Tags: Roubini US Banks at Risk of Insolvency

Roubini Tweets: US Banks at Risk of Insolvency

Tuesday, 09 Nov 2010 01:28 PM

Nouriel Roubini, the star economist whose gloomy forecasts have earned him the nickname of Dr. Doom, is at it again.

This time he has taken to Twitter to predict pain. The New York University professor was reacting to a report by Laurie Goodman, senior managing director at Amherst Securities, who says one in five distressed homeowners in the U.S. faces, or may face, foreclosure, Housing Wire reports.

She says 11.5 million home loans are non-performing or highly distressed at present.

And Roubini says that spells trouble. “Amherst Securities Goodman estimates that 11.5 million households could default on their mortgages, not the 4 million priced in by markets,” he tweets.

“If 11.5 million more households default on their mortgages, most U.S. banks would be insolvent again. That's why Goodman's estimates are scary.”

Last week, Roubini used Twitter to forecast failure for the Federal Reserve’s latest easing effort. “QE2 will be followed by QE3 and QE4, as QE2 will fail to revive the real economy and to prevent deflationary pressures,” he tweeted.

Roubini isn’t the only one worried about the home market. “We face a huge problem in housing,” Mortimer Zuckerman, chief executive officer of Boston Properties, tells Bloomberg. Prices are still going down, and about 11 million mortgages under water, he points out.

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Nouriel Roubini, the star economist whose gloomy forecasts have earned him the nickname of Dr. Doom, is at it again. This time he has taken to Twitter to predict pain. The New York University professor was reacting to a report by Laurie Goodman, senior managing director at...
Roubini US Banks at Risk of Insolvency
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2010-28-09
Tuesday, 09 Nov 2010 01:28 PM
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