Making Sense of the Madness

One of the most interesting articles in this magazine is “MAKING SENSE OF THE MADNESS” which is about the opinion of theoretician about the financial panic of 2008 and what if it spill into 2009?

Also we asked them to put historically bad year in perspective and offer guidance on what’s ahead. In continue I briefly explain their thinking and then I’ll talk about some of Idea which I interested in.

Nouriel Roubini, known as Dr. DOOM theNYU economics professor saw the Mortgage-related meltdown coming.

Bill Gross, the founder of bond giant PIMCO warned of a subprime contagion back in July 2007 told that: “Investors need to recognize titanic shifts in market policies and be content with single-digit returns in future

years”. Robert Shiller, The Yale professor and Co-Founder of Macromarkets called both the DOT-COM and Housing Bubbles.

Sheila Bair, The FDIC chairman has been pushing to get mortgage relief for borrowers told: “We will dig out of this and when we do I hope for a back to basics society-with banks promoting real value and long-term growth”. Jim Rogers, The commodities guru predicted two years ago that the credit bubble would devastate Wall Street has an idea which is: “U.S Stocks are down a lot, but they’re still very expensive. The key is to stay solvent so you can load up when opportunity comes”.

John Train, The author and chairman of Montrose advisors has 50 years of Wall Street experience. Meredith Whitney, the Oppenheimer & Co. analyst was among the first to warn that the big banks had big problems, she thought that: “Overall economy will be worse than people expect. The biggest issue will be consumer spending”. Wilbur Ross, The billionaire chairman of W.L. ROSS & Co. Specialize in turning around troubled companies. His idea is: “The economy will not stabilize until mortgages are adjusted down to the value of homes, with affordable payment schedules”.