THE BASIS POINT

Roubini: Global Recession Throughout 2009. U.S. Needs $700b Stimulus. Where’s He Investing?

NYU economics professor and RGE Monitor chairman Nouriel Roubini continues to beat his recession drum. During a recent interview (video), he said that the global economy, including all developed and emerging nations, will experience a severe global recession that will last all of 2009. Click here for more on this. He also said that the U.S. would need $700b billion stimulus for the broader economy—this in addition to the $700b TARP program that he says needs to be used to re-capitalize banks. When asked where he would invest he said: Cash, Government Bonds and Treasury Inflation Protected Securities.

He’s someone who predicted this economic situation back in 2004 when people thought he was crazy. His book at the time, Bailouts or Bail-Ins: Responding to Financial Crises in Emerging Markets, was about how emerging markets get themselves into trouble by being debtor nations and how they can possibly avoid this. He had said the U.S. behaves like an emerging market economy and it could lead to trouble. On the book’s jacket, top White House economic advisor and former Treasury Secretary Lawrence Summers is the first testimonial.