Roubini On 2013's "Global Perfect Storm" And Greedy Bankers "Hanging In The Streets"

Tyler Durden's picture

In an extended interview with Bloomberg TV, Nouriel Roubini lives up to his doom-saying reputation and goes where few have as he opines on Lieborgate that: "bankers are greedy and have been for 1000 years" and "nothing is going to change" unless there are criminal sanctions; to which he follows up - briefly silencing the interviewer, "If some people end up in jail, maybe that will teach a lesson to somebody - or somebody will hang in the streets". The professor goes on to note that the EU "summit was a failure" since markets were expecting much more and warns that without full debt mutualization, debt monetization by the ECB, or a quadrupling of the EFSF/ESM 'bazooka'; Italian and Spanish spreads will continue to blow out day after day - leading to a crisis "not in six months but in two weeks". The only entity capable of stopping this is the ECB which needs to do outright unsterilized monetization in unlimited amounts which is 'politically incorrect' to talk about and claimed to be constitutionally illegal. 2013 will be a very difficult year to find shelter as policy-makers ability to kick-the-can runs out of steam as he sees the possibility of a 'Global Perfect Storm' of a euro-zone collapse, a US double-dip, a China & EM hard-landing, and a war in the Middle East. Dr. Doom is back.

Must watch 9 minutes of reality:

On Lieborgate:

Nothing has changed since the financial crisis. The incentives of the banks is to cheat - doing things that are either illegal or immoral. The only way to avoid that is to break up these financial supermarkets. There are no chinese walls and massive conflicts of interest.

On Greed:

Bankers are greedy - they have been for 1000 years.

On Sanctions:

There should be criminal sanctions. Noone has gone to jail since the global financial crisis. The banks do things that are illegal and at best they get a slapped with a fine. If some people end up in jail, maybe that will teach a lesson to somebody - or somebody will hang in the streets.

On TBTF banks:

There are more conflicts of interest today than four years ago. The banks that were too big to fail and now they are even bigger. Things are worse - not better.

On The EU Summit:

The summit was a failure. The markets were expecting much more.

Either you have debt mutualization (to reduce the spread), or you have debt monetization by the ECB, or the bazooka of the EFSF/ESM has to be quadrupled - otherwise the spreads on Italy and Spain are going to blow up day after day. Otherwise you will have another bigger crisis not in six months from now but in the next two weeks.

On The ECB saving the world:

The only entity capable of stopping this is the ECB which needs to do outright unsterilized monetization in unlimited amounts which is 'politically incorrect' to talk about and claimed to be constutionally illegal.

On Debt mutualization:

It is not just Germany that is resistant but other core nations including The Netherlands, Austria, and Finland. Finland doesn't even want to accept the recent indirect mutualization of the summit liabilities (of the EFSF/ESM).

On kicking the can:

By 2013, the ability of policy makers to kick the can down the road is going to run out of steam, and in the euro zone the slow motion train wreck will become a fast motion train wreck. The US seems close to stall-speed and an economic recession. The landing of China is becoming harder and EM nations (and BRICs) are sharply slowing down. And finally the potential for war between Israel, the US, and Iran - which will double oil prices overnight.

On 2013 being worse than 2008:

Worse because like 2008 you will have an economic and financial crisis but unlike 2008, you are running out of policy bullets. In 2008, you could cut rates; do QE1, QE2; you could do fiscal stimulus; you could backstop/ringfence/guarantee banks and everybody else. Today, more QEs are becoming less and less effective because the problems are of solvency not liquidity. Fiscal deficits are already so large and you cannot bail out the banks because 1) there is a political opposition to it; and 2) governments are near-insolvent - they cannot bailout themselves let alone their banks. The problem is that we are running out of policy rabbits to pull out of the hat!

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
TheFourthStooge-ing's picture

Indeedings this muchly of being it, which parangongically cannot be denialated.

akak's picture

Your wording of the mind and throating of ideas are indeed iron-cladded and firmly.

