Skip to search.

Roubini: Bear Market Only Half Over, But It's Not Armageddon

Posted Jul 22, 2008 11:40am EDT by Aaron Task in Investing, Newsmakers, Recession, Banking
Related: ^DJI, ^SPX, ^IXIC, SPY, DIA, XLF

One of the most noted skeptics on Wall Street, NYU Professor Nouriel Roubini says the financial system is in "the worst crisis since the Great Depression," and that the bear market in stocks is only half over.

Subprime mortgages are only the tip of the bad-loan iceberg, says Roubini, who expects the "subprime financial system" to ultimately suffer credit-related losses of between $1 trillion and $2 trillion vs. the approximately $330 billion thus far.

Roubini believes the economy slid into recession in the first quarter of 2008 and will remain there until the second quarter of 2009, with "subpar growth" likely to characterize the recovery.

That's the (very) bad news.

The good news is Roubini, who also chairs research firm RGE Monitor, is "not in the Armageddon camp."

The economist sees a "severe recession" that will last 12-to-18 months, but does not foresee the U.S. sliding into a prolonged Japan-like economic malaise. Similarly, while further 20% declines for major averages isn't pretty, it won't be as bad as the bursting of the tech bubble or the Great Depression for stocks, which Roubini sees starting to recover later this year/early next year.

Go to Tech Ticker

There are no comments yet

Post a comment

Sign in to post a comment, or Sign up for a free account.
Quotes delayed, except where indicated otherwise. Delay times are 15 mins for NASDAQ, NYSE and Amex. See also delay times for other exchanges.

Quotes and other information supplied by independent providers identified on the Yahoo! Finance partner page. Quotes are updated automatically, but will be turned off after 25 minutes of inactivity. Quotes are delayed at least 15 minutes for NASDAQ, NYSE and Amex. See also delay times for other exchanges. Real-Time continuous streaming quotes are available through our premium service. You may turn streaming quotes on or off. Fundamental company data provided by Capital IQ. Financials data provided by Edgar Online. Historical chart data and daily updates provided by Commodity Systems, Inc. (CSI). International historical chart data, daily updates, fund summary, fund performance, dividend data and Morningstar Index data provided by Morningstar, Inc. Analyst estimates data provided by Thomson Financial Network. All data provided by Thomson Financial Network is based solely upon research information provided by third party analysts. Yahoo! has not reviewed, and in no way endorses the validity of such data. Yahoo! and ThomsonFN shall not be liable for any actions taken in reliance thereon. All information provided "as is" for informational purposes only, not intended for trading purposes or advice. Neither Yahoo! nor any of independent providers is liable for any informational errors, incompleteness, or delays, or for any actions taken in reliance on information contained herein. By accessing the Yahoo! site, you agree not to redistribute the information found therein.