America’s economy risks the mother of all meltdowns

By Martin Wolf
Financial Times (London)
February 19, 2008

“I would tell audiences that we were facing not a bubble but a froth – lots of small, local bubbles that never grew to a scale that could threaten the health of the overall economy.” Alan Greenspan, The Age of Turbulence.

That used to be Mr Greenspan’s view of the US housing bubble. He was wrong, alas. So how bad might this downturn get? To answer this question we should ask a true bear. My favourite one is Nouriel Roubini of New York University‘s Stern School of Business, founder of RGE monitor.

Recently, Professor Roubini’s scenarios have been dire enough to make the flesh creep. But his thinking….

Read the rest:
http://news.yahoo.com/s/ft/20080219/bs_ft/fto021920081334359078;_
ylt=Au_NhPTKsmXl7duQ4a6vyJ.s0NUE

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