Top of the News: “Dr. Doom,” economist Nouriel Roubini, was the only prominent economist to call the crash early. Lately, he had been seeing some signs that growth could return fairly soon and the risks of a depression have eased.
But his latest look at the stock market is cautionary. “The risk of a correction in the face of disappointing macroeconomic fundamentals is clear,” he wrote in the Taipai Times. “Indeed, recent data from the U.S. and other advanced economies suggest that the recession may last through the end of the year. Worse, the recovery is likely to be anemic and sub-par…”
Oil prices are rising too fast. Unemployment is growing and bank troubles have not been fully solved. The result: risks of a double-dip recession may be growing.
The Back Story: The credit-card crisis continues to bubble. The blog Zero Hedge reports on a Moody’s survey showing card charge-offs at a 20-year high, as Americans battle job losses, foreclosures, lost 401(k) values and too much debt. The pace of rising charge-offs is called “unprecedented.”
The question now is whether the banks can manage the problem, of whether it will turn into another cry for bailout. And don’t forget all those toxic assets — they’re still there, whatever “value” the banks attach to them.
Today’s Econ Haiku:
Will you drink more green?
Starbucks is counting on it
What a daily grind
Vote starting at noon on your favorite Econ Haiku of the week.