George Soros: The U.S. economy is in for a "lasting slowdown"

[I AM NOT THAT GUY 5,715]

US Recovery Is Far Off, Banks Are 'Basically Insolvent': Soros

The U.S. economy is in for a "lasting slowdown" and could face a Japan-style period of relatively low growth coupled with high inflation, billionaire investor George Soros said on Monday.

Soros, speaking to Reuters Financial Television, also warned that rescuing U.S. banks could turn them into "zombies" that draw the lifeblood of the economy, prolonging the economic slowdown.

"I don't expect the U.S. economy to recover in the third or fourth quarter so I think we are in for a pretty lasting slowdown," Soros said, adding that in 2010 there might be "something" in terms of U.S. growth.

Soros' view contrasts with the majority of economists, who expect the U.S. economy to stop contracting in the third quarter and resume growing in the fourth quarter, according to the latest monthly poll of forecasts conducted by Reuters.

The recovery will look like "an inverted square root sign," Soros said. "You hit bottom and you automatically rebound some, but then you don't come out of it in a V-shape recovery or anything like that. You settle down—step down."

The healing of the banking system and housing markets is crucial to recovery. "The banking system, as a whole, is basically insolvent," Soros said.

What's more, the Treasury's Public-Private Investment Fund is going to work but it won't be enough to recapitalize the banks in a way that they are able to or willing to provide credit.

"What we have created now is a situation where the banks who will be able to earn their way out of a hole, but by doing that, they are going to weigh on the economy," he said. "Instead of stimulating the economy, they will draw the lifeblood, so to speak, of profits away from the real economy in order to keep themselves alive. This is the zombie bank situation."

The stress tests being conducted by Treasury could be a precursor to a more successful recapitalization of the banks, he added.

(more)

http://www.cnbc.com/id/30069223

[Ban Hammer 14,573]

considering soros supported obama's candidacy, he should be kicking himself right now.

[Pinocchio Liberal 268]

I I I just cant wait to be like europe.

[spookyturtle 9,466]

I I I just cant wait to be like europe.

Are they morons in Europe too?

[Pinocchio Liberal 268]

I I I just cant wait to be like europe.

Are they morons in Europe too?

Yep! just like you.

[spookyturtle 9,466]

I I I just cant wait to be like europe.

Are they morons in Europe too?

Yep! just like you.

You must have heard that one on the school bus?

[Pinocchio Liberal 268]

I I I just cant wait to be like europe.

Are they morons in Europe too?

Yep! just like you.

You must have heard that one on the school bus?

Failed.

[spookyturtle 9,466]

I I I just cant wait to be like europe.

Are they morons in Europe too?

Yep! just like you.

You must have heard that one on the school bus?

Failed.

I'm not surprised that you failed out of school. Maybe you could get your GED?

[justashooter 430]

soros has been an "America hater" for a long time.

[mawilson 2,133]

soros has been an "America hater" for a long time.

Doesn't mean he's wrong...