AUTHOR: Economist Nouriel Roubini, a.k.a. Dr. Doom
OUTPUT: A Forbes column qualifying as "EXHIBIT A in why Nouriel Roubini is the pre-eminent Dr. Doom, and all of the other doomsayers play second fiddle."
FINDER: Joe Weisenthal of Business Insider, author of above quote
WHAT, ACCORDING TO ROUBINI, IS CURRENTLY 'ARIS[ING]': "An unstable disequilibrium"
AS OPPOSED TO: Presumably, a stable disequilibrium. Or an unstable equilibrium. Or death (see below).
WHAT THIS WILL DO: "Tip the economy into a double-dip recession"
ECONOMICS 101 MEETS 2010: "The unemployment rate climbs, the budget deficit widens because of automatic stabilizers, home prices keep falling, bank losses are much larger and protectionist pressures come to a boil."
DEPRESSED YET? "Stock markets could sharply correct, and credit and interbank spreads could widen as risk aversion increases."
THE 'REAL ECONOMY,' THE 'FORMAL DOUBLE DIP,' AND FURTHER ECONOMIST LINGO BELONGING EITHER IN THE WRITINGS OF HEGEL OR ON THE DANCE FLOOR:
A negative feedback loop between the real economy and the financial system could easily tip the economy into a formal double dip: The real economy reaches a near-stall speed and risky asset prices correct downward, leading to a negative wealth effect, a higher cost of capital and reduced business, consumer and investor confidence.
JOE WEISENTHAL'S BEMUSED RESPONSE:
We've read that like 5 times, and we're still not sure exactly what it all means, except that with terms like "unstable disequilibrium" and "negative feedback loop" and "formal double dip" it sounds pretty horrible.
This article is from the archive of our partner The Wire.