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Taleb Says Geithner Bank Plan Is Too Limited, Will Fail. Roubini: Go Ahead, Keep Dreaming of That "V-Shaped" Recovery

Recs

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April 01, 2009 – Comments (2) | RELATED TICKERS: SDS , FAZ , SWHC

Two of my favorites speaking today.

 

Roubini: Go Ahead, Keep Dreaming of That "V-Shaped" Recovery Posted Apr 01, 2009 07:30am EDT by Henry Blodget

As we noted earlier, Nouriel Roubini of RGE Monitor actually has a surprisingly non-apocalyptic forecast for the economy: The first quarter of this year will mark the worst rate of decline, and the outlook will gradually improve from there.

We'll still be in a recession through 2009, says Roubini (in contrast to most economists, who think the economy will be growing nicely by Q4). But then, finally, the economy will begin to recover.

But what will this recovery look like?  Will it be the V-shaped rocket launch that some bulls are looking for?

No.

It will be an L-shaped slog, says Roubini.  The economy will grow at a depressingly slow rate for quite a while, and the stock market will tread water.  We may have seen the lows on the S&P 500 (or close to it) but that doesn't mean stocks will make you any money anytime soon.

 

2 Comments – Post Your Own

#1) On April 01, 2009 at 4:13 PM, awallejr (79.62) wrote:

I personally subscribe to Roubini's viewpoint mainly because I think this economy is more about a transformation off the aging of America than anything else.  The Real Estate bubble was the trigger. There really is no intrinsic justification for a V shaped recovery, aside from wishful thinking.  But an L shaped recovery is not necessarily a bad thing either, as long as we don't have runaway inflation down the road.

I have said many times we just need to get through this year to 2010 because by then the foreclosures should have bottomed to their worse.  And while foreclosures will still continue thereafter, year over year comparisons should start to improve. The only "kicker" in this is the Federal Government's interventions, which actually could drag out the process longer, or, if successful, shorten it.

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#2) On April 01, 2009 at 8:11 PM, InverseAbitETF (94.63) wrote:

Hi,

Frightingly enough, this zombie is doing better than my real profile. go figure.

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