Nouriel Roubini: Double-Dip Odds Now Greater Than 40%, GDP To Be 'Pathetically Lousy' (VIDEO)

If you're looking for signs that the U.S. economy is on the mend, you may want to steer clear of Nouriel Roubini's Twitter page.

The famed economist set off waves yesterday when he tweeted: "Q3 GDP growth very likely to be below 1 percent; and likely to be closer to 0% than to a pathetically lousy 1 percent. So double dip risk is now > 40 percent."

Roubini, who is the chairman of Roubini Global Economics and a professor at NYU's Stern School of Business, called into CNBC this morning to explain his statement.

The chances of a double-dip recession in the U.S. are now above 40 percent and second-quarter GDP growth will be revised down to an annual rate of 1.2 percent from the Commerce Department's July reading of 2.4 percent, Roubini said.

Based on the current data, third quarter growth will be well below one percent with growth closer to zero percent in the second half of 2010, he noted. Any recent improvements in the economy have come as a result of inventory adjustments rather than growth in final sales, Roubini added.

And there's hardly anything the Fed can do about it because they're "running out of policy bullets," Roubini argued. Fiscal stimulus programs that were "tailwinds in the first half of the year...are going to be essentially headwinds."

WATCH Nouriel Roubini on CNBC below:

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Comments

[JohnJAG]

05:38 PM on 09/05/2010

The world is changing. We are going to be competing with all of the world for scarce everything.
I suggest that we expand our service economy.
We should have the best schools, community health centers, and parks that our sweat can provide.
Buy American and vote 'yes' for schools and parks and 'no' for prisons and bombs.

[realitytrumpsbull]

02:48 PM on 09/04/2010

That's actually GREAT news, in one sense, because if all these folks that have made careers out of hitching their wagons to America's star, finally decide to take their business elsewhere, maybe our cost of living will return to where it was pre-globalizationizers. Plus, when the host dies, so do the parasites...maybe it'll help other countries get their ducks in a row, and start being a little more independent. 13 trillion in the red, run up by the folks out to do their global empire-thing...and now all the money's in the Caymans, or Switzerland, or elsewhere, somewhere in a steamer trunk 10 feet underground, or in some drug dealer's vault. Growthies!

[Whiteowl Whiteowl]

10:40 AM on 09/02/2010

The government should watch that what that the production part especially strategically important for the country didn't leave in other countries but it contradicts a free market and ideas of capitalism, it is necessary to choose or interfere with the market and to date production for creation of work places in the country, or to roll down by a socialism and half стрвны to plant on the grant and pension

That it is necessary to do that, if unemployment in the USA increases and fall consumption then and to produce in China or Asia it is not becomes favourable, and then it will be absolutely bad and not only to China and the USA and to the whole world

Excuse for my bad English language,

Iliya from
Sochi-Russia
http://greenphoto.ru/

[octaviosergio2]

05:18 AM on 08/30/2010

tell me what jobs is there that everyone is waiting for? for the last 10 years people were living good because they were borrowing from their homes not because of their wages. either wages need to go up or everything needs to be lowered down to pre 2000 level of cost of living and even that won't help much because back then there were jobs today all those jobs are gone.just read the labels of everything you own,those countries have your jobs we manufacture nothing.if you don't get your government to bring those jobs back we are going to be stuck in this rut for years.and then of course there is farming we can all go back to.

[changling]

08:17 PM on 08/29/2010

No double dip recession just the same dip dipping deeper. If our government does not start putting huge amoonts of money back into America via infrastructure (public works programs) and programs that will circulate more money here at home there will never be a recovery. All we will have to look forward to is watching our great country become not so great anymore. How could Americans bring down their own country? Ask Goldman Sachs and freinds. They're having a grand ole time. I here there next big deal is Trading Uranium? What another nightmare. It seems the robber barons have all lost there minds and sense of right and wrong and/or good and bad. Can't they do anything good and useful? All take and no give will even destroy them in the end. I hope someone comes up with the miracle we need and soon.

[Angel Lazo]

08:35 AM on 09/05/2010

I wholeheartedly agree! The premise for this supposed "double-dip" recession is that during the "dot com" and "real estate" booms we were doing well. Looking back this has been proven to be patently false and companies like Enron, Arthur Andersen, Worldcom, Tyco,B...ear Stern, AIG, and many others come to mind. If you have any doubts look at your stock porfolio over this period and check out your ROI. Those booms were a mirage. If it achieved anything, it was to transfer wealth from the poor and middle class to the rich via tax cuts.
Furthermore, these supposed boom periods got everyone excited about the stock market but little to show for it for those that planned on retiring today or in the near future. Now we're living the reality that is our real economy. We look around and little investment has been made in infrastructure, renewable energy, education in order to keep our country's competitive advantage.

Now many want a quick solution like the addict wants a fix. There are no easy solutions to this long term economic problem because the investments needed generate fruit in the long-run. This is not politically convenient for those seeking to stay in office. However, if we, the people, fixate ourselves in wanting a quick fix, then we will end up with another fake boom period concocted by clever politicians and their economist surrogates "all for the want of a horseshoe nail".

[diddleydee]

01:53 PM on 08/29/2010

Other than unfounded optimism, and military weapons what do we export?

[DFC1]

12:29 PM on 08/29/2010

The world is changing very quickly, now the world trade is recovery and now it is at similar levels than before the Great Crisis, and USA and most of the others developed countries (except Germany of course) are not driving the demand for the first time in the History, there is a huge shift in the economic and strategic balance in the world, and the emerging countries has developed enough critical mass to sustain the movement, so be ready for a big change in the next future

[angry expat]

12:23 PM on 08/29/2010

Non-story. Too many economists, not enough activists.

[LunaPark]

12:04 AM on 08/29/2010

Wow, greater than 40%, well lets just flip a coin. We can be just like Nourial.

[kizzie]

02:33 AM on 08/28/2010

Watch closely, my friends. When we reach the point of a total economic collapse, which is rearing it's ugly head as it is now showing signs of,, there will be another war instigated in any way they can do it.
The war machine is what they have always used to get things going again for the benefit of the war mongers--this time for Halliburton, KBR, and XE(blackwater) at the helm (as in Iraq).
I'm betting it will be Iran since they have been constantly in the news this week. But Pakistan will revolt against us, too. The whole Middle East will turn on us.
We may truly be at the end of life as we know it. WWIII will cause a disater that will not heal or solve anything but making money for the war empire.
As far as recession concerns, we never came out and probably never will for many many years to come.

[Thaigold]

03:00 AM on 08/29/2010

Many share your view, because there are many ways to get people back to work. Here are two of my favorites:

1. Start a massive investment in America. An Intra-state and national high speed rail system; tax supported research and development in the sciences; rebuild our aging infrastructure, i.e., roads, bridges and maybe the most important – fix our schools and allow a tertiary education to any qualified student, or;
2. By deceit and guile get another real war going. The prime candidate is the Middle East and it wouldn’t take much to set that place ablaze. Since the Persians and the Hebrews want to kick each other’s hind ends so bad, let ‘em at it. And since Tel Aviv is really just another NYC borough, guess who’ll be in the sand box with them? The USA of course.

Now both the above choices would cost about the same. The only problem is; the first would be branded socialism and un-American. The second one honorable and patriotic – you know the answer already.

[wendy31]

04:02 AM on 09/01/2010

We have this conversation all the time, our group of friends! We should be building, retrofitting, changing, researching....we'll just blow up more people instead.

[metaluna]

03:59 PM on 08/27/2010

Required viewing: Black Blizzard (airs on one of the History channels). Subtext: we had real leadership then.

[hawkny]

11:58 AM on 08/27/2010

Why is my natural gas service provided by a British owned company? I thought public utilities were sancro-sanc from foreign ownership as a matter of national security and public safety?

http://en.wikipedia.org/wiki/United_States_National_Grid

[Richard Waggy]

11:26 AM on 08/27/2010

A good article, but needs a context.

(1) One person's (intuitive) and a nation's economics (counterintuitive) work differently. Example: One person can bury $1 in a jar and it exists. With a nation that $1 doesn't exist. Conversely, $1 spent six times exists in six bank accounts in the money supply, or is $6. A dollar borrowed, spent 7 times in a year, taxed at 15%, gives 7 people $1, and the gov't $1.05 to pay the debt.

(2) That's how we owed 90% of GDP in '45, borrowed to educate GI's, the Marshall Plan, and owed 120% of GDP in '48. Again borrowed for Johnson's guns and butter, and had paid down the debt to 35% of GDP by '79. Since Reagan the debt rises, or somethings different.

Let's look. (3) Open a construction business. Borrow money, hire workers, buy materials and build a house. Burn the house and build another. Soon you, your workers and your nation are skilled, prosperous and happy. Thirty years later 3/4 of the debt has been paid. Except for being happy, this is like war (burning the house).

(4) Now, open a different construction business. Borrow money, cook the books and keep it. The debt comes due, but without incomes among the people there's no tax income. You print money to pay the debt. Soon inflation goes wild and your gov't goes broke. This happens when the gov't feeds the rich. This is what's been different under Reagan, Bush, Bush, Obama.

[DismayedRepub]

12:38 AM on 08/28/2010

One dollar buried in a jar will buy 50 cents worth of stuff when you dig it up.

[norkas]

08:25 AM on 08/27/2010

America will go through a great makeover because of the supreme court decision to allow companies to give NO LIMIT contributions to political candidates.

The middle class will be brought to there knees even worse then that are now and big business will control the most sensitive issue in America including national security and the criminal justice system.

The reason is simple they will go to a candidate and say we have $500,000 to $1,000,0000 or more for you or against you this is what we want. Of course there will be other benefits also.

Politicians are and will think of ONLY their rich future when they depart politics and the rewards they will receive quietly from business.

Things will get much worse before humanity reacts and get involved making there voices heard.

[jumpstart the economy]

06:51 AM on 08/27/2010

Time to think outside the box-

Ending the foreclosure & Unemployment Crisis
Quickly, Fairly and Cheaply

Millions of retirees and near-retirees have seen their retirement savings decimated by the recent stock market crashes. Many had been dreaming of buying a primary or second home. Why not let them realize their dream and jump start the economy at the same time?

Instead of borrowing from China and increasing our national debt, let those 50 and over withdraw their retirement savings TAX FREE if:
1. Funds are used to pay CASH for a primary or second home costing less than $500,000.
2. They must keep the home for at least 3 years or pay back the tax free incentive.

This would greatly reduce the foreclosure blight, put cash in the economy, increase consumer confidence and provide much needed employment as well as state and local real estate taxes. Taxes paid by the newly hired would more than make up for the tax incentive for seniors.