Friday, November 28, 2008

Dr. Doom strikes again

(New York Times photo)

Nouriel Roubini ruined my summer vacation.

It was the first weekend of a week in Maine, and I sat on the cabin deck reading the Sunday Times. When I got to the magazine, I was taken by an article about Roubini, a professor of economics at NYU, who had predicted in 2006 the ruinous recession we're facing today.

In August we had not yet seen the corporate bankruptcies, and the decline in consumer confidence that is now everyday news. We already experienced the collapse of a sketchy mortgage market, one that he predicted two years earlier.

I didn't sleep through the night for three days. I tossed sleepless to a chorus of frogs croaking, "Doom, doom, doom."

His recent predictions in Forbes of what he calls "'stag-deflation' -- a deadly combination of stagnation/recession and deflation," are both frightening and enlightening. He understands the economy at a level few academic or practicing economists seem to. He feels stag-deflation could literally pull the economy down into depression unless some "out-of-the-box" solutions are attempted is dense, sobering, harrowing and essential reading.

One hopes that some of Obama's economic team are reading Forbes.

It makes me want to go out on Black Friday and spend a few bucks to help unclog the credit clog.

If you want more of Roubini, on a daily basis in fact, you can subscribe to his daily RGE Monitor for free.

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