Doctor Doom is getting more and more bearish.
In a brutal interview with Foreign Policy, Nouriel Roubini described growing problems in every major economy:
So everything is suggesting that we are already at slow speed and now with a 10 per cent market correction, the wealth effects, and the widening of credit spreads can make that worsening of business, consumer, and investor sentiment even worse. And that’s in United States.
In the eurozone periphery, five countries are already in a recession: Greece, Ireland, Portugal, Italy, and Spain. Three of them have lost market access, and at this point, the chances that Italy and Spain are going to lose market access are very high. And Italy and Spain are “too big to fail,” or too big to be bailed out. The United Kingdom has had flat economic activity for three quarters. Japan had a double dip and is going to recover just because of the [post-Fukushima] reconstruction for a few quarters.
And now the kind of forward-looking indicators like global PMI [private mortgage insurance] suggest there is also a massive slowdown in the growth of the countries that were growing very fast: China, India, emerging markets, and those countries like Australia that were growing because of their resource orientation. The outlook to me looks very bleak.
Last night on Bloomberg Roubini agreed with the downgrade while dismissing the timing as meaningless: “They can blame the market volatility for the downgrade, but in reality US did contribute to the debt crisis.”
This morning Roubini tweeted jokes from his retreat in Maine: “S&P on a fishing expedition: a Maine fishing lake divides a AA+ country (US) from a AAA one (Canada) http://yfrog.com/h2w8jcyrj”