From npr:

Economist Nouriel Roubini talks to host Guy Raz about the prospects for an economic recovery. Roubini, famously dubbed "Dr. Doom" for his pessimistic forecasts, says we may be on the upswing, but things could go south again. Roubini also praises Fed Chairman Ben Bernanke's stewardship and has endorsed him for another term.

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Where is the US and global economy headed? Last year, there were two sides to the debate. One camp argued that the recession in the US would be V-shaped—short and shallow. It would last only eight months, like the two previous recessions of 1990-1991 and 2001, and the world would decouple from the US contraction.

Others, including me, argued that given the excesses of private sector leverage (in households, financial institutions and corporate firms), this would be a U-shaped recession—long and deep. It would last about 24 months, and the world would not decouple from the US contraction.

Today, 20 months into the US recession—a recession that became global in the summer of 2008 with a massive recoupling—the V-shaped decoupling view is out the window. This is the worst US and global recession in 60 years. If the US recession were—as is most likely—to be over at the end of the year, it will have been three times as long and about fives times as deep—in terms of the cumulative decline in output—as the previous two.

Today’s consensus among economists is that the recession is already over, that the US and global economy will rapidly return to growth and that there is no risk of a relapse. Unfortunately, this new consensus could be as wrong now as the defenders of the V-shaped scenario were for the past three years.

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CNBC - Roubini: Risk of Double-Dip Recession Not Quite Past Yet (Click for the Report and Video)

The world economy still risks a double-dip recession if oil prices rise toward $100 per barrel and if huge U.S. government debts frighten investors, Nouriel Roubini, professor of economics and chairman of RGE Monitor, told CNBC. [7:31]

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CNBC - Dr. Doom Duel (Click here for Video)

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Today we take a look at which countries have best weathered the global recession and credit crunch. All economies have been affected by the crisis, but a combination of policy responses and strong fundamentals has given some countries, especially some emerging market economies, a relative edge. These same strengths could lead the countries we highlight below to perform better as the global recovery begins, even if their growth rates remain well below 2003-2007 trends.

What commonalities are visible among these countries?  One major theme is that they tended to have lower financial vulnerabilities due to more restrictive regulation and less developed financial markets, as well as larger and stronger domestic markets that sustained domestic demand. Moreover, they had the resources to engage in counter-cyclical fiscal and monetary policies, actions that were not possible in past crises. In contrast, countries that borrowed heavily to finance domestic consumption in the days of easy money are now facing sharp economic contractions.   Despite the relative strength of these countries, however, their ability to return to sustained growth will depend on structural reforms that support consumption.

Latin America

A couple countries in Latin America have thus far been able to weather this crisis better than their neighbors.  Brazil and Peru stand out for their relatively healthy fundamentals and financial systems.  Both countries have benefitted from being relatively closed economies and from having diversified export markets and products.  They also took advantage of the boom years (2003-2008), reducing external vulnerabilities and increasing savings (fiscal and international reserves).  By the time the crisis hit, both countries had well regulated financial systems that saved them from being contaminated by toxic assets.  The fact that their domestic credit markets are at an early development stage (so consumption is not very dependent on credit) helped them shelter internal demand.  Finally, these countries enjoyed strong policy credibility.

Brazil

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Check out the following reports from Nouriel's speech at a mining conference in Kalgoorlie, Australia:

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Coinciding with this week’s release of RGE Monitor’s updated 2009/10 Global Economic Outlook, here we present an overview of our European Economic Outlook, including the Nordics, the Baltics and Central and Eastern Europe. Previous newsletters addressed RGE’s U.S. outlook, the outlook for China, and Japan.

The full version of the European outlook, available to subscribers, includes the following sections:

-          Is the Worst Over? Clues from Industrial Production and World Trade

-          Potential Output, Potential Growth and Output Gap

-          Inflation or Deflation?

-          Fiscal Policy

-          Credit Market Conditions

-          The European Banking Sector

-          Sovereign Risk Watch: Ireland

-          Sovereign Risk Watch: Greece

-          Private Consumption and Labor Markets

-          Power Shift Back to Nation States?

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From The New York Times:

LAST week Ben Bernanke appeared before Congress, setting off a discussion over whether the president should reappoint him as chairman of the Federal Reserve when his term ends next January. Mr. Bernanke deserves to be reappointed. Both the conventional and unconventional decisions made by this scholar of the Great Depression prevented the Great Recession of 2008-2009 from turning into the Great Depression 2.0.

Mr. Bernanke understands that in the Great Depression, the collapse of the money supply and the lack of monetary stimulus during contractions worsened the country’s economic free fall. This lesson has paid off. Mr. Bernanke’s decision to keep interest rates low and encourage lending has, for now, averted the L-shaped near depression that seemed highly likely after the financial collapse last fall.

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6/26/09 - CNN - Fareed Zakaria's GPS Program on CNN: Recession's End Near? (Click here for Video)

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7/22/09 - Nightly Business Report, PBS - NYU Professor Nouriel Roubini's Outlook on the Economy

Transcript from PBS:

Wednesday, July 22, 2009

SUZANNE PRATT: Joining me now with his thoughts on health care and the economy is Nouriel Roubini. He is the economics professor at NYU's Stern School of Business, who forecasted the housing bubble way before everyone else. Professor Roubini, welcome back to NIGHTLY BUSINESS REPORT.

NOURIEL ROUBINI, ECONOMICS PROF., NYU STERN SCHOOL OF BUSINESS: Pleasure being with you tonight.

PRATT: I want to start with health care. What do you think if there is health care reform and we see something in the near future, it's likely to do to economic recovery in this country?

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The global recession may end towards the end of 2009 rather than sooner and the global recovery in 2010 will be anemic and well below trend as leveraged and income/profit-challenged households, firms and financial institutions are constrained in their ability to borrow, lend and spend. Meanwhile a perfect storm of persistently large fiscal deficits and public debt accumulation, monetization of such deficits that will eventually increase expected inflation, rising government bond yields, soaring oil prices, weak profits, still falling jobs and stagnant growth has inched a little closer on the radar of this cloudy global economic outlook. It’s a storm that could blow the recovering world economy back into a double-dip recession by late 2010 or 2011. It doesn’t have to come to pass. But it is getting more likely unless a clear exit strategy from the massive monetary and fiscal stimulus is outlined even before it is implemented once a more sustained global recovery is achieved.

After rising sharply for three months, asset markets in the mature economies have paused and started a tentative correction in the last few weeks. Risk investors that had driven up prices have partially taken profits, and suddenly they are wary. They are right to be wary.

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