‘Prophets of doom’ say crisis warnings unheeded

WASHINGTON, October 3, 2008 (AFP) – The so-called “doomsday” economists long derided by the mainstream say the current financial maelstrom was inevitable, but debate is still raging on how the US economy will emerge from the crisis.

The analysts who had sounded warnings about economic imbalances for at least the past two years argue that their forecasts are now coming true, and that things could get worse, despite reassurances from mainstream economists.

“Even though there were extraordinary excesses and imbalances in the US economy and financial system coming into the spring of 2007, mainstream forecasters believed things would still work out OK because they had done so previously,” said Michael Panzer, a former securities trader and author of a 2007 book aptly called “Financial Armageddon.”

Panzer argues that he predicted the current “systemic crisis” but that this is just “the second of four stages” in the crisis.

“My belief was that this development would be the catalyst that transforms economic malaise into a depression — like we had 80 years ago,” he said.

“I believe we are on the precipice of a lingering and painful deflationary downturn, which will last at least a few years.”

Nouriel Roubini, a