Roubini: Forget The V-Shaped Recovery…But Get Ready For The U-Shaped Recovery!
Courtesy of John Carney and William Wei at Clusterstock
Nouriel Roubini used to be known Dr. Doom. These days, however, he insists he is a "realist."
What does that mean? Well, it means that he doesn’t think we’re in for a V shaped recovery but he doesn’t think we’re going L shaped either.
Appearing on CNBC’s Squawk Box this morning, he said we’re headed for an anemic, U-shaped recovery. Why not a V? Here are his reasons:
- 1. Labor market is still awful, labor income and consumption down.
- 2. U.S. consumer is shopped out; they save more, consume less.
- 3. Corporate sector- glut of capacity. Utilization is 69%
- 4. Financial system is damaged, credit growth is limited, can’t finance residential investments
- 5. Fiscal stimulus will be a drag, and lead to crowding out of product spending
- 6. Overspending countries like U.S. are now spending less, and oversaving countries like China, Japan, Germany are not increasing their private domestic consumption to compensate for falling U.S. demand.
See Also:
Roubini: Stocks Will Tank When The Recovery Comes In Weak
Roubini: Equities To Fall 20%, 6 Million Jobs Lost (VIDEO)
Roubini: Nationalizing Banks Is The Best Way To Go
