Dr. Doom's not-so-dire projections

by Sara Behunek

Famed economist Nouriel Roubini may be known as Doctor Doom, but his outlook for the course of the recovery is, in essence, no less dire than that held by Federal Reserve Chairman Ben Bernanke, who said on Tuesday -- one year after the collapse of Lehman Brothers Holdings Inc. -- that the "recession was likely technically over."

Speaking Tuesday evening at New York University's Money Marketeers event in downtown Manhattan, the NYU professor and chairman of consulting firm RGE Monitor stated that, "At worst, the recession would be technically over by the end of the year," and that for the next two quarters -- the third and fourth quarters -- the U.S. and other advanced economies would experience robust economic growth of 3% or more. Ultimately, Roubini (like Bernanke) expects the recovery to resemble a U-shape thanks to far-reaching government programs. (See Dealscape's Matthew Wurtzel's take on Roubini's alphabetical posturing here).

Rather rosy for Dr. Doom, no?

However, the timing of a technical end is not all that important, he claimed.

I think the key issue is not the question of whether recession is over today or over in three months or whether there'll be a couple quarters of high economic growth, but rather over the medium term, whether in the especially advanced economies, growth is going to be robust or whether there is a risk of a much more anemic recovery, or even the risk of a double dip.

Despite expected initial progress in the third and fourth quarters, Roubini thinks the recovery will hew closely to the latter. In funereal tone, he said that the process of climbing out of what some call the Great Recession would be arduous and specked with land mines, such as the threat of a premature exit of government programs -- or just as detrimental, a stalled exit. The current rally is not sustainable, he maintained, and the market would undergo a correction beginning in the fourth quarter. Following that, the economy would grow at a snail's pace of 1.5% for the next few years, with the euro zone and Japan lagging at 1%.

Overall, though, it is becoming increasingly clear that Roubini and his economic views no longer exist in the fray -- or perhaps everyone else has just imbibed a spoonful of doom.