Roubini Takes 12

Friday I went over Roubini's 12 steps to financial meltdown that he predicted in February. Roubini himself revisits those 12 steps today.

Last February – well before the collapse of Bear Stearns - I wrote a paper “The Risk of a Systemic Financial Meltdown: The 12 Steps to Financial Disaster” where I outlined how the U.S financial crisis would become more severe and virulent and eventually lead to a systemic financial meltdown and a severe recession.

It is now worthwhile revisiting these 12 steps of the financial meltdown as the events of the last few weeks and months have confirmed – literally step by step - the 12 steps that I then argued would lead us to the current economic and financial near-meltdown. I thus provide below a summary version of this paper where each of the 12 steps of this financial meltdown is reported in summary as written in the original paper.

Steps 9 through 12 are presented in their full – not summary – original version as they are the crucial final steps of this financial disaster scenario and they closely match the rapid escalation of the severe strains experienced by financial markets in the last two months. You can compare for yourself how the 12 steps outlined in that February paper match with the actual evolution of financial markets and the real economy in the eight months since that paper was written.

Again, very much worth a read. It is frightening how prescient he has been on this situation.

[UPDATE]Videos of Roubini this morning on today's rate cut.




Dow 7,000 very possible by next year, he says. Hell at this rate it may be next WEEK.