The worst is yet to come, says eagle-eyed economist who predicted downturn; more taxpayer money will be needed for bailouts

Economist Nouriel Roubini -- a New York University professor who predicted the current economic turmoil and came out against the bailout of Wall Street -- tells the Financial Times of London what he sees for our future.

And it is frightening.

"What does Roubini think is going to happen next? Rather worryingly, in London last Thursday he predicted that hundreds of hedge funds will go bust and stock markets may soon have to shut – perhaps for as long as a week – in order to stem the panic selling now sweeping the world."

Why is he so down on the future? Because he is not tied to making money off you through encouraging investment now in the stock market. And the financial markets are going to decline another 20 percent in value.

He also knows that South Korea, Pakistan, Iceland and a few other countries cannot afford to pay off their debts. Roubini has simply added up the facts and come up to his conclusion of a catastrophe. And the facts make his critics angry -- at him.

The Financial Times wrote:

Others who claimed the economy would escape a recession had been swept up in “a critical euphoria and mania, an irrational exuberance”, he said. And many financial pundits, he believes, were just talking up their own vested interests. “I might be right or wrong, but I have never traded, bought or sold a single security in my life. I am trying to be as objective as I can.”

What does his objectivity tell him now? No end is yet in sight to the crisis.

“Every time there has been a severe crisis in the last six months, people have said this is the catastrophic event that signals the bottom. They said it after Bear Stearns, after Fannie and Freddie, after AIG [the giant US insurer that had to be rescued], and after [the $700 billion bailout plan]. Each time they have called the bottom, and the bottom has not been reached.”

Roubini sees even larger government bailouts of global markets around the world. And that means help to you and your problems will have to be put on the backburner again.

It's a shame. And it is proof that you should not listen to anyone on television or in the newspaper or on radio giving advice. Get in cash and ride out the storm that Roubini sees lasting a lot longer here and around the world.

http://business.timesonline.co.uk/tol/business/economics/article5014463.ece