Light At The End Of The Tunnel …
By Nouriel Roubini
I was interviewed on Tuesday on CNBC’s “Squawk Box” on my views on the economy, the stock market, the problems with the banks, the Geithner plan and whether there’s light at the end of the tunnel.
As I pointed out in the interview, the rate of economic contraction will slow from the -6% of the first quarter to a figure closer to -2%. And next year the economic recovery will be so weak–growth below 1% and the unemployment rate peaking at 10%–that it will still feel like a recession even if we may be technically out of it. So, compared with the bullish consensus that sees positive growth at 2% by the third and fourth quarters of this year and a return to potential growth by 2010, my views are consistently more bearish.
Still, compared with the sharp contraction in U.S. and global growth in the first quarter of this year, the rate of economic contraction will slow down for the U.S. and other advanced economies by year-end. That is only a mild improvement in what is still a severe U-shaped recession, with a very weak and tentative recovery by 2010.
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