Based on my best judgment, it is most likely that the unemployment rate will peak close to 11% and will remain at a very high level for two years or more.
Some economists are predicting a unemployment rate peak of 13%.
Roubini is calling for bold action.
There's really just one hope for our leaders to turn things around: a bold prescription that increases the fiscal stimulus with another round of labor-intensive, shovel-ready infrastructure projects, helps fiscally strapped state and local governments and provides a temporary tax credit to the private sector to hire more workers.
In past global slowdowns, the United States invariably led the way out, followed by Europe and the rest of the world. But for the first time, the catalyst is coming from China and the rest of Asia, where resurgent economies are helping the still-shaky West recover from the deepest recession since World War II.
While Roubini warns on oil price increases breaking any potential recovery, we note China's robust growth is causing oil prices to rise.
We've all heard of the term Stagflation and there is more than one analyst wondering about inflation due to global governments printing money, Roubini is sounding more alarm bells on deflation.
It appears he is not alone in this prediction, Emmanuel Roman, head of GLG one of the biggest hedge funds, is saying the same thing.
25% TO 30% of the world's 8,000 hedge funds would disappear "in a Darwinian process", either going bust or deciding meager profits are not worth their efforts.
This will go down in the history books as one of the greatest fiascos of banking in 100 years
Roubini is saying 500 hedge funds will fail within months and calculating out Roman, that would be 2000 to 2400 hedge fund failures.
The New York Times has a biography on Nouriel Roubini.
Roubini is one of the Cassandras of the financial and housing crisis from 2006, when no one would listen.
According to the article, after Roubini gave a talk on the housing bubble the response was:
The audience seemed skeptical, even dismissive. As Roubini stepped down from the lectern after his talk, the moderator of the event quipped, “I think perhaps we will need a stiff drink after that.” People laughed
What explains Dr. Doom's perceptions is his international economics background and the particular study of domestic economies financial collapses:
The title is a quote from Roubini, economist. I love it, yup, that's right, workers get corporate machinations from hell (often called free trade) while the super rich and institutions get socialism!
They note so far his predictions about the financial crisis (when most were singing a happy tune) have been dead on accurate, so they interview Roubini for further predictions.
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