[lbo-talk] Roubini

Doug Henwood dhenwood at panix.com
Wed Jan 7 18:15:22 PST 2009


On Jan 7, 2009, at 8:54 PM, SA wrote:


> Sorry for digging this up from the archives, but I just want to put
> this on record: I think Roubini is crazy if he thinks unemployment
> will peak at 9%. I would be shocked if it didn't get into double-
> digits.

The latest from Reinhart & Rogoff:

<http://www.economics.harvard.edu/faculty/rogoff/files/Aftermath.pdf>

says you're probably right. An average of 7 point increase in unemployment in the wake of financial crises, which would take us to about 11.5%. I bet we hit 7% on Friday, meaning we're less than halfway there. They also find an average 9% decline in per capita GDP. We're close to the average price declines in houses and stocks (around 35% and 50% resp), but not in time (3-4 years - we're at 1 on stocks and 2.5 on housing). This is running at least through 2009.

Doug



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