An economic Cassandra whose predictions are coming true - by Stephen Mihm
"Roubini argues that most of the losses from the US bad debt have yet to be written off, and the toll from bad commercial real estate loans alone may help send hundreds of local banks into the arms of the Federal Deposit Insurance Corp. "A good third of the regional banks won't make it," he predicted. In turn, these bailouts will add hundreds of billions of dollars to an already gargantuan federal debt, and someone, somewhere, is going to have to finance that debt, along with all the other debt accumulated by consumers and corporations. "Our biggest financiers are China, Russia and the Gulf states," Roubini noted. "These are rivals, not allies." The United States, Roubini went on, will most likely muddle through the crisis but will emerge from it a different nation, with a different place in the world.
"Once you run current-account deficits, you depend on the kindness of strangers," he said, pausing to let out a resigned sigh. "This might be the beginning of the end of the American empire."
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