Nouriel Roubini Blames the Fed

Nouriel Roubini is everywhere! You have to wonder if he's starting to make odd requests for his media appearances like asking for a bowl of M&Ms with one color removed.

Tuesday night, he was on the Nightly Business Report and was asked a very simple question, "Who or what is the major culprit of this financial crisis?" Here's his simple reply:

First of all the Fed kept interest rates too low for too long and created the housing bubble. Secondly the Fed and the other regulators were asleep at the wheel and allowed all these toxic mortgages to be created without controlling it. Three, there was plenty of greed and excessive risk taking on Wall Street. And four, the rating agencies had major conflicts of interest because they were being paid by those that were supposed to be rating. So the blame is to be shared by many different culprits.

It is quite clear there is plenty of blame to go around but, interestingly, the first two of the four culprits mentioned by the world's most in-demand economist were the Federal Reserve.

The entire transcript is available here.

The New York University economics professor and founder of RGE Monitor (how does he find time to teach these days?) was also on Bloomberg video predicting a very long and painful recession dead ahead.

Comments

[sickofthehype:]

Roubini is a guru because he predicted this mess, correct? I guess that means I am too, because I sold off my real estate and 90% of stocks by the end of 2007.

This article says zilch.

2008 Oct 30 10:11 AM

[This won't ...:]

Stop the criticism. If anyone listened to Doctor Doom, they are smiling right about now. He was right, nobody believed him and we shall see if he is correct on the next 30% downdraft....chuckle chuckle

2008 Oct 31 07:41 AM

[msgtb:]

He has been 100% correct why would you argue with him. And, yes the scope of the Federal Reserve should be downsized to the function of managing the dollar against other currencies. It is way out of its league and should not be doing what it is currently. Their intervention has only made the disaster larger in scale and length. Simply the Federal Reserve should not be setting policy in the United States of America. This is taxation without representation.

Good Luck Everyone

2008 Oct 31 10:35 AM

[carey_jim:]

When there is a crisis of any kind scapegoats are always identified and punished. The ritual is as old as mankind.

To propitiate the Gods, human beings have always sacrificed those who have profited the most from The Great Excess, who have had the most fun dancing around the Golden Calf or who have risen to the highest positions of power in the New Order of the Yahoo Knights.

The Rain Dance starts next year. If Obama wins the election, at least it will be fun to watch.

If McCain wins, let us hope that Sarah can dance.

2008 Oct 31 01:15 PM