KRUGMAN: ECONOMY IN PURGATORY

Stephanapoulos sensibly asks: Is the stock market suffering from irrational exuberance? Krugman avoids a direct answer instead he argues that we are neither in heaven or hell. Reich adds that it is merely getting worse more slowly. Watch This weeks has no transcript.

Neither is bright enough to mention the effect of the rise in the price of oil. BUT Roubini does:

Roubini said another reason to worry is that energy, food and oil prices are rising faster than fundamentals warrant, and could be driven higher by speculation or if excessive liquidity creates artificially high demand.

He said the global economy" could not withstand another contractionary shock" if speculation drives oil rapidly toward $100 per barrel. U.S. crude oil futures traded Friday at about $73.83.