Unprepared's picture

For better or worse, it's through his blog, fresh from university, that I was first exposed to the extent of economic hazards ahead and learning how dismal modern economics were. There were some bright minds on his blog.

economics9698's picture

I was really pissed at my university when I had no fucking clue what a monetary bubble was and why they occur. Its not some idle academic pursuit, it fucking cost me a lot of fucking money. I do not know how these assholes can teach their students complete bull shit propaganda and sleep at night. When I teach the subject I tell my students what is bullshit, Keynes, Freidman, and what is real.

Go to FRED, Federal Reserve, and read their shit and study the graphs on everything related to money.  You will get a feel for the monetary game and just how bad it is now.

Monetary bubbles take 3 to 5 years to develop, we are at year 3 and 8 months, fasten your seat belt. 

Cognitive Dissonance's picture

"I swear, my mother, aged 75 years, knows more about economics than most."

Sounds like your mother is cursed with a severe case of morals and ethics. Too bad she only has street smarts to carry her forward from here because the really smart ones have Wall Street to carry the day.

Maybe she should look into getting a PhD. It's never too late you know. Tell her to put the whole thing on her student loan tab while she's learning why Gold is nothing more than a barbarous relic. :>)


Martial's picture

Yea I think he and the Bernank are "buddies".


I agree with the last paragraph though.


Endgame approaches.

world_debt_slave's picture

yeah, Roubini is right about the bankers , the corrupt system and no punishment. But he went off the rails about the CB's monetizing the debt.

thad78's picture

Is there any other solution that can be implemented within 5 years other than global meltdown? I"d seriously like to hear it.I guess i'm a sheeple- I'd rather flow than blow (even if flowing with it makes me sick).

Paul Atreides's picture

Criminal charges and arrests followed by the re-instatement of law in the financial sector is the first and most important step. The next step would be some sort of debt Jubilee and then a migration to the system I outline below:

Each sovereign nation needs to create and issue it's own debt free, central banking free, 0% interest money for federal, provincial/state and municipal spending purposes. This credit based money would then replace the compounded interest bearing debts of the money supplied by the worlds central banks over a 5 year timeframe. Seriously fuck the central banks we are the people and we want them eliminated. This sovereign nations money would be good for all trade and payable towards taxes. Fractional reserve banking as well as government debt through the issuance of bonds and usury would be reduced and made illegal during this 5 year period to put an end to slavery once and for all. All required loans, mortgages, and credit issuance would no longer be issued under the fractional reserve private banks but by the peoples bank under strict lender practices with non compounded one time interest rates set at a non profit level to cover the losses on bankruptcies, foreclosures or loan losses. Corporate bonds and non public bonds would be still legal under this system as corporations are not people. The peoples bank would be not for profit and would be the primary center for the issuance of credit by the people and for the people and any money it makes would be put towards the people of that nation. This peoples bank would not interfere with the market or the economy other then setting the prime interest rates, the issuance of credit and printing and storing of both digital and phsycial currencies. Ideally this system would be backed by gold and silver as well as both metals being legal tender for the settlement of trade.

This system has worked in the past (Abe Lincolns Greenbacks, and the Bank of Canada Government lending prior to 1974 to name a few) and will work again the only problem is we would have to remove the central banking cartel by force if necessary, they and the elite that run them will not want to relinqush control of the worlds financial system or go quietly into the night.

P.S. if you are going to junk me please tell me why or provide constructive feedback, this isn't just some random 'I can dream post'. I am working with a number of groups on fine tuning this solution.

Bolweevil's picture

Sure looks like an I can dream post. 

+1 for Patrick Swayze RIP avatar.

world_debt_slave's picture

imho, I believe the guillotine would grab their attention with some banksters heads rolling.

Ned Zeppelin's picture

I've reached similar conclusions. Who needs as an intermediary a central bank in the creation of new currency? Because they restrain themselves and prevent excess? 

