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When will the recession end?
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www.theatlantic.com/doc/200907/roubini.jpg)
We all know that the recession we are in is not going to last forever. The question being asked in cocktail parties all across the country is, when do you think we’ll get out of this?
Folks, the man known as Dr Doom, Nouriel Roubini, is predicting 2011. Roubini, an economist from the Stern School of Business of New York University, made headlines when it was clear he more accurately assessed the state of our economy than Federal Chairman Ben Bernanke. As Bernanke told the congressional Joint Economic Committee in March of 2007 “The impact on the broader economy and financial markets of the problems of the subprime market seems likely to be contained,” and “The weakness in the housing and in some parts of manufacturing does not appear to have spilled over to any significant extent to other sectors of the economy,” Roubini was publishing a paper which didn’t include the rosy picture drawn by Bernanke. Nouriel was writing that the declining housing market was nowhere near its bottom, that its decline would be the worst in decades and that every part of the economy would likely be affected. As early as September of 2006, Nouriel predicted a recession and a global “hard landing.”
Roubini is now more optimistic, and is overall supportive of the Obama Administrations financial policies. He is hoping that the government temporarily nationalizes the banks that are insolvent to prevent them from becoming zombie banks, as was the case in Japan for so many years.
Aside from his prediction that the recession will cease in 2011, he adds a caveat that it will be very difficult to find a delicate balance in withdrawing some of the liquidity that was given to banks so it won’t create another bubble or inflation.
