Roubini at Ambrosetti Forum Italy (Video), Sees Stall Speed Growth

Nouriel Roubini  (NYU Professor/Roubini Global Economics) spoke with CNBC Europe Squawk Box before the Ambrosetti Forum in Italy. The view is from Villa D'Este on Lago di Como (Lake Como), Roubini Twitpic'd a better view. He still sees a 40% chance of a double dip recession. View the full 12 minute video below.

Today, the Labor Department reported that the economy lost 54,000 jobs, better than the 120,000 (economists) or 90,000 (wall street) loss expected. The unemployment rate rose to 9.6% (Aljazeera, Forbes). Also, Royal Bank of Scotland Plans to Cut 3,500 Jobs. Happy Labor Day people. Nice short covering today, $SPY closed at 110.91 +1.30%, see previous post for long and short term charts with moving averages. I parsed a few things from the video.

*Growth in the second half of the year will be worse than the first half, we'll reach a stall speed for the economy less than 1%.

*By second half of 2010: 1) Fiscal stimulus becomes a drag 2) Inventory adjustment ends 3) Tax breaks over (quantitative easing 2?).

*Stall-speed growth and financial market risks (stock market, credit market, bond market and interbank spreads) could feed the double dip scenario.

*Capex spending is only 10% of GDP, that cannot lift demand on its own and if there's not final sales and final demand, firms that already have excess capacity are not going to invest more".

*India and Brazil will grow faster than China next year.


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