Even 'Dr. Doom' Is Scared: Economy Much Worse Than Roubini Predicted

Yahoo Finance ^ | 3/3/2009

[GVnana]

Even 'Dr. Doom' Is Scared: Economy Much Worse Than Roubini Predicted

Posted Mar 02, 2009 01:35pm EST by Aaron Task in Newsmakers,

Fed Chairman Bernanke raised eyebrows (and, briefly, the market) last week when said there's a "reasonable prospect" the economy will bottom this year and be in recovery in 2010.

But Berkshire Hathaway's Warren Buffett disagrees: The economy "will be in shambles throughout 2009 and...probably well beyond," the Oracle of Omaha declared this weekend.

In sum, Buffett and much of the rest of humanity are just now coming around to Nouriel Robuini's way of thinking, the economist known as "Dr. Doom" is upping the ante on his longstanding bearish views.

A year ago Roubini was forecasting an 18-month recession with a U-shaped recovery; now, he's now expecting the downturn to last at least 24 months and possibly 36-months. He also sees rising risks of a Japanese-style L-shaped stagnation, i.e. a prolonged period with little or no economic growth.

"I was one of most bearish people [but] the economy has surprised the bears on the downside," says Roubini of NYU's Stern School and RGE Monitor. "What's happening in the world now is scary."

[GVnana]

See video at the link.

[Cyber Ninja]

OBAMA = One Big A$$ Mistake America

[GOPJ]

When does the panic start?

[silverleaf]

would that be “Obama economic advisor” (and voter) Warren Buffet?

[Huck]

bump for later.

[madinmadtown]

When does Soros step in?

[Petronski]

This morning on Squawk Box, Eric Hodve (obviously not a liberal) ripped Obama a new one and boldly, plainly, used “the ‘d’ word” to describe the current situation.

http://www.cnbc.com/id/15840232?video=1050674027&play=1

[EGPWS]

When does the panic start?

That is a personal thing.

ACCCCCHHH, WE'RE ALL GOING TO DIE!

Personally, I'll take it in stride....

[GVnana]

Who says he isn’t behind this already?

[arthurus]

OBAMA = One Big A$$ Mistake America

And I don't think we can correct this mistake, not in 2 years, not in 4 years, not in (fill in the blank) years. ACORN is in control of the ballot box now. The coup-de-grâce will be Amnesty, coming up a little later this year with 20-40-many millions more new Democrats to be poured into the system.

[arthurus]

Somebody said this guy looks and acts like HoChiMinh. I think Vietnam had a few really bad years- famine and suchlike.

[arthurus]

Soros is already IN.

[Ancesthntr]

...ripped Obama a new one...

He deserves it. Any occupant of the White House who has the extraordinarily piss-poor judgment to say (effectively) "pass my plan in its entirety and NOW, or we're going to Hell" is an irresponsible jackass. Doesn't this dumbphuk know that his every word is analyzed up, down and side-ways? Does he care? Is he TRYING to spook the market? Does he have even a clue that tanking the stock market will do a lot more than merely break the net worth of a lot of rich Republicans, but that it'll cause nearly every company and state with a defined benefit plan to go belly up? This guy is either as dumb as a box of rocks, or he is evil incarnate for trying to make this worse.

...and boldly, plainly, used “the ‘d’ word” to describe the current situation.

We ARE in a depression. Recessions result from either too much inventory (usually) or some relatively minor external shock (oil embargoes, small bank crises, etc.). Depressions may start that way, but they are built on the backs of unsustainable credit bubbles - and the recession/shock is the straw that breaks the camel's back. Such is our situation now. More debt is NOT, NOT, NOT the solution, it will only exacerbate the situation. I hope and pray that when we finally come out of this thing several years from now, Keynsian economics gets buried for good.

[madinmadtown]

He is obviously behind this, but I am waiting for him to take the front and center stage as opposed to standing behind the curtain or in the wings.

[ChocChipCookie]

The best news right now is that it’s March already. 2009 will soon be 25% behind us. Not that I’m expecting much hope and change in 2010 and beyond.

[GeronL]

sheep don’t panic even with the wolves carrying off grandpa

[GeronL]

yes. your right. its probably over when it comes to the ballot box. Now lets just see if anyone will stand up and do something about it.

[Centurion2000]

sheep don’t panic even with the wolves carrying off grandpa

No, they panic with the grasslands turn into desert.

[blam]

"When does the panic start?"

Beginning Now: The Panic Phase Of The Economic Collapse

Mar 02, 2009 - 08:48 AM

Just as the Obama Administration launches a triple tirade of new initiatives — a record stimulus package, a bigger round of rescues, and the largest deficit financing of all time … Just as the Treasury Department doubles down on its bailouts for sinking giants — Fannie Mae, Freddie Mac, AIG, General Motors, Chrysler, and Citigroup … And precisely when the government has raised hopes for a recovery in 2010 …

The panic phase of this collapse is about to begin.

The panic phase is an acceleration in the economic decline … a chain reaction of debt explosions … a free-fall in the financial markets … and a series of rude awakenings that will accelerate the decline even further:

Rude Awakening #1

In a Collapse, Washington's Economic Forecasting Models Are Worthless.

[snip]

[An Old Man]

The Economy Is Sinking Three to Five Times Faster Than Expected.

Every single step taken by the Bush and Obama administrations has been based on the flawed assumptions embedded in their economic models. They assume that:

• the world economy is not collapsing …
• the banking system is not broken …
• corporations, investors, consumers and entire nations will not take drastic action to protect their own interests, and, therefore … we will not see widespread factory shutdowns, wholesale layoffs, mass dumping of assets, or major new trade barriers.
• They assume that none of this is happening or will continue to happen. They assume that the six-decade growth cycle that began after World War II remains largely intact. They think, talk and act as though we were still living in an era that's now over.

Each of these assumptions is, on the face of it, patently false. And yet, it's based on these assumptions that our government continues to spend, lend or guarantee TRILLIONS of dollars.

Starting right now, however, we can begin to see the first signs of a rude awakening in that realm as well:

• The New York Times reports “a sense of disconnect between the projections of the White House and the grim realities of everyday American life.”
• Economist Allen Sinai calls the White House's economic forecasts “a hope, a wing and prayer.”
• Even Obama advisor Paul Volcker admits this crisis is swifter and broader than that of the Great Depression — something that, at this juncture, most Obama advisers refuse to admit.

Despite all these doubts, however, the average GDP forecast of most private economists differs only marginally from the rosy forecasts of the White House. Specifically …

In 2009, the White House predicts the economy will contract by a meager 1.2 percent, while private economists predict a decline of only 2.0 percent.

The grim reality:

• The 6.2 percent plunge in the fourth quarter — plus a similar decline estimated for the current quarter — shows the economy is now sinking three to five times faster than they're forecasting for the year.
• There is absolutely no sign that the decline is ending and every sign that it's accelerating .
• Thus, to contain this year's decline to the meager 1 or 2 percent that the government and private economists are projecting would require a comeback in the second half that's nothing short of a miracle.

In 2010, the White House says the economy will grow 3.2 percent, while private economists say it will grow 2.1 percent.

The grim reality:

• In America's First Great Depression, the financial collapses beginning in 1929 led to GDP declines of 8.6 percent in 1930, 6.4 percent in 1931 and 13 percent in 1932.
• But in this cycle — America's Second Great Depression — the financial collapses that we saw in 2008, such as Bear Stearns, Lehman Brothers, Fannie and Freddie, Washington Mutual, Wachovia, AIG, Citigroup and many others, were markedly worse than those of 1929.
• That doesn't necessarily mean that the GDP declines in 2009, 2010 and 2011 will be worse than those of the early 1930s. But it does mean that the 2 or 3 percent growth now forecast by private and government economists for 2010 is clearly a pipedream.

In the panic phase now unfolding, some prominent economists are now beginning to recognize their forecasts may be full of holes. It's only a matter of time before they admit it in public.

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Thanks for the Link!