‘Got nowhere to run to, baby, nowhere to hide’
Martha and the Vandellas
New York University Professor Nouriel Roubini (aka Dr. Doom) says the world’s developed and emerging economies are sliding into a deep recession. No country will escape the slump.
“We have for the first time in decades a global synchronized recession. Markets have become perfectly correlated and economies are also becoming perfectly correlated. This is not your kind of traditional minor recession,” Roubini tells Bloomberg.
Economic growth in China will slow to less than 5% in 2009, and the US will lose 6 million jobs, he says. And the US economy will expand 1% at most in 2010 as private spending falls as unemployment climbs to at least 9%, he adds.
“There is nowhere to hide,” says Roubini, reiterating his prediction that US financial losses will more than triple to $3.6 trillion and global equities will fall 20% in 2009 from current levels.
Roubini said the U.S. government should nationalize the biggest banks because losses will exceed assets, threatening to push them into bankruptcy. The banks could be privatized again in two or three years, Roubini said.