Wednesday, October 22, 2008
The US economy is entering a two-year recession that will be longer and deeper than previously feared, said Nouriel Roubini, a well-known economist and professor at New York University.
“I believe we’re going to have two years of negative economic growth,” Roubini said on CNBC. “The last two recessions lasted only eight months each … This time around this is going to be three times as long, three times as deep. This is going to be the worst recession the US has experienced since the 1980s.”
A slowdown in global economic growth combined with continued problems in credit markets and housing will haunt the economy, Roubini said.
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In addition, he sees hundreds of hedge funds getting wiped out, combining with earnings to provide another weight on stocks.
“I believe that the worst is still ahead of us. I think that the next few weeks and months are going to be negative surprises on the economy,” he said. “I think that overall the earnings are going to surprise to the downside.”