Sounds like we’re in for another downturn:
The U.S. economy has a “significant likelihood” of entering a double-dip recession if the government doesn’t step in to help the unemployed, economist Robert Shiller told MarketWatch News Break on Wednesday. Read more…
More than a few economists are suggesting a return to a recession due to bleak jobs outlook. From Huff Post:
the noted bear Nouriel Roubini, the president of RGE Monitor and a professor at New York University, delivered a grim prognostication via Twitter: “Risk of a double dip recession in advanced economies (US, Japan, Eurozone) has now risen to 40%.”
Roubini is not alone in his concern. Last week, David Rosenberg, the Gluskin Sheff economist (formerly of Merrill Lynch), whose words have become must-read barometers of bear-ishness, said that the chances of a double-dip recession in the U.S. are now “higher than 50-50.” Read more…
We’re in a Catch-22 situation. The outlook is bleak, because there are no jobs. Companies are holding their money and are not hiring because the outlook is bleak. The quickest way to break this cycle is to provide businesses with incentives to hire. The best thing the government can do at this point to spur job growth is to cut business taxes across the board, even if it’s for the short term. Provide tax reduction for companies that hire a minimum number of workers and keep them on for at least a 8 months. At the same time, the federal budget needs to be reduced. How about a 5% pay cut for federal workers, 10% for everyone in Congress?
Economy guru and professor at NYU, Nouriel Roubini gave a presentation in London, and basically said the worst is yet to come. Roubini, back in 2006, accurately predicted that the US will fall into a recession. Back in February, he predicted the financial market meltdown. Some quotes from the conference:
- We’ve reached a situation of sheer panic
- hundreds of hedge funds are going to go bust
- We’re seeing the beginning of a run on a big chunk of the hedge funds
- don’t be surprised if policy makers need to close down markets for a week or two in coming days
- This is the worst financial crisis in the U.S., Europe and now emerging markets that we’ve seen in a long time
- Things will get much worse before they get better. I fear the worst is ahead of us.
Read more from the RGE Monitor.