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Tuesday, October 14, 2008

Roubini Sees Worst Recession in 40 Years

by Calculated Risk on 10/14/2008 02:57:00 PM


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Roubini Sees Worst Recession in 40 Years (Source: Bloomberg)

From Bloomberg: Roubini Sees Worst Recession in 40 Years, Rally's End
Nouriel Roubini, the professor who predicted the financial crisis in 2006, said the U.S. will suffer its worst recession in 40 years, causing the rally in the stock market to ``sputter.''

``There are significant downside risks still to the market and the economy,'' Roubini, 50, a New York University professor of economics, said in an interview with Bloomberg Television. ``We're going to be surprised by the severity of the recession and the severity of the financial losses.''

The economist said the recession will last 18 to 24 months, driving unemployment to 9 percent, and already depressed home prices will fall another 15 percent.
``The stock market is going to stop rallying soon enough when they see the economy is really tanking,'' Roubini added.