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Wednesday, 1 April 2009

Roubini: Go Ahead, Keep Dreaming of That "V-Shaped" Recovery

As we noted earlier, Nouriel Roubini of RGE Monitor actually has a surprisingly non-apocalyptic forecast for the economy: The first quarter of this year will mark the worst rate of decline, and the outlook will gradually improve from there.

We'll still be in a recession through 2009, says Roubini (in contrast to most economists, who think the economy will be growing nicely by Q4). But then, finally, the economy will begin to recover.

But what will this recovery look like? Will it be the V-shaped rocket launch that some bulls are looking for?

No.

It will be an L-shaped slog, says Roubini. The economy will grow at a depressingly slow rate for quite a while, and the stock market will tread water. We may have seen the lows on the S&P 500 (or close to it) but that doesn't mean stocks will make you any money anytime soon.

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