Tags: Roubini | economics | recession

Roubini: 'Too Little, Too Late'; Recession Is Here

Thursday, 22 Sep 2011 04:49 PM

The U.S. and Europe can do nothing to steer their economies from falling into recession, says New York University economist Nouriel Roubini.

A look at his Twitter page shows Roubini, famous for accurately predicting the severity of the recent recession well before it happened, has abandoned all hope for avoiding double-dipping back into economic contraction.

"Economy already in recession. Whatever the Fed does now is too little, too late," Roubini tweets.
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Although the Federal Reserve has rolled out monetary-stimulus measures to spark growth and create jobs, unemployment remains stubbornly high.

Roubini says skies are darkening elsewhere in the world.

"U.K. in double dip ... EZ in recession ... China slowing," Roubini says in rapid-fire tweets. … "U.S., Eurozone and U.K. are effectively in a recession now. And policy makers are running out of policy rabbits to pull out their policy hats." … "Only issue now: will it be a mild G7 recession or a severe recession plus global financial crisis as bad or even worse than the 2008-09 one?"

Roubini isn't the only high-profile name in the business and economics world out there forecasting darker days for the U.S. economy. Another is billionaire financier George Soros.

"I think we are in it already," Soros tells CNBC when asked if the country is at risk for falling back into a recession. Soros cast blame at Republicans, saying their opposition to President Barack Obama's jobs and tax policies is responsible for steering the economy away from recovery and back into contraction.

"We have a slowdown and basically a conflict about whether the rich ought to pay taxes to create jobs or not, and there was a deal in the making which would have balanced the budget over the long term but would have allowed short-term fiscal stimulus, which would have been the right policy," Soros says.

"That was rejected, it fell apart … so it will come to the electorate next year to decide what they want."

Forecasts are bleak even among those who believe the U.S. economy is not contracting. Blackstone Chief Operating Officer Tony James puts the odds of a double-dip recession at one in three. Even if the economy technically avoids a recession, defined as two consecutive quarters of economic contraction, weak growth will make it feel like a recession for many, he says. "One percent growth is going to feel like a recession for most of America," James tells CNBC.

That means weak economic growth and high unemployment may remain the norm for years.

"What has happened is that the recovery we were experiencing in 2010 has basically stalled out," Jerry Nickelsburg, senior economist at UCLA Anderson, tells the Ventura County Star. "We're moving sideways. Consumers are being more frugal, squeezed by high gasoline prices and nervous about the turmoil in the financial markets."

He said today’s economy could be as good as it gets for some time. "Slow economic growth and high unemployment mean times are not going to be good for a while," Nickelsburg says.

Big multilateral organizations like the World Bank are getting worried as well.

"We’re getting closer to the risks of double dip," World Bank President Robert Zoellick tells Bloomberg. "I still wouldn’t predict it, but it really depends on how the risks coming out of Europe are managed."

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The U.S. and Europe can do nothing to steer their economies from falling into recession, says New York University economist Nouriel Roubini. A look at his Twitter page shows Roubini, famous for accurately predicting the severity of the recent recession well before it...
Roubini,economics,recession
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2011-49-22
Thursday, 22 Sep 2011 04:49 PM
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