The US Economy: Worst Economic Slump Since The 1930`s

Notwithstanding repeated attempts at monetary and fiscal stimulus since 2009, the United States remains mired in what is by far its worst economic slump since that of the 1930s.

More than 25 million working-age Americans remain unemployed or underemployed, the employment-to- population ratio lingers at a near-historic low of 58.3 percent

Business investment continues at historically weak levels, and consumption expenditure remains weighed down by massive private sector debt overhang left by the bursting of the housing and credit bubble a bit over three years ago. Recovery from what already has been dubbed the “Great Recession” has been so weak thus far that real GDP has yet to surpass its previous peak. And yet, already there are signs of a possible renewed recession. - in The Way Forward by Daniel Alpert, Robert Hockett, Nouriel Roubini

Nouriel Roubini is an American economist. He teaches at New York University's Stern School of Business and is the chairman of Roubini Global Economics.

Thoughts On The Occupy Wall Street Movement

My view of it is that it is a symptom of the economic malaise that we're facing not just in the United States, but all over the world. It started with the Arab Spring, and of course, poverty, unemployment, corruption, inequality eventually leads to people becoming restless. But now, you have middle-class people in Israel saying we cannot afford homes; you have middle-class students in Chile saying we don't have education; you have riots in London; people smashing Mercedes and BMWs of fat cats in Berlin and Frankfurt; you have an anti-corruption movement in India. It takes a lot of different manifestations, but we live in a world with a lot of economic insecurity, of worries about the future, of inequality, poverty, of concerns about jobs. And [Occupy Wall Street] is the manifestation in the U.S.

In 2009, [President Barack] Obama told the bankers, "I'm the only one who's standing between you and the pitchforks." The bankers got the bailouts; they were supposed to extend credit, extend mortgages. They did pretty much nothing, and they went back to the same actions as before: making money through trading. At this point, I think people are fed up with it. Rightly or wrongly, there's a huge amount of anger.



Nouriel Roubini is an American economist. He teaches at New York University's Stern School of Business and is the chairman of Roubini Global Economics.

You Need An EFSF That Is 4 Times As Large

You need an EFSF that is 4 times as large as the 440 (billion euros) to make sure that a bad equilibrium and a self fulfilling run on Italy and Spain doesn't occur," he said. "There's no plan for that, because politically even the first EFSF has not yet been approved, let alone to triple it or quadruple it. - in CNBC

Nouriel Roubini is an American economist. He teaches at New York University's Stern School of Business and is the chairman of Roubini Global Economics.

A Mild Or Severe Recession?

The question is not whether or if there is going to be a double dip, but whether it's going to be mild or severe with another financial crisis. The answer on that depends on the euro zone. - in CNBC

Nouriel Roubini is an American economist. He teaches at New York University's Stern School of Business and is the chairman of Roubini Global Economics.

Draghi Is In A Tough Spot

Mario Draghi may be forced to prove that he`s got anti-inflation cojones & thus not cut rates 2 days after he turns President even if the EuroZone is in recession. - in Nouriel`s Official Twitter

Nouriel Roubini is an American economist. He teaches at New York University's Stern School of Business and is the chairman of Roubini Global Economics.

The True Unemployment Picture

(The) unemployment rate, including discouraged & partially employed workers - is up to 16.5 percent. Including millions in jail it is over 20 percent now. - in Nouriel`s Official Twitter

Nouriel Roubini is an American economist. He teaches at New York University's Stern School of Business and is the chairman of Roubini Global Economics.

Trichet Leaves Giving A Finger To The Markets

Trichet leaves giving a finger to the markets, thus leaving to Mario Draghi the dirty job of doing the right thing at risk of pissing off Germans. - in Seeking Alpha

Nouriel Roubini is an American economist. He teaches at New York University's Stern School of Business and is the chairman of Roubini Global Economics.

