Nouriel Roubini, the star economist whose gloomy forecasts have earned him the nickname of Dr. Doom, is at it again.
This time he has taken to Twitter to predict pain. The New York University professor was reacting to a report by Laurie Goodman, senior managing director at Amherst Securities, who says one in five distressed homeowners in the U.S. faces, or may face, foreclosure, Housing Wire reports.
She says 11.5 million home loans are non-performing or highly distressed at present.
And Roubini says that spells trouble. “Amherst Securities Goodman estimates that 11.5 million households could default on their mortgages, not the 4 million priced in by markets,” he tweets.
“If 11.5 million more households default on their mortgages, most U.S. banks would be insolvent again. That's why Goodman's estimates are scary.”
Wednesday, November 10, 2010
Roubini Tweets: US Banks at Risk of Insolvency