World Economy: Recession Well into 2010, say Dr. Doom & IMF
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New York, 19 Mar. A sustained recession, frozen banks, and rising unemployment are likely to keep the US and many other countries in recession. Dr. Roubini, also known as Dr. Doom, is the NYU professor who predicted the current crisis and he says this is probably going to last into 2010.
New York, 19 Mar. A sustained recession, frozen banks, and rising unemployment are likely to keep the US and many other countries in recession. Dr. Roubini, also known as Dr. Doom, is the NYU professor who predicted the current crisis and he says this is probably going to last into 2010.
Just a few days ago, US Federal Reserve Chairman Ben Bernanke said it would start revering before 2009. “We are in the 15th month of a recession,” Roubini told CNBC. “Growth is going to be close to zero and unemployment rate well above 10 percent into next year.”
He added that there was “no hope for the recession ending in 2009 and will more than likely last into 2010.” Part of the solution, Roubini said, was to break “every mortgage contract.” He said the US economy is suffering from “a death by a thousand cuts” and that “”most of the U.S. financial institutions are entirely insolvent.”
“The market friendly view for the banks is nationalization,” he added, as part of the remedy. “Temporarily take over the banks, clean them up and get them working again.”
Just how bad could it become in the US? “We could end up … with a 36-month recession, that could be “L-shaped stagnation, or near depression,” Roubini said.
EconomyWatch correspondent Vladimir Gonzales added, “Roubini forecast a recession a few years ago and people laughed. They aren’t laughing anymore. Either way, his opinion is in stark contrast to Bernanke’s recent announcement. But it’s Bernanke’s job to inspire confidence in the masses, so I would put more weight in what Dr. Doom has to say.”
Things don’t look so good for the UK, either. The IMF predicts that it too, will last into 2010, even shrinking by 0.2%. Gordon Brown had hoped for economic recovery by Christmas.