Didn't think so either.  

pvzh's picture

Creating money through credit expansion is FRAUD. Who benefit from the fraud does not matter. There is no need to nationalize private fraud, just abolish it. That is all.

Gold is money. It should circulate as physical coins or claim cheques (paper or electronic). Issuing claim chueque for the coin that does not exist is FRAUD and should be punished accordingly: same as money counterfeiting now.

People may use whatever they wish as transaction medium gold, silver, sea shells, Goldman Sacks CDO, whatever... The only requirement should be NO FRAUD (one thing must not pose as another): if you accept promises of Goldman Sacks to pay you in gold, you do so at your own risk. NO LENDER OF LAST RESORT.

Re: DEBTS. Money should be paid as agreed in contract. The money created through fractional reserve lending must be repaid to be retired from circulation (as agreed: that is the only difference between fractional reserve lending and money counterfeiting -- lender promises to retire excess of money upon payment of debt; thus, failure to do so make un-retired amount undoubtly fraudulent, i.e. counterfeit). Failure to repay the debt by borrower and by the call on capital of a lender (after both methods has been employed) should be treated as an issue of counterfeited money. That amount should be split between borrower and lender, and both should do jail time accordingly (there are current statutes for counterfeiting). Since banks are corporations, their shareholders must be kept responsible in terms of capital and criminal responsibility (shareholders can shift some responsibility to employees where applicable).

Obviously, nothing like that is going to happend, but the closer we approach to that ideal the better we will be.

FrankDrakman's picture

and the Bank of Canada Government lending prior to 1974


OK, I'm a Canadian, and I'll bite: exactly how did the BofC change in 1974? I was just a teenager at the time but I was fairly politically aware, and I don't recall any news about this. Put up (with reference links, please), or shut up.

James's picture

Look into State Bank of N.D. for Nirvana in their approach.

They are actually the last remnant of what was once the norm.



bankruptcylawyer's picture

you want constructive feedback.....

i'll give you some. the 'people's' bank this and that. look at the comunist party of china. they have a people's bank. 

you and all the other occupy wall street morons who think you know everything are ignorant of history and basic human incentives. 

your 'dream' is that all the 'people' are good and will work in the way you want them to. that centralized decision making 'can be perfect'. 

you start off on the right foot by thinking you must destroy the old-life draining system that is the fed. where you go wrong is in thinking that delivering the centralized money creation process to a central commizdat will result in substantial better decision making. 

THERE IS A GOOD REASON PRIVATE BANKING HAS SURVIVED IN SOCIETY. it is not because of cabals and conspiracy theories. it is because capital has a need to move freely in society. Crony capitalism and Communist Capitalism are both forms of highly centralized restrictive capital controls both described by a specific set of social connections that define who is IN the club and who isn't. 

you want a dream----dream of  a world with mom and pop bankers who have under 20 million in deposits and where the money supply is backed by something other than the promise to print more money-----and yes, you can implement this sort of 'system' along side a jubilee, and along side a genuine regulatory system that prevents the implementation of national private credit systems hijacking the treasury and the private credit systems once more. 


sorry for the ad-hominem attack on you as an 'occupier', but i've talked to you guys SO many days in liberty park, i've lived with a number of you guys. and the truth is , you're mostly a bunch of communist idiots who only have some semblance of what is going on and what appropriate solutions might be. there are so many 20 something year old people who speak of the people's this and that, and its tiring , because occupy has been fully co-opted at this point, and resembles little more than a failed solidarity movement. rest assured, the only thing driving occupy forward is increasing rates of poverty in the u.s. 

there will be no communist revolution. 




Seer's picture

There are NO "solutions!"  Not for systems that are growth oriented only.  This is a finite planet.  This "meltdown" is ALL about a shortage of resources for continued application of the status quo.  I believe that everything has been an attempt to hide this very REAL fact, for as it comes to light there will be NOTHING to stop the collapse of what has been a practice of MASSIVE unsustainability.  Drawing from the future, whether it is or isn't a "good" application of "capital" is unsustainable.  Therefore, no, there will be no "flow."

