Nouriel Roubini : The
IMF is expecting three more years of recession in Greece most
likely you will have recession in Spain in Portugal in Italy and
the question is political again : can you afford have several years
of recession and deflation there may be at some point a backlash
against it three of these countries have also lost competitiveness
in the last few years , they are losing market shares to China and
Asia because their exports are labor intensive then for a decade
their wages are growing faster than the productivity , and the
final nail in the coffin was the appreciation of the Euro between
2000 and 2008 , so even if they stabilize their public debt how are
they going to reduce their larger currency deficit..., it is going
to be ugly in terms of fiscal austerity in terms of structural
forms in terms of anemic growth if not recession therefore there is
money on the table but it is all conditional on doing very painful
sacrifices , I feel that some countries like Greece are not going
to be able to do it , that eventually they are going to have a
restructuring of public debt .....
Credit markets have recovered, although they still reflect
massive government financial intervention. The financial panic of
2008 and 2009 has passed, though now bank failures are notably
increasing. The net worth of the Federal Deposit Insurance
Corporation is dropping, and estimates for its deficit are growing,
but its obligations are ultimately U.S. Treasury obligations.
Average house prices seem to be stabilizing, but commercial real
estate prices are dropping. Huge losses from the deflation of the
great twenty-first-century bubble have been recognized or realized,
and though more remain, financial markets have regained their
appetite for risk.