Nouriel Roubini, the doctor doom of the credit crunch, sounds a mildly optimistic note in an interview with the Washington Post:
“I don’t believe we are going to end up in a near-depression. Six months ago I was more worried about an L-shaped near-depression. Today, after the very aggressive policy actions taken by the U.S. and other countries . . . we are, instead, in the middle of a U.”
The thing that my economist friends say they worry about now is a W recession. The theory goes that the economy will rebound and start to grow again but because the financial system hasn’t been fixed that recovery will soon peter out and there will be a slide back into recession.