V-Shaped Dreams
Dr. Doom is back. His claim to fame is that he was one of the very few economists who accurately predicted the 2008 crash. (When I say "accurately predicted" I mean accurately not just in terms of timing, since there are x yahoos out there at any given time who predict the next month's next financial armageddon. But accurately in terms of the predicted mechanics of the collapse). Today, Roubini dissects the economy and summarizes what I fear is by now the economists' consensus: The recovery is at best U shaped, with a long flat line before we see take off again. Here is Ken Rogoff, making the same argument, and Christina Romer (Ex Chair of the U.S. Council of Economic Advisers).
There is also a lot of hoopla about the rapid recovery in Germany. German output roared ahead at a 9% pace during the second three months of the year. And as a result, we learn today, the euro zone economy grew by 1% in the quarter (not an annual rate), which was a better performance than either America or Japan turned in. A piece in the new edition of The Economist puts the burst of growth in the proper perspective: