Posted on 08/08/2011 6:16:10 AM PDT by TigerLikesRooster
Soft Patch Delusion Is Dashed: Roubini
Published: Monday, 8 Aug 2011 | 5:11 AM ET
By: Patrick Allen
CNBC EMEA Head of News
Influential economist Nouriel Roubini has warned hopes that the recent slowdown was temporary have been dashed and predicted the US and other advanced economies will have a second “severe recession ”.
Writing in Monday’s Financial Times, the founder of Roubini Global Economics said: “America’s recent data have been lousy: there has been little job creation, weak growth and flat consumption and manufacturing production. Housing remains depressed. Consumer, business and investor confidence has been falling, and will now fall further.”
In the euro [EUR=X 1.4187 -0.0197 (-1.37%) ] zone Roubini notes that peripheral economies are contracting, while the rest are hardly growing and the UK is flat.
“Even worse, leading indicators of global manufacturing are slowing sharply—both in the emerging economies like China, India and Brazil, and export-oriented or resource-rich countries such as Germany and Australia,” Roubini wrote.
(Excerpt) Read more at cnbc.com ...
P!
He may be right, but, his solutions don’t sound quite like what a freeper would call for.
He always makes prognosis, but shy of suggesting any meaningful solution. He wants to stay within elite circle. His prediction could make him look prescient. However, once he suggests real solution to it, it will turn off elites and he will be kicked out to wilderness.
LLS
Yes and no.
Roubini, unlike most other Keynesian economics types, realizes that this is a debt deflation.
Debt deflations cannot be stimulated away. The debt will deflate, that’s all there is to it.
His proffered solution at the end of the OP is to cushion the effects of debt deflation, but in the end, not much can be offered up. Bondholders are going to take a haircut. Bankers are going to fail - and they should.
Which is what terrifies me about the soaring national debt and raising the debt ceiling. Debt is the problem, so adding more is just packing the poweder keg with more gunpowder so the coming explosion will be that much more violent.
I have no doubt that Obama is trying to create a US financial collapse, on orders from Soros. The GOP mainly are playing into his hands.
God Bless the Tea Party freshmen. We need the Senate very badly - not that I am all that optimistic that we will get the conservative leadership we need there.
I’m with Dr Doom on this one.
“Roubini, unlike most other Keynesian economics types, realizes that this is a debt deflation.
Debt deflations cannot be stimulated away. The debt will deflate, that’s all there is to it.”
Excellent post.
If it were a typical recession, one triggered by the Fed having raised interest rates, then it would have responded to some degree to all the stimuli. But this recession triggered itself during a period of very low interest rates. That was a red flag from day one that this is a recession of an entirely different order.
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