Your options are:

A) Find a tall building and jump;

B) Discover how the overwhelming majority of humans have lived- close to sustainability (some would call this "poverty").

We stand today at a crossroads: One path leads to despair and utter hopelessness. The other leads to total extinction. Let us hope we have the wisdom to make the right choice. - Woody Allen

I highly recommend getting a jump on option "B."  I'm already digging in the dirt... (well, trying to reclaim land for raising livestock [the "Food" component of "Food, Shelter, and Water")

AnAnonymous's picture

US citizens know of that.

And their option is: who else to push under the train so they can buy themselves one more day.

akak's picture

Or perhaps they merely need to abort more female children, Chinese Citizenism style?

Have you had your human fetus soup today?  Umm umm good!


AnAnonymous's picture

Abortion? But US citizens are doing fine on the abortion side.

Ah, yes, I forgot, abortion vast programs hit negroes in the US so who cares?

They should not be accounted for.

So yeah, no abortion programs in US citizen nations, especially in the US.

No abortion of human beings at least. And this is what matters for US citizen eugenics programs.

TheFourthStooge-ing's picture

AnAnonymous revealed himself when he said:

Ah, yes, I forgot, abortion vast programs hit negroes in the US so who cares?

Your racism is so contemptibly pathetic that it's almost amusing.

AnAnonymous's picture

Yeah, yeah, I know, I know, just like Abraham Lincoln, the Abraham Lincoln brigade, 'Americans', 'Americans' are a product of my imagination, negroes aborted in the US is also a figment of my imagination.

It cant be real and it has to show my racism in a funny way.

More illustration on the incapacityof US citizens to cope with reality without mediation of fantasy.

TheFourthStooge-ing's picture

More illustration on the incapacity of US citizen AnAnonymous to cope with reality without mediation of fantasy.

AnAnonymous's picture

Sure. I am the one claiming that Abraham Lincoln, the Abraham Lincoln brigade, 'Americans', 'Americanism' do not exist.

I am the one unable to cope with obvious facts.

Sure, sure...

akak's picture


I am the one unable to cope with obvious facts.

Good, good!  Much double lucky golden panda good!

Your rare and unequivocal admission of truth here may just possibly mean that there is some infinitesimally small hope for you yet.

AnAnonymous's picture

Quoting out of context is cheap.

Ummm, wait, maybe not that cheap by US citizen standards.

This has to be understood: reality is quite harsh on US citizens and they have to use cheap shots.

The law of necessity...

akak's picture


Quoting out of context is cheap.

Shitting on side of Chinese road like pre-roasted dog is much cheaper (and much stinkier).

AnAnonymous's picture

Ah, yes, it might mean that in some other places, they charge you for shitting on the road...

US citizen places?

akak's picture

Only in Chinese Citizenismland, where stinking piles of roadside human turds are eternal.

TheFourthStooge-ing's picture

...and the public parks.

Don't forget the Chinese citizenism rule number two regarding the making number two:

TheFourthStooge-ing's picture

akak said:

Or perhaps they merely need to abort more female children, Chinese Citizenism style?

Have you had your human fetus soup today?  Umm umm good!

Chinese citizenism lunch delicacy of pickled female fetus feet are to die for.

So tiny, so tasty, especially with plum sauce.

AnAnonymous's picture

Wait for US citizen to mass produce that delicacy, they are going to feed the world, US citizen style.

TheFourthStooge-ing's picture

AnAnonymous, with more rodent-like scurrying, said:

Wait for US citizen to mass produce that delicacy, they are going to feed the world, US citizen style.

Made me laugh. You will produce it for your US citizenism Abraham Lincoln brigade as you lead it hurriedly away from battle.

Afterwards, you will sell it to Chinese citizenism restaurants, calling it General Toe's Chicken.

AnAnonymous's picture

Hurrying away from battle? Where does it come from?

