Roubini On Greece Debt Restructuring, Second Half US Growth, Euro (Bloomberg - 4/28/2010)

Nouriel Roubini (Prof at NYU, was on BloombergTV with Willow Bay on 4/28/2010. Here are a few key points he made about restructuring Greek debt, Euro-Zone contagion risk, potential double dips, the Euro and US growth in the second half of 2010 (+ the video). This just hit the wire: Greece Reaches Bailout Deal With EU, IMF - WSJ.

On Greece/Euro-Zone

*The problems of Greece are not solvable
*Greece is not just a case of liquidity it's a case of insolvency
*The fiscal adjustment required will be very hard to achieve
*IMF/EU plan will not work
*Cash will postpone the need for a debt restructuring for a real devaulation
*After Greece, Spain and Portugal are at risk (large budget deficits, public debt)
*Very highly likelihood that even if there's an IMF program, spreads will not narrow
*The debt of Greece is unsustainable and debt restructuring is unavoidable
*The debt restructuring can be postponed by 6-12 Months, market pricing in restructuring
*Rising risk of members pulling out of Euro-Zone, will weaken value of Euro
*Euro will be less of a reserve currency

On US Growth

*In the first half recovery will be more robust (3%) than second half of year (2%)
*In next two years US growth will be below trend, closer to 2%
*Fiscal policies are unsustainable, long rates could spikes which could put economy at risk
*Worried about double dip in Euro-Zone and Japan, Sees U-shaped recovery in US