No defence left against double-dip recession, says Nouriel Roubini

[The Northerner]

“The US has run out of bullets,” said Nouriel Roubini, professor at New York University, and one of a caste of luminaries with grim forecasts at the annual Ambrosetti conference on Lake Como.

“More quantitative easing (bond purchases) by the Federal Reserve is not going to make any difference. Treasury yields are already down to 2.5pc yet credit spreads are widening again. Monetary policy can boost liquidity but it can’t deal with solvency problems,” he told Europe’s policy elite.

Dr Roubini said the US growth rate was likely to fall below 1pc in the second half of the year, despite the biggest stimulus in history: a cut in interest rates from 5pc to zero, a budget deficit of 10pc of GDP, and $3 trillion to shore up the financial system.

The anaemic pace compares with rates of 4pc-6pc at this stage of recovery in normal post-war recoveries.

“We have reached stall speed. Any shock at this point can tip you back into recession. With interbank spreads rising, you can get a vicious circle like 2008-2009,” he said, describing a self-feeding process as the real economy and the credit system hurt each other.

“There is a 40pc chance of double-dip recession in the US, and worse in Japan. Even if it is not technically a recession it will feel like it,” he added.

Read more: http://www.telegraph.co.uk/finance/economics/7981334/No-defence-left-against-double-dip-recession-says-Nouriel-Roubini.html

[babylonsister]

1. Now he's published in the rag telegraph? How the mighty

have fallen.

He hasn't been right all that much, iirc.

Edit to add, yes, I did recall correctly...

Nouriel Roubini Was Wrong, Again, and Again and Again...

http://www.erictyson.com/articles/20081024_1

[neverforget]

3. Unlike the Fed, he saw the Real Estate bubble. He wasn't wrong about that.

[babylonsister]

4. He's a loser. I agree, no one got everything right, but he's not credible. nt

[FreakinDJ]

7. Everyone with 1/2 a brain saw that one coming

Was all over DU since 2003 - where were you?

[neverforget]

9. been here since 2001, where were you?

Apparently the Fed has 1/2 a brain because they fed the bubble.

[pnwmom]

2. "There is a 40 percent chance of a double-dip recession" is what he says.

Your title implied something else.

[ibegurpard]

5. trickle down doesn't work...bubble up is the answer

people without jobs or who are nervous about their jobs or hiring more people aren't going to be buying anything.
It's pretty fucking simple.

[FreakinDJ]

8. Washington needs to get off the "Trckle Down Kool Aid"

that is the real problem

[Skittles]

6. run out of bullets?

they never used any REAL AMMUNITION