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Hedge fund legend Julian Robertson said Friday he expects the U.S. economy is heading for a "doozy of a recession."
"I think we are going to have a doozy of a recession," Robertson told CNBC's Erin Burnett. "I think the credit situation is worse than anybody realizes, and...I think we're getting little inklings of that. I don't think any of the normal indicators you would look at in the economy are really very strong. As a matter of fact, they are weak, and not really getting any better."
Robertson, founder of the investment firm Tiger Management, also expressed some concerns about the devaluation of the dollar.
"I think the Federal Reserve will trash the dollar until such times that there is some turn around in the economy, or until such time that they see that as self defeating," he said.
"I don’t mean to imply that this is going to last quite as long as what’s been happening in Japan, but when they went into their decline in 1990, almost 20 years ago, their people were loaded with savings—but [Americans are] all broke," he said. "...If we leave out the home in the calculations, I’d say that 80-85 percent of Americans are broke. So they have to cut back on their spending."
UPDATE / Editor: We have been informed by someone who works with Ron Insana at CNBC that much of the Julian Robertson attributions and quotes in this story are not authentic. While the basic thrust of the article appears genuine -- i.e., the future economic outlook appears bleak -- the wilder attributions and quotes are bogus.
There's controversy over the reporting of comments by Julian Robertson on CNBC. Reader Rahul Sharma kindly sent in links to the video and some detail of the actual vs reported cleft.
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.
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.
Ladies and Gentlemen,
Your next summit takes place in a few days in London; but are you aware that you have less than a semester to prevent the world from plunging into a crisis that will take at least a decade to resolve, accompanied by a whole series of tragedies and ferment? Therefore, this open letter by LEAP/E2020, who saw the arrival of a « global systemic crisis » as early as three years ago, intends to briefly explain why it happened and how to limit further damage.
If indeed you began to suspect the onset of a sizeable crisis less than a year ago, LEAP/E2020, in the second issue of their « Global Europe Anticipation Bulletin » (GEAB N°2), anticipated that the world was about to enter into the « trigger phase » of a crisis of historic proportions.
GEAB (LEAP 2020)