Double Dip Recession: Roubini comment
A recent comment by 'Dr Doom' Professor Roubini on possibility of a 'double dip' recession appeared in the Financial Times.
For another viewpoint, watch this Forbes StreetTalk video interview.
The likelihood of a V-shaped recovery does seem a remote one, though current sentiment suggests otherwise.
As many analysts have put forth, a prolonged weak recovery is suggested by the following factors:
- weak earnings growth from demand slack (what next after the restocking exercise? see Economist article)
- inflation threat from earlier pump priming (is another asset bubble on the horizon?)
- possible further losses from commercial mortgage defaults (refer to research article1 & article2)
Will it be a U or W? It could still be too early to tell. But I suppose a certain level of prudence to temper the bullish fervour does no harm.
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