2008 versus 2009 Predictions

I read a good article over on Infectious Greed that highlighted 2008-2009 predictions from several characters.

Here is a taste:

THEN: Nouriel Roubini, a New York University economics professor, predicted a flood of credit defaults and a prolonged bear market. "The debate," he said, "is not whether we're going to have a soft landing or a hard landing. The question is only how hard the hard landing will be."

NOW: Roubini said at a conference last week: "I've found that credit losses could peak at a level of $3.6 trillion for U.S. institutions, half of them by banks and broker dealers. If that's true, it means the U.S. banking system is effectively insolvent, because it starts with a capital of $1.4 trillion. This is a systemic banking crisis."

"The problems of Citi, Bank of America and others suggest the system is bankrupt. In Europe, it's the same thing."

He also said commodities prices could fall "over all another 15 to 20 percent. This outlook for commodity prices is beneficial for oil importers. It's going to imply that economic recovery might occur faster, but from the point of view of oil exporters, this will be very negative."

THEN: John Snow, chairman of Cerberus Capital Management and a former secretary of the U.S. Treasury under President George W. Bush, said that if the United States slipped into recession, it would be "short and shallow."

"That's been the pattern of recessions in the U.S., and there's a reason for it," he said. "There is an inherent resilience in the U.S. economy. We're already seeing an adjustment."

NOW: Snow, asked for his views last week, declined to comment.

Schaden-Davos-freude: 2008 vs 2009 Predictions

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