Worst financial crisis since the great depression

We are only about halfway through the worst financial crisis since the great depression, according to Nouriel Roubini on Bloomberg TV this morning, being interviewed about financial markets, the economy and the testimony by Bernanke. Here are a few highlights:

• Roubini expects dozens of large regional banks to fail as well as hundreds of smaller banks before this is over.
• The FDIC has already used up 10% of its funds for IndyMac.
• The stock market will probably drop another 20%.
• The economies of the rest of the world are also going down.
• This will be a long, ugly and nasty U-shaped recession lasting 12 to 18 months, not the mild 6 month V-shaped recession that the delusional consensus expects.

According to Roubini, "Fannie and Freddie are insolvent and the Treasury bailout plan (the mother of all moral hazard bailout) is socialism for the rich, the well connected and Wall Street, and a continuation of a corrupt system where profits are privatized and losses are socialized."