Nouriel Roubini Predicts Worst Recession In 50 Years
This morning, Nouriel Roubini, a former Treasury Department director under the Clinton Administration and head of Roubini Global Economics in New York, talked with Bloomberg’s Carol Massar about the U.S. economy. Dr. Roubini, who predicted the current financial crisis back in 2006, said:
I expect it to be the worst U.S. recession in the last 50 years. I expect a cumulative fall in output from a peak of 4% and an unemployment rate going all the way to 9%…
There’s a major credit crunch, and firms are having a credit crunch. They cannot borrow, households cannot borrow, and the credit crunch has gone from subprime, to near prime, to prime, to commercial real estate, to credit cards, to auto loans, to student loans, to leveraged loans, to corporate bonds. It’s just a massive credit crunch. It doesn’t matter what the Fed does…
We need something like a $300 to $400 billion fiscal package to be voted today…
Giving essentially $50 billion of low interest rate loans to automakers is a way to help them… there are about 2 million jobs directly/indirectly related to the auto industry… We have no choice…
Home prices have to fall at least another 15%. The cumulative fall in home prices from the peak is going to be at least 40% to bring them back to the historical norm. So this housing recession is just getting worse. People are not buying homes, housing starts are collapsing, building permits are collapsing. It’s a vicious circle, and there’s no bottom to it.
You can view the 6 minute 30 second Bloomberg interview here.
Source:
Nouriel Roubini Interview
Bloomberg, November 19, 2008
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