Three friends and I went to a talk given by Nouriel Roubini at the Harvard Club. For those who don't know, Roubini is an economics professor at NYU who was acknowledged for predicting the once in a lifetime housing bust that would sink the economy into a deep recession.
His talk was about his outlook on the economy in the near future. Overall the feel was quite pessimistic. He felt that we were in a U-shaped recovery rather than a V-shaped recovery, and that the important question right now was when stimulus plans would be stopped and if too soon might lead to a W-shaped recovery.
He felt that drastic measures in policy were needed, but that even now, with the bust still fresh in our minds, the industry is already against such policy measures that would be needed.
He was also pessimistic about China, saying that too much of the growth is tied to investment and not consumption. He mentioned high end real estate and infrastructure that was being unused, and that Chinese people tend to save too much while Americans saved too little.
His view was that as stimulus winds down in the second half of the year, we will see that the economy will grow well below potential. He also mentioned that he expects unemployment numbers will continue to climb, as job growth will not be able to match employable population growth.
He sees similar slow growth in the Eurozone and Japan, but that emerging markets will continue to grow. However, emerging market growth will not make up for the advanced economies' lag.
Overall it was a good talk. He's a very good speaker and the talk was very well thought out and planned. I'm glad I went.
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