Nouriel Roubini's Financial Times Interview: Double-Dip Recession Still A Risk

Are we in for a double-dip recession? Economist Nouriel Roubini, the president of RGE Monitor who's often referred to as "Dr. Doom," recently sat down with Martin Wolf of The Financial Times, and said that the world faces a "rising risk" of a double-dip recession.

Roubini's increasingly vocal about the risk of a recession relapse in the past few weeks. Earlier this year, he warned of a "perfect storm of rising oil prices, rising taxes and rising nominal and real interest rates on the public debt of many advanced economies."

In his interview with The Financial Times, Roubini was similarly pessimistic:

"I do agree with the consensus that we'll have a couple of quarters of strong economic growth. The question is whether the medium-term growth is going to be V-shaped a return to potential or anemic growth below potential. My view of it is that it's going to be anemic."

Towards the end of next year, Roubini added, advanced economies could face a tough choice. Namely, if governments withdraw fiscal and monetary stimulus too early, the economy could fall back into another recession. On the other hand running up large deficits could lead to stagflation. To combat booming budget deficits, Roubini also called for world governments to commit to a "phase-in" tax increase that would be rolled out once the economy recovers.

Watch the entire interview with Nouriel Roubini at The Financial Times.

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Comments

[Skeetshooter]

09:02 PM on 10/09/2009

Only the Federal Govt. and crooks can spend what they ain't got and cain't borrow. From where I sit, we're still looking at a long single trough recession.

[yourlibral]

05:21 PM on 09/13/2009

...Everyday it's the same old rethreads. NO change form Washington.

good articles: http://www.iamned.com ......

[liberal politics]

03:00 PM on 09/11/2009

This more than anything else is why I don't trust Obama anymore.

The moment it became clear he wasn't going to fight to actually clean up the financial industry is the moment it became clear that the hope and change rhetoric was just that, rhetoric. All he cares about is keeping corporate money in dem hands, he doesn't dare anger his corporate sponsors.

good articles 4 slow news day: http://www.iamned.com

the system needs to be overhauled cuz nothing seems to change ...

[lazercat2008]

05:17 PM on 09/11/2009

Sadly, though I find you very un-American, there may be some truth in what you say.

[mamababa]

10:43 PM on 09/11/2009

B*tch, moan, groan...whatever happened to 'USA!USA!USA!'?

[lazercat2008]

11:51 AM on 09/11/2009

I'm a little fuzzy on how bailing out the corporations and Wall Street, while letting innocent working Americans go bankrupt is Socialism.

[StephenJK]

02:38 AM on 09/12/2009

It's called "Corporate Welfare".

[liberal user]

05:04 PM on 09/10/2009

Bring back the Glass Stegal Act to promote fair competition and eradicate monopolies and too big to fail conglomerates.

Do not allow foreign owned multinationals to own too much American real estate or stock in any individual American manufacturer or corporation.

good articles 4 for slow news day: http://www.iamned.com

[dadw5boys]

09:09 PM on 09/10/2009

Republicans passed so many small rules and laws it would take years to turn all of them around.

Just overturning the accounting rules and the BARRIER to ENTRY laws would take 5 years .

[research]

02:48 PM on 09/10/2009

Betting on the economy is still legal, and still without reserves, so TARP the taxpayers are still backing the Gambling Banksters who cause the crash.

The Betting is ten times the value of the Main Street Economy.

[FoonTheElder]

02:34 PM on 09/10/2009

I understand Warren Buffett is now pulling his money out of stocks and moving it to bonds, anticipating the double dip drop in stocks.

http://www.businessinsider.com/buffett-paring-back-on-stocks-2009-9

[mrcontinental]

03:25 PM on 09/10/2009

Stocks will fall again, this has just been one massive pump and dump.

You wanted to know where the TARP money went... so now you know. The house just floated credit to the very degenerate gamblers who got us into this mess and they are blowing up the bubble again and once they have sucked in enough of your Joe SixPack money they will take profits and pop it again buying up the assets of the bankrupt and foreclosed during the fallout.

[lastmanstanding99]

04:52 PM on 09/10/2009

Read Ron Paul's "End the FED" he explains alot about how all this happened and what Buffett believed in. Very good readhttp://mises.org/store/End-the-Fed-P619.aspx

[jozzie]

02:03 PM on 09/10/2009

For G-d's sake. The man makes one accurate prediction and he's labeled Doctor D00m for the rest of his life.

I guess that's the reward for calling our system on its excesses.

[Furby]

02:08 PM on 09/10/2009

I'd rather listen to him than Buffett.

[lastmanstanding99]

04:40 PM on 09/10/2009

no kidding,Buffett. caused all this by lowering interest rates too low for too long and they are still doing the same thing. The bubble is growing and we are now totally broke. If they print anymore money, no countries will buy any of it+ the American people will probably start riots if they stimulate the economy anymore. Notice, big banks doing great, but all the small banks are failing. When this is all said and done, we will have just a few monopoly banks, that are controlled by the FED.

[EinChicago]

02:24 PM on 09/10/2009

"For G-d's sake. The man makes one accurate prediction and he's labeled Doctor D00m for the rest of his life."

I think the name stems less from making the 1 time he was lucky and his prediction was sort of right than teh fact, he made the same prediction incessently and inaccurately for several decades and was never right.

