On the positive side, Roubini is seeing some positive signs out there, though he is targeting 2010 as opposed to 2009 for working out of the recession. On the banking front, Roubini continues to see difficulties and thinks the weaker banks are not going to be able to raise private capital in this market so let's move forward with taking them over and cleaning them up so they can become productive and privatized again. The video is inside the CNBC link:
"(But) if you assume the results have been leaked are true, you're going to find out that a large number of financial institutions have significant capital needs," Roubini told CNBC.
He also warns the government's plan to make banks covert more preferred shares to common stocks could lead to a creeping nationalization of the banks.
"Weaker institutions are going to find it very hard to raise money in the private sector because they're going to be further diluted by the government converting preferred into common shares. So eventually we may go into a creeping process of partial nationalization of some financial institutions," Roubini added.
