We Are On The Edge of Something Really Bad: Roubini Warns of New Bubble, Bigger Than ’06, Citi Warns Of Italian Rebellion Could Be Contagious, Ron Paul Warns of Imminent Dollar Collapse, And China Ratings Firm Warns Of Global ‘Currency Crisis’

Roubini: Fed’s Credit Bubble May Be Bigger Than 2003-06

Nouriel Roubini, the respected New York University economist, says the Federal Reserve’s quantitative easing (QE) is brewing a credit bubble that means trouble down the road.
Through QE, the Fed has injected more than $2 trillion into the financial system over the last five years,
“The risk from QE isn’t goods inflation; it’s not going to be a rout in the bond market, because the Fed will exit slowly,” Roubini tells Yahoo. “The risk is like during the 2003-06 cycle. We exited very slowly, and we got an asset bubble.”
But he thinks this bubble could be “bigger than 2003-06.”
…

Citi Warns Of Italian Rebellion Could Be Contagious

Citi‘s currency guru Steven Englander weighs in on what we just saw in Italy.
This is the first European election in which voters didn’t do the right thing. Instead they gave surprising support to politicians who reject austerity and, in some cases, the euro. This could become a major problem if it proves contagious. The feel-good from the runup in Italian asset markets was not enough to offset the feel-bad from austerity, low growth and unemployment. If all it would take to fix this was an ECB rate cut, they would do so immediately, but euro zone politicians may need to ease fiscal constraints  and find ways to quickly stimulate growth. Elections are more problematic than market scares or sentiment shifts as they can’t be undone by printing money. Still the outcome does not seem so dire that a bit of growth and ECB flexibility could not turn it around.
Meanwhile, SocGen currency analyst Sebastien Galy titles his note: “Instability Cubed.”

Italy Senate “Ungovernable”; No Coalition Possible

La Republica confirms what we long thought highly likely: The Italian Senate is Ungovernable.
A Senate majority takes 158 seats and no party has more than 123 at the moment. The current results look like this:
Senate Seat Projections

• Bersani 104
• Berlusconi 123
• Grillo 57
• Monti 17

There are 315 total seats and the total above is only 301. Although 14 seats remain, not even a Monti-Bersani coalition in addition to those 14 seats would bring Bersani’s total to 158.
Curiously, it appears Bersani received a plurality of the Senate popular vote with 32% compared to Berlusconi’s 30.2%. Grillo weighs in with 23.9%, and Monti at 9.1%…

Ron Paul: Dollar Collapse Imminent!

TheAlexJonesChannel, Published on Feb 25, 2013

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