Dr. Doom Sees More than 400 U.S. Banks Failing

Nouriel Roubini, also known as Dr. Doom, told CNBC Friday that more than 400 U.S. banks will fail. Speaking to CNBC on the shores of Lake Como, Italy at the Ambrosetti Forum economics conference, Roubini said that "The biggest banks have been backstopped, but 800-plus small- and medium-sized banks in the US remain on the critical list and half of those will go bust." According to a Reuters report, "Roubini said corporate and consumer debt problems will get worse and that there are more problems ahead in the commercial and residential property market." "Policy makers are running out of bullets, the problem is we need fiscal consolidation, fiscal policy is constrained by the debt problem, monetary policy is becoming ineffectual," he said. "We are in a liquidity trap and we have insolvency problems," he continued. "What we need is credible spending plans over the medium term on health care, welfare and retirement age. This will create a fiscal constraint lasting well into next year."