Another fantasy development to come up.

Rasna's picture

If some people end up in jail, maybe that will teach a lesson to somebody - or somebody will hang in the streets

We don't get out of this shit hole of a banking/financial system until a lot of people go to jail and trust is restored.  The retail investors know that the system is corrupt to it's core and rigged.  The commercials have figured out how to game the system with their algos.  I'm not sure what the pension funds and insurance companies are doing, but with their fiduciary responsibilities, I don't know why they aren't leanning harder on O, Holder/Justice and Congress to get this mess cleaned up ... The problem is that the congress, presidency and courts are owned by the banks and their sociopathic minions.

This all came to a head in 08 with Paulson running around Congress telling them that Marshal Law was days away if they didn't approve the one page, $700B TARP plan that he pulled out of his A$$ in less than the time it took him to scribble it out in crayon - "Giv us mor mony or th world wil end tomoro".

analyzer_66's picture

Holder ? Congress & Justice ?  Seriously ??

Holder is a criminal, he lied about the guns going to Mexico.  Justice & Congress, forget them too, dont forget congress is making money on passing laws that affect stocks in a way that is favorable to their portfolios.  Imagine standing below a dam that is about to burst and you are being handed a toolbox with a screwdriver and a roll of duct tape to repair the whole dam.  That's where we are at with the financial system and the rule of law used to police it. Let it burn along with all the lawyers, brokers, bankers and insurance people that support the present system.

Debt-Is-Not-Money's picture

I wanted to up-arrow you but when a post leads off in italics the arrows are disabled.

Perhaps an edit will work?

pvzh's picture

Comments cannot be edited after at least one reply has been added.

Seer's picture

"We don't get out of this shit hole of a banking/financial system until a lot of people go to jail and trust is restored."

They're nothing but a symptom of the disease!  You could blast them all out in to space and we'd still be sitting here on this finite planet with an ENTIRE system based on perpetual growth.

It was all an orgy before the predestined collapse.  Yeah, perhaps these hyenas sped it all up, but the gas pedal was always there (and there was never any brakes).  The "shit hole" is all we know... (and, for what it's worth- welcome to what the majority of humans have been suffering at the hands of this grow-or-die system)

Stuart's picture

exactly!   What does he think will happen to gold if the central banks fully commit the amount he cites in an unsterilized debt monetization program.   Thing is, directionally I think his general thrust is fairly accurate. 

DavosSherman's picture

He also has sculptured twats on his walls.

AmCockerSpaniel's picture

The fact is; I don't know what to do, or when to do it. So holding gold here helps me sleep better. The next best thing to not knowing as much as the rest, is to know you do not know.

OmNamah's picture

Does this guy introspects on the calls he has given on markets...or for that matter any1 out of the popular media....this guy is absolutely worthless....Zerohedge atleast  is consistently wrong on some assets thus making it easy to trade...this guy is plain confusing...

TrainWreck1's picture

Lengthy trials and profitable appeals are impossible if people are strung up.

The legal system(s) must remain insulated from unemployment.


Dermasolarapaterraphatrima's picture

I hope for my brother's sake the trials are long and Bruder is a starving criminal lawyer. He went into crim law thinking there would be lots of prosecutions in these years.....Poor soul is still an idealist.

Whiner's picture

QE to da' moon. Then ropes and pitchforks with hound dogs and lighted torches.

dick cheneys ghost's picture

2013?.........I was told 2012............Im tired of waiting.........burn the mother down.........lets start over, you know, for the kids.......

Peter Pan's picture

You are right Dick Cheneys Ghost. The most nauseating aspect of this whole crisis is how we are trying to avoid judgment day by kicking ithe can down the road in the hope that our kids will bend over to pick it up.

This is a violation of parenthood and we deserve to be liquidated upon reaching 65 as we deserve nothing for the untold damage our generation has caused as a result of unsustainable borrowing, unsustainable consumption and unsustainable expectations.