Nouriel Roubini (blog: Roubini Global Economonitor) has a great article in Forbes online on why the recession is not going away anytime soon. The short answer: No savings and a pile of debt.
This week's news about October retail sales (-2.8% relative to the previous month and now down in real terms for five months in a row) confirm that the U.S. has entered its most severe consumer-led recession in decades. At this rate of free fall in consumption, real gross domestic product growth could be a whopping 5% negative or even worse in the fourth quarter of 2008. And this is not a temporary phenomenon: Almost all of the fundamentals driving consumption are heading south on a persistent and structural basis.
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