Nouriel Roubini: The Financial Times recently interviewed economist Nouriel Roubini regarding the current US housing market problem and the potential for an extended US recession. Roubini addresses the outlook of the US economy, mortgages, potential policy action—The Frank-Dodd bill, Fed policy, and the outlook of financial markets.
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The curious case of Henrietta Hughes shows American attitudes towards social assistance. ++ Before, she was unemployed and homeless, living in a small car with her adult son. ++ Now, she lives in a spare home of a Republican representative and has a job. ++ Her life changed in front of Obama, and the TV-cameras. ++ This shows “Yes, we can”-attitude, but also miserable American social support,
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The poor should not be beggared to bail out speculators. ++ Housing, health care and education are so expensive they are creating misery comparable to the ills of imperialism, feudalism and bureaucratic capitalism that once afflicted China. ++ Officials calling on “everyone to spend a year’s income” and call it “patriotic consumption” are echoes of Marie Antoinette. ++ Consumption is not
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The current financial crisis demands strong governmental actions, particularly in the US. ++ The US’s financial problems can be explained through the debt crisis, credit crunch, and housing bubble which lead to a consumer binge. ++ The government should help homeowners stay in their homes and engage in effective rescues when necessary. ++ This downturn is only made worse by the current US
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The current housing mortgage crisis points to a general problem in finances. ++ Financial authorities and institutions are guided by market fundamentalism. ++ Their success has reinforced the misconception that markets are self-correcting, but current events show regulation is necessary. ++ To establish a clearing house or cutting foreclosures should be a priority. ++ Government intervention is
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The differences in transatlantic mortgage systems are causing the Fed and the ECB to deal with housing crisis in contrasting ways. ++ While the Fed keeps cutting interest rates to make up for the huge losses in capital of US banks, the EU is focusing on inflation control. ++ The Fed’s mandate is to guarantee financial and monetary stability - a commitment which may eventually require the
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The newest tale of woe among American investment banks is the housing market, according to The Economist. Some analysts on Wall Street predict that the housing bubble is on the verge of collapse, and point to the “subprime mortgage market” as the culprit. These loans, given to potential homeowners with poor credit at little or no money down, provide initial low “teaser” interest rates, which
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