 3.0, Meredith believed we will also see a 4.0, a 5.0, and so on. There has to be, because the companies cannot raise the capital they need, which means that the default provider of capital has to be the federal government. The strategy changes have not solved anything.
   
   
3. Meredith expected all these banks to be back in the market looking for more capital. She said there will be banks getting smaller, banks going away, and banks consolidating. At the same time, though, she thought we'll see more new banks created. She has already seen more applications. And it's a great idea: We start with a clean balance sheet and make loans today with today's information. Plus, right now we've got a yield curve that's good for lending.
   
   
4. The overall economy will be worse than people expect. The biggest issue will be consumer spending. If 2008 was characterized by the market impacting the economy, then 2009 will be about the economy impacting the market. It's already started.

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Sources :

Fortune via CNN Money: 8 really, really scary predictions, December 11 2008: 7:04 PM ET

Please Note!

This is generally never true. Before buying or selling any asset you should do your own research and reach your own conclusion. See my Disclaimer on the bottom for more information.

You are welcome to republish this article, or any portion thereof.
Please, cite the actual/original source. I would be grateful if you could link back.