Nobel Prize Winner Calls Markets ‘Irrationally Exuberant’
Joseph Stiglitz, who won the 2001 Nobel Prize in Economic Sciences, has come out to say that investors are “irrationally exuberant” about recovery given US unemployment, which he believes will continue to rise.
His perspective on “big bumps” ahead includes the still-weak housing market, commercial real estate, and too much consumer debt considering the current level of joblessness.
According to a survey of economists conducted by Bloomberg News, the unemployment rate is likely to hit 10 percent by the end of 2009. Stiglitz considers it “pretty clear” that any economic growth this year or next will not be able to “stop unemployment from growing.”
Stiglitz joins other skeptics of the current recovery including billionaire George Soros and New York University Professor Nouriel Roubini who sees the recovery as “not rapid and V-shaped, but more like U-shaped.” Additional details are available from this Bloomberg piece on America’s slow economy.