Nouriel Roubini: we are in recession

“Bloomberg on the Economy” recently spoke to Nouriel Roubini, the oft-quoted NYU finance professor. He believes the U.S. is now in recession and that a global slowdown is in the offing. There are several other countries in recession or poised for recession. I suggest you listen to the podcast or read the transcript in full. Below is a part of what he has to say. He is not especially upbeat.

ROUBINI: We are in a recession in the United States. And a year ago I said that the combination of the biggest housing bust in the last 50 years, the current credit crunch, and how low prices are going to lead to recession.

I believe we’re already in a recession in the United States, and now there are significant signs of slowdown, if not contraction, in a number of other countries. One, inflation is rising throughout the world. We are in a situation of stagflation lite.

KEENE: When we’re in that and we can see that and we report on it every day, say in Europe that’s confronting oil where it is or other nations, let’s go to these emerging markets. Is the scope and scale of China slowing down? Is it single digit where they go from 11 percent to 10 or to 9, or could it be a larger slowdown?

ROUBINI: I imagine it could be a larger slowdown because right now what’s happening is that the U.S. is in a recession, Japan sure enough is going to be in a recession, a good third of Europe is going to be in a recession, U.K., Spain, Italy, Ireland, Portugal. Canada is in a recession, New Zealand is in a recession. Some of these European countries already contracting.

So, we’ve many major economies that are slowing down. And therefore, the trade links and the financial links that China and India and the other emerging markets cannot decouple from this U.S. and global economic slowdown.

It’s going to take time. Right now inflation, with pressures because of overheating of this country is still the most important factor. But they’re now facing even the other side of the problem from inflation rising, but downside risk to economic growth throughout emerging markets. So that’s the worst of all worlds.

Economist Roubini Says U.S. in Recession (Transcript), Bloomberg News 27 Jun 2008