Greece Must Exit The Eurozone And Return To The Drachma Rapidly

Greece is insolvent, uncompetitive and stuck in an ever-deepening depression, exacerbated by harsh and excessive fiscal consolidation. It is time for the country to default in an orderly manner on its public debt, exit the eurozone and return to the drachma to rapidly restore solvency, competitiveness and growth. - in EconoMonitor

Nouriel Roubini is an American economist. He teaches at New York University's Stern School of Business and is the chairman of Roubini Global Economics.

Karl Marx Had It Right

Karl Marx had it right. At some point, capitalism can self-destroy itself. That's because you cannot keep on shifting income from labor to capital without not having an excess capacity and a lack of aggregate demand. We thought that markets work. They are not working. What's individually rational ... is a self-destructive process. - in The WSJ

Nouriel Roubini is an American economist. He teaches at New York University's Stern School of Business and is the chairman of Roubini Global Economics.

Commodities In Bear Market Territory, Pricing Double Dip

Commodities S&P GSCI Index dropped 24 percent since April, signalling a bear market. Commodities starting to price double dip. - in Roubini`s Official Twitter

Related: SPDR Gold ETF (GLD), United States Oil fund (USO), IShares Silver ETF (SLV), Powershares DB Base Metals Fund ETF (NYSE:DBB)

Nouriel Roubini is an American economist. He teaches at New York University's Stern School of Business and is the chairman of Roubini Global Economics.

Gold: A Volatile, Unstable Risky Asset

Gold went to a high of 1920 to a low of 1520 last week only to rise back a modest 6% now. A most volatile, unstable, fickle & risky asset. - in Nouriel`s Twitter

Tickers, SPDR Gold Trust ETF (GLD)

Nouriel Roubini is an American economist. He teaches at New York University's Stern School of Business and is the chairman of Roubini Global Economics.

The Question Is: Will The Recession Be Mild Or Severe?

The question is, will the recession be mild or severe? We are running out of policy bullets. - in a panel discussion at the Bloomberg Dealmakers Summit in New York

Nouriel Roubini is an American economist. He teaches at New York University's Stern School of Business and is the chairman of Roubini Global Economics.

There`s Too Much Focus On Fiscal Austerity

There’s too much focus on fiscal austerity, which is important, but first you have to restore economic growth. - in a panel discussion at the European Forum of New Ideas

Nouriel Roubini is an American economist. He teaches at New York University's Stern School of Business and is the chairman of Roubini Global Economics.

EFSF I, EFSF II & EFSF III

EFSF I was 250 billion euros; EFSF II is 440 billion but isnt enough. EFSF III will have to be 2 Trillion euros plus to bailout Italy/Spain. - in Nouriel`s Official Twitter

Tickers: Ishares MSCI Italy Index (EWI), iShares MSCI Spain Index (ETF)

Nouriel Roubini is an American economist. He teaches at New York University's Stern School of Business and is the chairman of Roubini Global Economics.

What Policies Are Needed To Solve The Crisis

I wrote a paper recently in which I have an eight-point plan to highlight the kind of policies which are needed. One, much more monetary and quantitative easing, not just quantitative easing but credit easing. Two, short-term fiscal stimulus in the countries that can still do it. The US, UK, Germany, core of the Eurozone, Japan, it’s the periphery that’s doing fiscal retrenchment. You have to postpone the austerity.

In the short-run, we need fiscal stimulus. We need to provide massive amounts of lender-of-last-resort support to Italy and Spain to make sure that illiquid but solvent sovereigns do not have a self-fulfilling run. We need an orderly restructuring of the debt of governments, of banks, of households that are insolvent. We need to have a massive recapitalization of the European banks through a TARP (Troubled Asset Relief Programme) type of programme for the European banks. We need to support emerging markets by providing monetary and fiscal support to the countries that are going to get in trouble, and to provide support through the IMF and other international financial institutions. We have to provide credit to small and medium-sized enterprises and households that are squeezed. We need to have also an orderly exit of countries that are not going to regain competitiveness in the eurozone, like Greece and potentially also Portugal. And you have to do this in a clear, holistic and front-loaded way.

So there are many things that we need to do. I fear that the politicians in the US, in Europe, in UK are not going to have the political willingness to do it in their own countries, let alone coordinate it internationally. - in emerging markets magazine

Nouriel Roubini is an American economist. He teaches at New York University's Stern School of Business and is the chairman of Roubini Global Economics.

There Is A High Likelihood That There Is Going To Be Another Global Financial Crisis

In my view there is a high likelihood that there is going to be another global financial crisis. My data suggests that most advanced economies are already entering a recession. We’re not any more in an anaemic recovery, we’re not any more at stall speed. We’re at the beginning of a contraction. I think there’s a contraction already in most of the eurozone, there is a contraction in the US, also in the UK. That’s the first point.

The second point is we’re running out of policy bullets – monetary, fiscal – backstopping the financial system.

And third, the eurozone is a source of systemic risk. If there is a disorderly situation in the eurozone it’s going to be worse than Lehman.

At this point it’s not any more Greece or Ireland or Portugal. The contagion has spread to Italy and Spain. In the case of Italy and Spain the critical thing is that even if you believe that Italy and Spain are illiquid but solvent, even adjusting from the reforms, they’ve lost credibility in the markets. It’s going to take them at least a year to regain it.

Therefore you need a lender of last resort to backstop the sovereigns until they regain the credibility to avoid spreads going up and leading to a self-fulfilling run. And there are only a very few options, none of them feasible. One of them is the [eurobonds]. It’s going to take at least two years until they can pass that and it’s going to be approved by a treaty.

The other option is the ECB doing the dirty job. But the ECB constitutionally, legally, is not allowed to be a systemic lender of last resort for sovereigns.

The third option is to triple the EFSF (European Financial Stability Facility). But they’re not even able to pass the current extension of the EFSF. If tomorrow the Germans have to triple the EFSF, that is a political mission impossible.

So my worry is that the EFSF is going to run out of money and then there is not going to be a lender of last resort to backstop Italy and Spain. And that could be a source of a systemic break down of the eurozone, with global financial consequences worse than Lehman. - in Emerging Markets

Related, Financial Select Sector SPDR ETF (NYSE:XLF)

Nouriel Roubini is an American economist. He teaches at New York University's Stern School of Business and is the chairman of Roubini Global Economics.

High Likelihood Of Another Global Financial Crisis

There is a high likelihood that there is going to be another global financial crisis. - in www.advisorone.com

Nouriel Roubini is an American economist. He teaches at New York University's Stern School of Business and is the chairman of Roubini Global Economics.

The Latest Economic Data Suggests That Recession Is Returning To Most Advanced Economies

The latest economic data suggests that recession is returning to most advanced economies, with financial markets now reaching levels of stress unseen since the collapse of Lehman Brothers in 2008. The risks of an economic and financial crisis even worse than the previous one – now involving not just the private sector, but also near-insolvent sovereigns – are significant. - in Project Syndicate

Nouriel Roubini is an American economist. He teaches at New York University's Stern School of Business and is the chairman of Roubini Global Economics.

There Will Be Unrest In The US

"As we go into another recession, there will be unrest in the US." - in IB Times

Related: SPDR S&P 500 Index ETF (SPY)

Nouriel Roubini is an American economist. He teaches at New York University's Stern School of Business and is the chairman of Roubini Global Economics.

We Need Lower Interest Rates in Europe

We need lower interest rates in Europe. We need to lower the value of the euro. We need more fiscal resources. We need three times as much resources in Italy and Spain. - in Economic Times

Nouriel Roubini is an American economist. He teaches at New York University's Stern School of Business and is the chairman of Roubini Global Economics.

Thinking The Problems Of The Eurozone Are Going To Go Away Is Delusional

These shocks are going to keep on occurring. Thinking the problems of the Eurozone are going to go away is delusional. The risk is actually that there is going be deceleration and the beginning of an economic contraction. - in Economic Times

Nouriel Roubini is an American economist. He teaches at New York University's Stern School of Business and is the chairman of Roubini Global Economics.

"Operation Twist" May Worsen The Credit Crunch

Operation Twist may worsen the credit crunch as it will reduce banks' net interest margin . Unintended consequences...

