On August 24, the Financial Times published an article by Nouriel Roubini, the economist nicknamed Doctor Doom. {He was nicknamed this after repeatedly predicting (quite loudly) the subprime meltdown and other ensuing problems ---- not that he was the only one-- there were lots of us in raw numbers even if we were in the vast minority }
To summarize:
1. Roubini expects things to bottom out by year-end
2. He believes that after after a couple of quarters of rapid growth driven by the restocking of inventories and a recovery of production, the recovery will be "anemic and below trend for at least a couple of years"
3. He points out that this is a crisis of both solvency and liquidity, but "true deleveraging has not begun yet because the losses of financial institutions have been socialised and put on government balance sheets. This limits the ability of banks to lend, households to spend and companies to invest."
4. Financial Institutions are severeley damaged.
To summarize:
1. Roubini expects things to bottom out by year-end
2. He believes that after after a couple of quarters of rapid growth driven by the restocking of inventories and a recovery of production, the recovery will be "anemic and below trend for at least a couple of years"
3. He points out that this is a crisis of both solvency and liquidity, but "true deleveraging has not begun yet because the losses of financial institutions have been socialised and put on government balance sheets. This limits the ability of banks to lend, households to spend and companies to invest."
4. Financial Institutions are severeley damaged.
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