Nouriel Roubini is one of the handful of stars in this great downturn of the 21st century. He’s one of the few who called the top as well as how deep the economic slide would be.
In this article published yesterday in the Financial Times, he explains why he believes the risks are growing for a “W” recovery which would mean we’re likely headed for a double dip recession.
About half way through his article he mentions the wealth shock:
debt-burdened consumers face a wealth shock from falling home prices and stock markets and shrinking incomes and employment.
That’s a great way to explain what is going on…wealth shock. In part, this is what must be meant by the New Normal so many economists are talking about.