"Doomin' Aint Easy"
Love Doctor Nouriel Roubini made an appearance on CNBC Europe this morning, where the anchors are apparently not bound by contractual optimism. At the 2:40 mark, the CNBC anchor said he was "sick of all the green-shoot talk" and thanked Roubini for coining the phrase 'yellow weeds' instead. Enjoyed that. Meanwhile, GE executive, John Rice weighed in last Friday on the supposed economic turn.
From Bloomberg:
“I am not particularly of the green shoots group yet,” Rice said today to the Atlanta Press Club, referring to a phrase used by Federal Reserve Chairman Ben S. Bernanke that described signs of a nascent recovery. “I have not seen it in our order patterns yet. At the macro level, there may be statistics suggesting the economy is starting to turn. I am not seeing it yet.”
“We see a world where good companies and good consumers can’t get all the credit we would like,” Rice said. “Companies with lots of cash on their balance sheet are worried about whether they will get what they need for working capital” and are cutting spending.
“Until that changes I don’t think you will see a significant rebound,” Rice said. “We are preparing for 12 or 18 months of tough sledding.”
Back to the Roubini interview summarized by CNBC:
"I see even the risk of a double-dip, W-shaped recession… towards the end of next year," Roubini told "Squawk Box Europe."
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"Oil could be closer to $100 a barrel towards the end of this year, this could be a negative shock to the economy," he said, adding that other dangers come from long-term interest rates and big budget deficits.
In the next few months, unemployment may reach 11 percent in the US and around 10 percent in Europe.
Because of bad macroeconomic data and poor earnings prospects as companies have weak pricing power and demand is still subdued, the surprises will be on the downside, he said.
"That's why I believe there's going to be a significant market correction for equities, for commodities and even for credit," Roubini added.
He said recovery signs should come from unemployment, housing, industrial production, sales and consumption data.
"When I look at them I see so far still more yellow weeds than green shoots. They have to bottom out, in my view they haven't bottomed out. This recovery, unfortunately, because of the debt overhang… is going to be a very weak economic recovery, in my view," he added.
