Roubini: Most Severe U.S. Recession In The Last 50 Or 60 Years...

Nouriel Roubini was recently interviewed by Maria Bartiromo for her Business Week (link to the full article in the BW). Maria Bartiromo is the "anchor" of CNBC's Closing Bell, too.

Roubini's piece of article at RGE Monitor: http://www.rgemonitor.com/roubini-monitor/255056/business_week_roubini_interview_with_maria_bartiromo

Here's the most important of where we are and what the outlook may be, according to Roubini:

We are looking at the most severe U.S. recession in the last 50 or 60
years, both in terms of length and depth. Every piece of economic news that's
come out in the last few weeks and months has been much worse than expected,
from employment, holiday sales, capital spending by the corporate sector, the
continued collapse of residential real estate, and a weakening even of the trade
balance, so the rest of the world is also contracting.

....

The only positive news I see is that the policy response, both in the U.S.
and in other countries, is going to be quite aggressive. But in my view, that
policy stimulus is going to have most of its effects in 2010. And the cost of
issuing a huge amount of public debt will be trillion-dollar budget deficits
this year and next, which eventually is going to have a crowding-out effect on
private demand. So either we issue a huge amount of public debt to finance it,
and that's going to push up interest rates, or we print a lot of money that
eventually is going to be inflationary and again damaging to the economy. We
have no choice but to have an aggressive policy response, but it's not a free
lunch.

......

The U.S. has been living in a situation of excesses for too long. Consumers
were out spending more than their income and the country was spending more than
its income, running up large current-account deficits. Now we have to tighten
our belts and save more. The trouble is that higher savings in the medium term
are positive, but in the short run a consumer cutback on consumption makes the
economic contraction more severe. That's the paradox of thrift. But we need to
save more as a country, and we have to channel more resources to parts of the
economy that are more productive. And when you have too many financial engineers
and not as many computer engineers, you have a problem.

Well, he was EARLY and RIGHT about the crisis coming, at some stage he may fail too, unfortunately ...