I bet you don't see Prof. Rogoff on CNBC anytime soon. He's about as bearish and chilling as one can possibly get, including our pal Roubini. And Rogoff's credentials are impeccable - ex-chief economist at the IMF, current Harvard professor. Just listen to the first 5 minutes or so, if you can bear it. A few highlights:
- This is a 'mammoth global recession'
- Banks in Europe have debts equal to 3-5x their national incomes and 'cannot possibly be guaranteed'
- "It's hard not to get angry" about the 'intellectual failures' of the recent 'gilded age' in which we thought 'the US is special and it can't happen here'
- This is a 'once in one hundred years' event
- Will be over in the US in 'four to five years', but wealth and living standards will be more like '20 years ago'
- We're 'driving down the tracks of a super-deep financial crisis'
- No one really knows what to do about it. The G-20 is still 'sorting things out'
- US unemployment will peak at 11-12%
- Housing won't hit a bottom for another 2 years
- Same with equities
- Expect large social and political changes starting next year, as folks realize 'how bad it is'. In "civil countries" (eg the US) this will be wrenching enough, but in others (China, Russia, Latin America...) there's the 'frightening prospect' that things could get 'very ugly'
Whew. Even I get bummed by all this, and I'm super used to it. If you're gonna watch the interview, do it in the evening with a stiff drink nearby, or some green tea, or some sedatives....
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