Dr. Doom Says We're Screwed

Nouriel Roubini, a/k/a "Dr. Doom," went on Bloomberg TV to make his latest predictions about the world's economy:

We’ve reached a stall speed in the economy, not just in the U.S., but in the euro zone and the UK. We see probably a 60 percent probability of recession next year, and, unfortunately, we’re running out of policy tools.....and sovereigns cannot bail out their own distressed banks because they are distressed themselves.

(Emphasis mine.) At the Ambrosetti Forum in Italy, Roubini said in an interview with CNBC that the situation is worse that 2008, that this time there is fiscal austerity and that banks "are being cautious."

Business Insider says Roubini has been predicting a double dip recession for four years, however, and adds:

Remember, this is the traditional summer doldrums, and markets are still reeling from the unprecedented downgrade of the U.S. debt by S&P, black swans flocking in Europe certainly has only added to the market turmoil and volatility. So it is logical to see some mixed and somewhat pessimistic data coming out of this current environment, but they are not indicative enough to extrapolate out a recession.

They go on to remind us that 2012 is an election year and that "the Fed, the Obama Administration, and the Democratic Party will pull out all the stops to stave off a downright recession." But I wonder if the Fed belongs on that list.

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posted by rdbrewer at 09:57 AM

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