I have always liked the concept of prediction. Even the word itself is cool — “pre” means before and “diction” means to speak. So someone who predicts an event is literally “speaking before.”
But the problem with predictions is they are often wrong.
Ever since this recession began, I have been anxiously reading the opinions of financial experts regarding how long it will last. But unfortunately none of them seem to agree.
However, there is one man who appears to have a fairly good track record: Nouriel Roubini of New York University. In 2006, Roubini stated that we were on the brink of a worldwide recession, and everything he foretold has come to pass. People laughed politely when he talked about the future housing bust, unraveling of mortgage-backed securities, the credit freeze, insolvent investment firms and a massive spike in unemployment.
Roubini’s spooky accuracy made him an economic superstar, and it wasn’t long before his clothes got trendier and he started working the cable circuit. Today, the man still has plenty of naysayers, but I for one think he has a better handle on what’s to come than most.
So what does Roubini’s crystal ball tell us?
He believes that for a number of countries — the U.S. among them — the economy will bottom out at the end of the year.
That’s the good news. The bad news is that economists disagree on how the recovery will look. Some think we’re dealing with a V-shape, meaning we took a steep road down, and now will see a rapid return to growth. But others, including Roubini, believe we need to fasten our seat belts for the big U, which spells a long, weak trek upward. He also sees the danger of a possible W, or double-dip-recession, where a sharp downturn is followed by a small, temporary recovery.
While none of this is exactly cheerful, I take solace in the fact that whatever happens, we seem to be at, or near, the bottom. Even if the recovery is long and bumpy, it’s a lot better than the ride down. And I for one will take a slow, limping recovery over no recovery at all any day of the week.