The United States, Europe and Japan still face the possibility of a double-dip recession and at the very least will experience below-potential economic growth for the next couple of years, economist Nouriel Roubini told CNBC Monday.Sounds about right to me, a recovery so weak that it feels like a recession, and it'll drag on for years. That is, if we don't hit a secondary recession. And the way things are going, I wouldn't be surprised if that happens. The stock markets are way oversold right now. I just don't see where the bull run is coming from other than bank profits we know are nothing more than a back door bailout.
By contrast, China and India have the best chance of leading the recovery, Roubini said.The double-dip is still possible because of very large budget deficits that are being monetized by monetary-policy authorities, Roubini, co-founder and chairman of RGE Monitor, said, speaking at the Diggers and Dealers mining conference in Kalgoorlie, Australia.
If central banks continue to monetize the deficits, "long-term bond yields may go higher, and they may crowd out the economic recovery leading to a double dip," he said.
For the U.S., Roubini reiterated his position that the recovery would only start at the end of this year, with 1 percent growth in 2010 and 2011, as opposed to 3 percent potential.
With weakness in the labor market and housing market and consumers and production still not recovered, "I'm very cautious about the United States," he said.
If all printers were determined not to print anything till they were sure it would offend nobody, there would be very little printed. -- Benjamin Franklin
Monday, August 3, 2009
Your Daily Dose Of Doctor Doom
Roubini today:
"By contrast, China and India have the best chance of leading the recovery, Roubini said."
ReplyDeleteoh my, china is in some deep doo doo.
they May be able to pull off the scam for a bit longer(1-3 years), but soon one of the riots will spread faster than they can crush it, and that will signal the beginning of a crushing depression.
there are way to many internal problems slapped on top of massive growth in dodgy loans ... something really dramatically horrible is going to happen in the next five years.
I hate to even consider what some horrid infectious disease could do on top of all the other problems. (and there are certainly a few of those on tap over there)
Yeah, depressing, isn't it? Everything depends on China and India's middle class continuing to be created at breakneck speed.
ReplyDeleteAnd it won't take much to turn that growth into contraction in either country.