Goldman Sachs and Dr. Roubini aka DR. DOOM!!!

Nouriel Roubini Professor of Economics and International Business, gain the name of "Dr. Doom" for his predictions for years that the US financial markets were going to collapse.

Well nobody really listened until the Bear Stearns collapsed, now he is predicting the collapse of Goldman Sachs, Morgan Stanley.

Will this happen?

Well in the event of this Banks to have a bank run they will collapse, because after converting from financial institutions to regular banks they have littler or no capital left.

Thus, the gambit of converting into banks while not being banks yet hasn't worked, and the run against them has accelerated in the last week: Morgan's CDS spread went through the roof on Friday to over 1200, and the firm has already lost over a third of its hedge-fund clients together with the highly profitable prime brokering business (this is really a kiss of death for Morgan). And the coming roll-off of the interbank lines to Morgan would seal its collapse. Even Goldman Sachs is under severe stress: Most of its lines of business (including trading) are now losing money.

Next: The Mother Of All Bank Runs?

www.forbes.com...

Bank Run Could Finish Goldman Sachs, Morgan Stanley

www.economyincrisis.org...

reply to post by marg6043



the Doctors forecast would have happened like he says...
except that the Fed/Treas yesterday changed the rules of the game...
Goldman has been 'infused' with $25bn of Treasury money
-And-
Goldman together with another 8 banks have been guaranteed loans and guaranteed backing/funding for all their operations for the next 3-5 years.


Goldman and the rest of these 7 or 9 'primary dealers', have 'immunity' from failure per the 5 year program, with Uncle Sams deep-pockets.


~ its my view that Goldman nor any of the banks will ever be able to buy out the governments Perferred shares or the Warrents that will be issued against the participating banks market capitalization.
Goldman, imho, will get folded into the Fed/Treasury & the workers will become 'GS' wage earners... IOW, a nationalized bank ~


thanks,

St udio

in the treasury's bank investment/deal terms apparently try to get banks to lend to customers (and the gov't in turn insures these loans -WTF?)

we will soon need to bailout the bailout. Because defaults will be increasing on loans. With the personal debt and jobs situation there may be a lack of supply of qualified borrowers IF the banks decide to lend.

Do you think the bank's will increase there lending "much" or do something else with most of it?

I have been following Roubini since 2005 and as far as I'm concerned he is the only one out there who has been BANG on the money every step of the way.

Close on his heels for accuracy is Meredith Whitney.

JK