Information Landmine

"The Americans keep telling us how successful their system is. Then they remind us not to stray too far from our hotel at night." - An un-named EU trade representative quoted during international trade talks in Denver, Colorado, 1997.

Monday, October 13, 2008

Peeking out from behind your hands...

Legendary doomsayer/clairvoyant Nouriel Roubini says that, with a bit of good old fashioned government stimulus and some luck, we might just avoid global disaster:

While most of the economic and financial damage is already done and the global economy will not be able to avoid a painful recession, financial and banking crisis (i.e. the V-shaped short and shallow 6-month recession is now out of the window and we will experience a severe and more protracted 18 to 24 months U-shaped recession) the rapid and consistent implementation of these and other action will prevent the US, European and global economies from experiencing a systemic financial meltdown and entering in a more severe L-shaped decade long stagnation like the one experienced by Japan after the bursting of its real estate and equity bubble.

This may not sound like much to write home about, but keep in mind that Roubini has been both incredibly pessimistic and pretty much right so far - as a friend put it in an e-mail "we know the credit crisis is entering a wild phase when the time lag between Roubini making a prediction and it coming true collapses" - and you can maybe start to breathe half a sigh of very slight relief.


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