That means this century, not the 1920s, according to Professor Nouriel Roubini. He is sometimes described as ‘Dr Doom”, although he is not the first commentator to earn that title.
Here is a link to his latest comments as published in The Guardian newspaper:
What he says is evidence based and he is a professor at a top university in the US, so I am not going to dismiss his projections, although many people will: they are too unpleasant to contemplate. When the ancient Israelites heard Jeremiah’s projections, they decided it best to keep him out of sight underground and for 40 years, we are told, that seemed to have been a good call. No-one likes a sour-puss. But the story ends with a nation being wipe out.
But equally, I know that projecting the future based on what we know has happened in the past can be unreliable, so one might take a more positive view without being accused of ostrich like optimism.
However, investors need to remember that as recently as 20 years ago, we had awful stock market conditions for over 2 years (2000-2002) when a recession came on the heels of a stock market crash and markets fell back badly after a solid looking initial recovery.
I repeat my current mantra: buying equities has to be a very careful process at the moment and I for one am doing all I can to hedge out the risks of a serious recession. As I explained in my post yesterday (Monday mashup), the valuation of many shares is not currently based on an assessment of quality and likely dividend earnings, but in time, I believe reality will return to take control of market valuations.
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