Nouriel Roubini, professor at Stern School of Business at New York University and chairman of RGE Monitor, is renowned for having foreseen the current economic malaise a number of years ago. He was scorned at the time by mainstream economists for being a crank, but the same people are now lauding him for his foresight and paying top price for the consulting services of Roubini Global Economics.

Aline van Duyn, US Markets Editor of the Financial Times, has just conducted a three-part video interview with Roubini on topics ranging from the likely duration of the recession to regulation, the demise of more hedge funds and the outlook for stocks, commodities, currencies and bonds.

In Part 1 of the interview, Roubini expects 2009 to be a

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HIDDEN VALUE

Dear Value Seeker,

The good news is there is only one month left before the end of the year.

But that’s still plenty of time for the crisis that began in the subprime mortgage market to wreak more havoc in 2008.

Especially if today’s carnage is anything to go by.

The Dow has plunged over 400 points at the time of writing. The S&P 500 and the Nasdaq have also been taken to the woodshed.

Oil is back below $50 a barrel. Gold has given up $50 to reach $770 an ounce.

Last week’s bailout-fueled optimism has given way to economic reality.

Today, the US manufacturing index slumped to its lowest level since 1982.

Retailers did manage to tempt bargain hunters out on Black Friday. But once the mega-discounted products had gone, so did much of the shoppers’ enthusiasm.

We’re reminded that the America’s recession is now a year old. The wonks

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Once again, I am flattering an entry with a picture taking here in Switzerland where I am currently entertaining courses at HEC Lausance. As you can see, it is a beautiful place and also, as it were, very interesting with respect to tail fume patterns from the enormous amount of airplanes moving back and forth over le Lac Léman (middle of Europe remember!). Posting is slim I know, but so unfortunately is time; I can assure that it is not out of lack of enthusiasm to write and opinion on current events.

Moving on to the topic du jour it is interesting to observe wow fast things sometimes change. We need not go back more than 5-6 months to observe how hawkish central banks across the economic edifice were busy scrambling to raise rates in order to quell inflationary pressures. Most notably, the

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Drake Bennett at Boston.com penned an article on what a a href="http://www.boston.com/bostonglobe/ideas/articles/2008/11/16/depression_2009_what_would_it_look_like/?page=full"new Depression/a would like to us. In it were some interesting thoughts, and from that, ideas for investments:br /br /blockquoteInstead of dusty farm families, the icon of a modern-day depression might be something as subtle as the flickering glow of millions of televisions glimpsed through living room windows, as the nation's unemployed sit at home filling their days with the cheapest form of distraction available./blockquotebr /a href="http://4.bp.blogspot.com/_WWGUfU1tOjI/SSWAaJxoAiI/AAAAAAAAAlw/mFpMi4R0SxI/s1600-h/UTVNov20.png"img style="display:block; margin:0px auto 10px; text-align:center;cursor:pointer; cursor:hand;width: 320px; height: 184px;" src="http://4.bp.blogspot.com/_WWGUfU1tOjI/SSWAaJxoAiI/AAAAAAAAAlw/mFpMi4R0SxI/s320/UTVNov20.png" border="0" alt=""id="BLOGGER_PHOTO_ID_5270760125696049698" //abr /a href="http://4.bp.blogspot.com/_WWGUfU1tOjI/SSWDqkOei-I/AAAAAAAAAl4/1hWkksmJ53s/s1600-h/VIANov20.png"img style="display:block; margin:0px auto 10px; text-align:center;cursor:pointer; cursor:hand;width: 320px; height: 184px;" src="http://4.bp.blogspot.com/_WWGUfU1tOjI/SSWDqkOei-I/AAAAAAAAAl4/1hWkksmJ53s/s320/VIANov20.png" border="0" alt=""id="BLOGGER_PHOTO_ID_5270763706209176546" //abr /span class="fullpost"blockquoteToday, a depression could reverse that process altogether. In a deep and sustained downturn, home prices would likely sink further and not rise, dimming the appeal of homeownership, a large part of suburbia's draw. Renting an apartment - perhaps in a city, where ...

It was only a few months ago that some economists were screaming for a Fed rate hike to keep consumer price inflation under control.

