Nouriel “Dr. Doom” Roubini Says Recession May Continue Until End of 2010

Links for This Post:

Dr. Doom by Stephen Mihm, New York Times August 15, 2008

Roubini Says Recession May Continue Until End of 2010 By Cherian Thomas Bloomberg March 6,2009

NY Economist Nouriel Roubini predicts that the current economic crisis will continue until the end of 2010. You might dismiss his as yet another guess in babel of opinions and predictions heard in the midst of the current financial mailaise.

But if you read the profile of Roboni linked above, which was published last summer before the worst of the crisis became apparent, Roboni practically invented the current Great Depression Redux. Here is what Stephen Mihm says in his profile of the professor:

On Sept. 7, 2006, Nouriel Roubini, an economics professor at New York University, stood before an audience of economists at the International Monetary Fund and announced that a crisis was brewing. In the coming months and years, he warned, the United States was likely to face a once-in-a-lifetime housing bust, an oil shock, sharply declining consumer confidence and, ultimately, a deep recession. He laid out a bleak sequence of events: homeowners defaulting on mortgages, trillions of dollars of mortgage-backed securities unraveling worldwide and the global financial system shuddering to a halt. These developments, he went on, could cripple or destroy hedge funds, investment banks and other major financial institutions like Fannie Mae and Freddie Mac.

Does the scenario that Roubii describes soud familar? If so, what does the good Professor suggest?

According to the Bloomberg story linked above;

“Governments are falling behind the curve,” Roubini said at the India Today Conclave in New Delhi today. “This recession can end up becoming even worse.”

The situation can be improved by appropriate policies, including governments taking over insolvent banks, cleaning them up and re-selling them to private investors, he said. The Group of Seven and the Group of Twenty economies “must act together to get out of this mess,” Roubini said.

Perhaps the Republicans might take a cue tom the musings of the man nicknamed Dr. Doom.