Crisis on Wall Street: Roubini Predicts Another 20 Percent Stock Drop, Sale of Goldman, Morgan

[RedEarth]

Source: yahoo

Posted Sep 15, 2008 09:35am EDT by Aaron Task in Investing, Recession, Banking
Related: LEH, MER, AIG, GS, MS, WM, XLF
After failing to find a buyer this weekend, Lehman Brothers filed for the largest bankruptcy in U.S. history while Merrill Lynch agreed to be acquired by Bank of America for $50 billion. Such extraordinary events set the stage for a wild Monday on Wall Street, and most likely beyond.

These incredible, once unthinkable developments have caught a lot of people off guard, but not Nouriel Roubini, of NYU's Stern School and RGE Monitor, whose alarming predictions about the housing market and finanical system have been coming to pass with alarming frequqency.

This morning, Roubini forecast another 20% drop in stock prices, and reiterated a prior view that there will be no major independent broker/dealers standing before this crisis ends. In other words, Goldman Sachs and Morgan Stanley should be seeking suitors today, or face a similar fate as Lehman later.

Roubini and NY Post Wall Street reporter Mark DeCambre joined Henry and me this morning to discuss this weekend's dramatic events. The accompanying video focuses on the big question of "What's Next?" Stay tuned for subsequent segments where we will drill down on related issues, including:



Read more: http://finance.yahoo.com/tech-ticker/article/56654/Crisis-on-Wall-Street%3A-Roubini-Predicts-Another-20-Percent-Stock-Drop%2C-Sale-of-Goldman%2C-Morgan

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video of interview at the link

[clixtox]

1. All of this talk about "foreclosures"...

it must be contagious.

All of the "Investment Banks" and probably many of the "Commercial Banks" are now as "upside down" as a new car buyer is with a 100% auto loan when they drive away from the dealership!

Or same as the many recent home-buyers have been while walking/running away from their mortgage obligations.

They all owe more than their assets are worth today and it will be that way for a long time, if they ever again have the intrinsic value, especially the derivatives they bundled and sold to each other and hapless investors.

[defendandprotect]

2. Capitalism isn't about competition ...it's about killing the competition ...

as we move closer to "one-owner" world . . .

[Scooter24]

3. I think GS will be the only player left after this is over.

As their position is still generating revenue and profits, though much lower than what they have been drawing in the past.

I think what we'll have in a few years is several super-conglomerate banks with investment divisions and Goldman as the only stand-alone provider for investment banking.

[bluesmail]

6. Agreed. One Bank. One Corporation. New World Order.

[Ex Lurker]

4. Roubini has been predicting calamity for years...

and so far every one of his forecasts has come true.

[Pale Blue Dot]

5. Yep. And he was ignored.

:grr: