Comments on: AEI Subprime VI: Roubini Presentation http://housingdoom.com/2009/10/30/aei-subprime-vi-roubini-presentation/ "He who defends everything defends nothing." - Frederick the Great Thu, 11 Mar 2010 07:03:24 +0000 http://wordpress.org/?v=2.9.1 hourly 1 By: twist http://housingdoom.com/2009/10/30/aei-subprime-vi-roubini-presentation/comment-page-1/#comment-21097 twist Sun, 01 Nov 2009 03:08:42 +0000 http://housingdoom.com/?p=5103#comment-21097 I'm still wondering though how he can predict an upcoming crash and a u-shaped recovery. I would think that an extended flat line would be the best possible outcome given the current economic climate. I’m still wondering though how he can predict an upcoming crash and a u-shaped recovery. I would think that an extended flat line would be the best possible outcome given the current economic climate.

]]> By: toysarefun http://housingdoom.com/2009/10/30/aei-subprime-vi-roubini-presentation/comment-page-1/#comment-21096 toysarefun Sun, 01 Nov 2009 02:14:04 +0000 http://housingdoom.com/?p=5103#comment-21096 It comes back slower every time, especially jobs, currency more diluted, or debased, and it costs more for stuff. I like Nouriel, he's not really a doomster, he's a global economist. It comes back slower every time, especially jobs, currency more diluted, or debased, and it costs more for stuff. I like Nouriel, he’s not really a doomster, he’s a global economist.

]]> By: malthus http://housingdoom.com/2009/10/30/aei-subprime-vi-roubini-presentation/comment-page-1/#comment-21094 malthus Sat, 31 Oct 2009 17:14:05 +0000 http://housingdoom.com/?p=5103#comment-21094 In the typical V-shaped recovery investment, capex [captial expenditure] spending grows much faster than GDP. That’s why you have a "But this time around I don’t think there’s going to be any robust growth in capex spending, leaving aside even housing that is in the doldrums. And the reason is very simple. Capacity utilization in the United States today is 70 percent. Capacity utilization in the Eurozone is 70 percent. Is the lowest we’ve had in decades in any recession. Capacity has to be at least 80 / 85 percent before you see any pickup in investment." "[U]nless the over-saving countries compensate for the reduction in spending of the over-spender by reducing their own savings rate and increasing their own domestic private spending, then globally, where you have a glut of capacity — and that glut of capacity is becoming bigger, because now China is doing another round of capital intensive over-capacity investment." The effect of this massive "over investment" (which is actually capital misallocation) is to position China as the low-cost producer throughout the recession. This will be a dragon (sic) the domestic labor market, which will take a long time to recover and then only at lower or stagnant wage rates. As I have said for many months, this will be a "W" (Dubyuh) shaped recession ending with a permanently lower living standard for North Americans. In the typical V-shaped recovery investment, capex [captial expenditure] spending grows much faster than GDP. That’s why you have a “But this time around I don’t think there’s going to be any robust growth in capex spending, leaving aside even housing that is in the doldrums. And the reason is very simple. Capacity utilization in the United States today is 70 percent. Capacity utilization in the Eurozone is 70 percent. Is the lowest we’ve had in decades in any recession. Capacity has to be at least 80 / 85 percent before you see any pickup in investment.”

“[U]nless the over-saving countries compensate for the reduction in spending of the over-spender by reducing their own savings rate and increasing their own domestic private spending, then globally, where you have a glut of capacity — and that glut of capacity is becoming bigger, because now China is doing another round of capital intensive over-capacity investment.”

The effect of this massive “over investment” (which is actually capital misallocation) is to position China as the low-cost producer throughout the recession.

This will be a dragon (sic) the domestic labor market, which will take a long time to recover and then only at lower or stagnant wage rates.

As I have said for many months, this will be a “W” (Dubyuh) shaped recession ending with a permanently lower living standard for North Americans.

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