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Even 'Dr. Doom' Is Scared: Economy Much Worse Than Roubini Predicted

Posted Mar 02, 2009 01:35pm EST by Aaron Task in Newsmakers, Recession
Related: ^dji, ^gspc, QQQQ, DIA, SPY
Fed Chairman Bernanke raised eyebrows (and, briefly, the market) last week when said there's a "reasonable prospect" the economy will bottom this year and be in recovery in 2010.

But Berkshire Hathaway's Warren Buffett disagrees: The economy "will be in shambles throughout 2009 and...probably well beyond," the Oracle of Omaha declared this weekend.

In sum, Buffett and much of the rest of humanity are just now coming around to Nouriel Robuini's way of thinking, the economist known as "Dr. Doom" is upping the ante on his longstanding bearish views.

A year ago Roubini was forecasting an 18-month recession with a U-shaped recovery; now, he's now expecting the downturn to last at least 24 months and possibly 36-months. He also sees rising risks of a Japanese-style L-shaped stagnation, i.e. a prolonged period with little or no economic growth.

"I was one of most bearish people [but] the economy has surprised the bears on the downside," says Roubini of NYU's Stern School and RGE Monitor. "What's happening in the world now is scary."

Indeed, while the U.S. economy contracted 6.2% in the fourth-quarter, Roubini's main concern is economic activity in much of the rest of the world is in much worse shape. And while he is often critical of U.S. policymakers - including over the stimulus package, Fed policy and bank bailouts - Roubini says "the rest of the world is way behind the curve," in terms of doing the "right things" to confront the worst economic crisis since the 1930s.

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    aWriter Fri Jun 10, 2011 06:19 pm EDT Report Abuse
    It ain't gonna get really better, the economy, that is, until the pols quit fooling with it. While the stock market recovery was V-shaped, the recovery of the economy has been, and still is in housing and employment, U-shaped (today, 6-10-2011). Will the banks start lending? Are the poor saps waiting for D.C. to tell 'em what to do now? One of the reasons this econ. contraction has been so deep is that the gummint fiddled previous recessions so much that we sorta came out of them but not fully as we can see now. Do you notice that employment has come back more and more slowly after each gummint-fiddled recession? Do you really want the pols and the wonks in there fiddling?

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