Tickers: JP Morgan (JPM), Citigroup (C), Wells Fargo (WFC), Bank Of America (BAC), Goldman Sachs (GS), Morgan Stanley (MS);

Nouriel Roubini is an American economist. He teaches at New York University's Stern School of Business and is the chairman of Roubini Global Economics.

Do We Need Celestial Divine Intervention?

Yes, we now need celestial divine intervention as we are running out of policy rabbits... MERKEL SAYS SHE, POPE SPOKE ABOUT FINANCIAL MARKETS. - in Nouriel`s Official Twitter

Nouriel Roubini is an American economist. He teaches at New York University's Stern School of Business and is the chairman of Roubini Global Economics.

The Latest Economic Data Suggests That Recession Is Returning To Most Advanced Economies

The latest economic data suggests that recession is returning to most advanced economies, with financial markets now reaching levels of stress unseen since the collapse of Lehman Brothers in 2008. The risks of an economic and financial crisis even worse than the previous one – now involving not just the private sector, but also near-insolvent sovereigns are significant. - in Reuters

Tickers, ProShares UltraShort S&P500 ETF (NYSE:SDS), iShares MSCI Japan Index ETF (NYSE:EWJ), iShares MSCI Emerging Markets Index ETF (NYSE:EEM)

Nouriel Roubini is an American economist. He teaches at New York University's Stern School of Business and is the chairman of Roubini Global Economics.

QE3 Unlikely To Lead To Robust Asset Reflation

QE3 can't lead to robust asset reflation unless, like summer '10, macro news are positive. But as we double-dip surprises will be downside. - in Roubini`s Official Twitter

Nouriel Roubini is an American economist. He teaches at New York University's Stern School of Business and is the chairman of Roubini Global Economics.

The Benefits Of Long Flights: Quiet Reading

Benefits of long flights: quiet reading. I read the first 700 pages of Sylvia Nasar's Grand Pursuit on the flight to Johansburg. A must read book. - in Nouriel`s Official Twitter

Nouriel Roubini is an American economist. He teaches at New York University's Stern School of Business and is the chairman of Roubini Global Economics.

Greece Must Begin An Orderly Default & Return To The Drachma

Greece is stuck in a vicious cycle of insolvency, low competitiveness and ever-deepening depression. Exacerbated by a draconian fiscal austerity, its public debt is heading towards 200 per cent of gross domestic product. To escape, Greece must now begin an orderly default, voluntarily exit the eurozone and return to the drachma.

Nouriel Roubini is an American economist. He teaches at New York University's Stern School of Business and is the chairman of Roubini Global Economics.

We Are Entering A Recession

In August 0% jobs snd retail sales growth. September looks worse based on initial unemployment claims and other indicators. We are entering a recession. - in Roubini`s Official Twitter

Nouriel Roubini is an American economist. He teaches at New York University's Stern School of Business and is the chairman of Roubini Global Economics.

RTL Video: Euro Zone Crisis

Europe has been kicking the can down the road: RTL Video

Nouriel Roubini is an American economist. He teaches at New York University's Stern School of Business and is the chairman of Roubini Global Economics.

How Deep Will The Recession Be?

At this point the question is not double dip or not but rather how deep the recession will be: answer depends on policy response & Euro Zone crisis. - in Nouriel`s Official Twitter

Nouriel Roubini is an American economist. He teaches at New York University's Stern School of Business and is the chairman of Roubini Global Economics.

Retail Sales Unexpectedly Stagnate

Depressed consumers in a funk as jobs scarce, wages falling, double-dip coming. Retail sales in the U.S. unexpectedly stagnate. - in Roubini`s Official Twitter

Related: SPDR S&P 500 ETF (SPY)

Nouriel Roubini is an American economist. He teaches at New York University's Stern School of Business and is the chairman of Roubini Global Economics.

There Was No Income Growth In 15 Years

US yearly median household income at its lowest level since 1996. No income growth in 15 years as inequality at 1929 level. - in Roubini`s Official Twitter

Nouriel Roubini is an American economist. He teaches at New York University's Stern School of Business and is the chairman of Roubini Global Economics.