Nouriel Roubini is once again painting a darker view of the coming year than many of his contemporaries.  While he is on board with the thinking that the recession is bottoming out this year, he sounds a warning over the possibility of a "double-dip recession."  In a must-read piece in the Financial Times, he outlines reasons that recovery will be at best a U-shaped recovery--though he hints at a W-shape.  Here are the first three of his seven reasons:

Employment is still falling sharply in the US and elsewhere – in advanced economies, unemployment will be above 10 per cent by 2010. This is bad news for demand and bank losses, but also for workers’ skills, a key factor behind long-term labour productivity growth.

Second, this is a crisis of solvency, not just liquidity, but true deleveraging has not begun yet because the losses of financial institutions have been socialised and put on government balance sheets. This limits the ability of banks to lend, households to spend and companies to invest.

Third, in countries running current account deficits, consumers need to cut spending and save much more, yet debt-burdened consumers face a wealth shock from falling home prices and stock markets and shrinking incomes and employment.

Read The Risk of a Double Dip Recession is Rising here.