Things have changed dramatically since then. The biggest economic fear for the foreseeable future is now deflation.

This from VOA News:

Economist Nouriel Roubini of New York University said that rapid decline in oil prices indicate that deflation is more of a problem than inflation.

“I think deflation is going to be the story, or what I refer to as ’stag-deflation,’ a period of economic recession and deflation,” said Nouriel Roubini. “And why do I say that?  We’re now seeing the beginning of a slacking goods market with aggregate demand falling relative to supply.”

Roubini says the commodity prices that were at very high levels six months ago have fallen dramatically as demand suddenly fell as companies and consumers conserved cash.  Oil prices are

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Kuwait, Saudi Arabia and even the mighty Dubai are getting dragged down by the global economic turmoil.  “The global financial storm rolled across the Persian Gulf on Sunday,” reports the WSJ, “as Kuwait’s central bank guaranteed bank deposits and cobbled together a hasty bailout for one of the country’s largest banks.”

– Saudi Arabia, meanwhile, has announced it will pour $2.3 billion in loans to low-income borrowers.

– There are also signs of trouble in boom town Dubai. The WSJ reports that real-estate brokers there say they are seeing signs of “price weakness” there. We can only presume this is real-estate broker speak for “Nobody’s buying.”

– Over the weekend, “Dr. Doom,” aka New York University economics professor Nouriel Roubini, told The Times that the world economy was “at a breaking point” and that

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If we are lucky, this US recession might only last two years, says Adam Lass. The economic rot is spreading from banks to consumers to factories…and then back again in a vicious cycle. Investors can use this period to buy up healthy firms at rock-bottom prices.

This from Taipan Daily:

Let’s start with banks now that Washington is such a major player in this area. Both New York University’s Professor Nouriel Roubini and myself have delivered many early warnings on this topic.

However, where I have been primarily concerned with the possible fates of the 117 on the FDIC’s watch list of dangerously undercapitalized banks, Professor Roubini notes that some 8% of the 8,500 banks the FDIC insures are in just as deep a hole.

Now he warns that despite Washington’s pledge to back each and every bank, in the end, it will be forced to perform triage, and abandon the

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In the currency market, the dollar moved lower again against the euro. Late Tuesday, the euro was trading at $1.3664 vs. $1.3587 on Monday. The day’s news was dominated by Treasury Secretary Paulson’s announcement that his department will commit $250 billion to buy temporary ownership stakes in major U.S. banks.

The plan is similar to plans unveiled earlier by Great Britain and the Eurozone.

Paulson said he regrets having to do this, but it’s “what we must do to restore confidence to our financial system.” He assured the public that recipients will be watched closely, to make sure they deploy the new capital, and don’t hoard it.

But a skeptical Nouriel Roubini, economist at New York University, said that the financial system “might need twice as much. So this is just the first round of recapitalization of the banks,” in his opinion.

European Central Bank President Trichet threw in his 2 cents,

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In a bold move to provide stability to the frozen short-term credit markets, the U.S. Federal Reserve yesterday (Tuesday) announced new measures aimed at boosting liquidity and allowing corporations to maintain daily operations. But the U.S. markets were less enthusiastic about the Fed’s new measure. Slight gains in early morning trading quickly reversed course to plunge much lower.

In a bold move to provide stability to the frozen short-term credit markets, the U.S. Federal Reserve yesterday (Tuesday) announced new measures aimed at boosting liquidity and allowing corporations to maintain daily operations. But the U.S. markets were less enthusiastic about the Fed’s new measure. Slight gains in early morning trading quickly reversed course to plunge much lower. At the New York close, the blue-chip Dow Jones Industrial Average Index plunged 508.39 points, or 5.11%, to close at 9,447.11. The tech-laden Nasdaq Composite Index plummeted 108.08 points, or 5.80%, to close at 1,754.88. And the broader Standard & Poor’s 500 Index dived 60.66 points, or 5.74%, to finish the day at 996.23. The S&P 500 closed below 1,000 for the first time since 2003. The Dow is down 29% year-to-date, while the S&P 500 is down over 32% over the ...