FT.com / Comment / Opinion - The risk of a double-dip recession is rising - The Diigo Meta page

• 28 Aug 09
  

  Gary Myers
• 24 Aug 09
  

  Colin Henderson

  doubledip Roubini recovery crisis economy

• 

  John L. Keenan III

  Nouriel Roubini on the shape of a recovery"/><meta name="keywords" content="Company_News,Corporate_Finance,Economic_Indicators,Economic_News,GDP_&_GNP,Global_&_International_Economics,Industrial_Production,Production,Recession_&_Recovery,Restructuring,Strategy"/><title>FT.com / Comment / Opinion - The risk of a double-dip recession is rising</title><script type="text/javascript

  Roubini-doubledip

• 

  T. Rex Bean

  roubini 2009 recession

• 

  mingh88

  finance

• 23 Aug 09
  

  marstallerhellinger
• 

  W21st NYC

  Roubini false dawn credit crisis

  • In the fourth quarter of 2008 and first quarter of 2009 the rate at which most advanced economies were contracting was similar to the gross domestic product free-fall in the early stage of the Depression.
  • There are several arguments for a weak U-shaped recovery. Employment is still falling sharply in the US and elsewhere – in advanced economies, unemployment will be above 10 per cent by 2010.
  • 9 more annotations...
  • • Second, this is a crisis of solvency, not just liquidity, but true deleveraging has not begun yet because the losses of financial institutions have been socialised and put on government balance sheets.
    • Third, in countries running current account deficits, consumers need to cut spending and save much more, yet debt-burdened consumers face a wealth shock from falling home prices and stock markets and shrinking incomes and employment.
    • Fourth, the financial system – despite the policy support – is still severely damaged.
    • Fifth, weak profitability
    • Sixth,
    • Seventh,
    • There are also now two reasons why there is a rising risk of a double-dip W-shaped recession.
    • But if they maintain large budget deficits, bond market vigilantes will punish policymakers.
    • Another reason to fear a double-dip recession is that oil, energy and food prices are now rising faster than economic fundamentals warrant, and could be driven higher by excessive liquidity chasing assets and by speculative demand.

Would you like to comment?

Join Diigo for a free account, or sign in if you are already a member.