[LunaPark]

02:01 PM on 09/10/2009

China is starting to consume its own production. Chinese domestic retail sales are up 30% ytd. They are buying more cars than the car loving US. All the while Chinese exports fell off of a cliff. This is a bad sign for the US. China no longer needs the US for their economy or the US treasuries. How much longer can the dollar hold out?

[Furby]

02:08 PM on 09/10/2009

It can't. China's not the only country wanting a new base currency.

[truenortherner]

04:19 PM on 09/10/2009

Personally, I welcome our soon-to-be new Chinese overlords.

That Great Wall thing? ... classic!

[Furby]

05:02 PM on 09/10/2009

They respectfully refer to you as trading partners. Could you possibly see your way to referring to them as something else than overlords, lest they start believing you and behaving accordingly?

[PoliticalWonk]

01:17 PM on 09/10/2009

The cure for high oil prices is "high oil prices". It leads to conservation, investments in alternative enery programs.

The cure for low oil prices is 'low oil prices". It leads to an increase in consumption and an increase in economic activity.

All this may not be a pleasant cycle but is much more efficient then anything else. Especially better then some regulators with their own agenda's stepping in. Oil is a global commodity whose price is based on demand.

[Raccoon1]

10:09 AM on 09/12/2009

OPEC and politics have nothing to do with prices?

[HTooley]

12:43 PM on 09/10/2009

I am wondering how the Republicans will act when the commercial sector starts to implode? Will these big investors get a 'cram down' as opposed to the single homeowner? How will they justify the different approaches to essentially the same problem?

The other day, I took the back way up to the local Home Depot. I saw sign after sign for leases on commercial property on block after block. It is overbuilt, and will take quite some time to fill with occupants. How will Coldwell Banker handle these investments? Will they go bankrupt, or will they go to the courts for relief? They took a huge speculative risk, will these speculators be 'shown the door like the irresponsible home owners who did the same?

As Roubini has said, there will be a tough balancing act when it comes to phasing out fiscal stimulus and the implementation of tax increases. We can mitigate the cost of a stimulus package only if we insure that it will improve productivity of our economy. Giving the average Joe 20 bucks a week is not efficient. It may be politically smart, but it is economically dumb.

I had a bag of sand left over from my project. Maybe I should just go out and pound it some!

[MadridFrank]

01:01 PM on 09/10/2009

the commercial sector is overburdened by "excess" .We don't require 100 different clothing chains,50 different yourget, ect. This is the next shoe to drop.It's a systematic issue,not a Republican one!

[HTooley]

01:22 PM on 09/10/2009

It is a market of excess capacity. And it is not a partisan issue, we will all have to deal with it. However we have seen how the Republicans have dealt with this same issue in regards to the homeowners and to the stimulus package. They demagogued it.

The question is will they take the same stand when it comes to their natural constituency, the big money boys that butter their bread. My take is that they will do their best to put 'lipstick on this pig'.

[MadridFrank]

12:20 PM on 09/10/2009

The former consumer based economy is gone forever(demographics,lower credit,more private debt and a save mentality). Lost jobs will, by-in-large not return, there will some positive growth-1.5%-the next three quarters,when we need 6% or more. We will enter into another long recession late 2010.Unemployment will top 11% and there will be unprecedented social,economic instability due to
state gov't lay-offs and disruption to social services.

[outnow]

12:02 PM on 09/10/2009

Increase in inequality of income is destroying the economy. 400 billionaires in America are not being taxed enough due to Raygun and Bush 43 tax cuts for the very wealthy. Deunionization was the political strategy to undermine income equality. Union-busters got one in twenty union employees fired during the 80's.

From 1930 to the end of WW II, there was "income compression" - the gap narrowed and labor was still a means to earn money; nowadays only investment makes sigificant income. Actual physical labor pays a tiny fraction to the worker when compared to income from investment. Plus, hedge fund operators have special income tax treatment.

All New York City school teacher's salaries for three years in made by the manager of a single hedge fund in a single year as his salary. This gives you some idea of why America is not competitive.

So unless and until presidents like Obama and Clinton support working people, the Democratic party is second to the GOP for destroying the economy for the middle class and working class.

Until the Second Gilded Age is ended, the economy cannot recover. Roubini understands this effect. Our politicians deny these facts so they can get their campaign contributions. Meanwhile, the median income is $40,000

[ADVOCATE4ZPG]

01:53 PM on 09/10/2009

You have BRILLIANTLY(?) identified the core impetus of REPUBLICAN ideology. Republicans chafe when there is NO ONE beneath them which they can disdain--all their pseudo-Christian blathering notwithstanding!!!

[jeffp26]

11:10 AM on 09/10/2009

Roubini is a brilliant, honest, capable economist.

[jimrs]

01:36 PM on 09/10/2009

jeffp26:
Roubini made some predictions that have materialized. I remember the angry comments at
rgemonitor.com towards him. I was also fascinated by opinions that implied that the commenter
seemed to know what he was writing about ( a player in that field) & offering information while not revealing too much about himself. There was also the deference that was shown to some of the posters.

[wikwox]

10:32 AM on 09/10/2009

The mans not a politicians, as such he speaks the truth as he sees it and he has very good eyesight. If we're in "recovery" it is statistical only. I agree a barrage of bad news may be just around the corner, and yes! I still blame Wall St. and the politicians who let them get away with it.