Sunday, December 27, 2009, 9:29PM ET - U.S. Markets Closed.

Don't Believe the V-shaped Recovery Hype! Economist Behravesh Says

Posted Sep 28, 2009 04:53pm EDT by Heesun Wee in Investing, Healthcare Information, Recession, Banking, Housing
To hear money managers like Peter Schiff and Marc Faber talk, it's all gloom and doom (capitalism is dying) or a rocket ride to a V-shapred recovery (think bear-turned-bull Jim Grant.)

Forget the hype on both ends of the spectrum, says our guest Nariman Behravesh, chief economist at IHS Global Insight. "We are in a recovery," Behravesh says. "But in the early stages, it's going to be a very modest recovery, very slow growth."

Behravesh sees U.S. unemployment eventually surpassing 10 percent, consumer spending scaled back, and more paying-down of debt -- all economic headwinds. A slow economic recovery eventually will gain steam, but don't expect 3 percent to 4 percent growth until the end of 2010 -- at the earliest, Behravesh said. 

What really worries the economist? America's mountain of debt, and we’re talking well beyond the short-term stimulus spending. Rising Medicaid and Medicare costs loom large over the U.S. economy. "We have to deal with those to get our debt under control," he says.

228 Comments

Yahoo! Finance User
Yahoo! Finance User - Monday September 28, 2009 04:58PM EDT

I don't.

Judy L.
Judy L. - Monday September 28, 2009 05:00PM EDT

No, its not! There are 3 million people homeless and here in Florida homes are selling at a bottom prices in some sections of the state. Also construction in some areas has come to a standstill. New shopping centers are unoccupied and projects half completed stand unfinished in weed growing lots. Sure they tell us it's better. Better for the thieves who put us here but not fMr. & Mrs. America. Whoever they are don't need to tell us what to think good or bad...we can make up our own minds. jkl

EDWARD N
EDWARD N - Monday September 28, 2009 05:07PM EDT

WHy doesn't anyone care? Spend , spend. But we keep on reelecting them. We are just getting what we deserve.

MW
MW - Monday September 28, 2009 05:07PM EDT

The economic problems of the U.S. have been over 30 years in the making and will take a long tiome to unwind. It really took off with the huger Reagan deficit spending and 'outsourcing' of U.S. jobs. A service economy cannot sustain a country, despite what trickle down republicans tell you.

dick
dick - Monday September 28, 2009 05:07PM EDT

The recovery will not be V shaped; more like a WWWWWWW

Samuel
Samuel - Monday September 28, 2009 05:09PM EDT

IDONTAGREE ITS A RECOVERY!!!! Obamas and Backus say that there will be up to a 25000.00 fine if you dont buy insurance or 1 year in jail see at huffpostblog.com That ridicules!!!!!!

MW
MW - Monday September 28, 2009 05:11PM EDT

Economic prosperity comes from only 3 sources.... mining/drilling exports, farming exports and manufacturing exports. We have lagged in 2 of the 3 for 30+ years. We have been living off the built up wealth of the industrial revolution and the status as a world military power after WWII. Timne to pay the piper.

Samuel
Samuel - Monday September 28, 2009 05:13PM EDT

we will get a V shape recovery if the government shuts up and leaves us to make money, If they see us recovering they will do something to STOP IT

MW
MW - Monday September 28, 2009 05:13PM EDT

To gain our competetive advantage back, we need either a new product or a new manufacturing advantage. Think of the assembly line and model-T. Lowering energy costs will help. Solar energy beamed from satalites , combined with robotics, could be the key to making the U.S. the lowest cost place to manufacture.

Doctor
Doctor - Monday September 28, 2009 05:14PM EDT

Glad I'm not 10 years old. They are the ones going to pay their entire lives for this mess. Eskimo's have it right. Live in an Igloo, it cost nothing and there aren't any property taxes!

MW
MW - Monday September 28, 2009 05:16PM EDT

Talk to your children, talk to your neighbors. Don't complain but think of solutions. Pay down your debt. Most of the $ taken in the subprime loans WERE taken by middle class people buying Upper class houses. This problem was not brough to a head by 'poor' people.

Yahoo! Finance User
Yahoo! Finance User - Monday September 28, 2009 05:16PM EDT

American Monetary Institute www.monetary.org

MW
MW - Monday September 28, 2009 05:20PM EDT

Where were the TeaParty crowd when we spent $1 Trillion on war over the last 7 years? Where was the TeaParty crowd when we spent $2 Trillion on the banks under Bush?

danny
danny - Monday September 28, 2009 05:20PM EDT

This idiot still thinks unemployment is below 10%.

MW
MW - Monday September 28, 2009 05:23PM EDT

Glenn Beck has absolutly NO training in any economic or political realm. Ask him a detailed question and he either has to change the topic or lie. How do we fix the problem, not whine about imaginary "good old days"

Islandboy
Islandboy - Monday September 28, 2009 05:24PM EDT

another economist, this time an H1B imported one from India haha!

james b
james b - Monday September 28, 2009 05:25PM EDT

banks are still buying congressmen, , with our money! great reforms coming, where from ? can't get rid of the crooks they still get elected, time to load up yet? dam got to get a loan so i can buy some shells

Gary
Gary - Monday September 28, 2009 05:26PM EDT

Remember folks!!!!!!!!!!!! stock prices have very little or NOTHING to do with the economy.Its fear and greed and greed is "back in the saddle"

Terry
Terry - Monday September 28, 2009 05:26PM EDT

Printing money at the FED and giving it to Wall St. is not a Bull market make it only delays the inevitable. Have you all noticed the rallies are with lower and lower volume a sure sign of manipulation. Octoberfest is coming so drink a lot of beer and be happy.

Yahoo! Finance User
Yahoo! Finance User - Monday September 28, 2009 05:29PM EDT

As all of them he know nothing and he will tell what he will be payed for

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