Monday, June 13, 2011

Roubini, Nouriel Roubini, Roubini Perfect Storm

Nouriel Roubini (born 29 March 1959) is an American professor of economics at New York University's Stern School of Business and chairman of Roubini Global Economics, an economic consultancy firm. After receiving a BA in political economics at Bocconi University, Milan, Italy and a doctorate in international economics at Harvard University, Cambridge, Massachusetts, he began academic research and policy making by teaching at Yale while also spending time at the International Monetary Fund (IMF), the Federal Reserve, World Bank, and Bank of Israel. Much of his early studies focused on emerging markets. During the administration of President Bill Clinton, he was a senior economist for the Council of Economic Advisers, later moving to the United States Treasury Department as a senior adviser to Timothy Geithner, who is now Treasury Secretary.

In 2008, Fortune magazine wrote, "In 2005 Roubini said home prices were riding a speculative wave that would soon sink the economy. Back then the professor was called a Cassandra. Now he's a sage". The New York Times notes that he foresaw "homeowners defaulting on mortgages, trillions of dollars of mortgage-backed securities unraveling worldwide and the global financial system shuddering to a halt". In September 2006, he warned a skeptical IMF that "the United States was likely to face a once-in-a-lifetime housing bust, an oil shock, sharply declining consumer confidence, and, ultimately, a deep recession". Nobel laureate Paul Krugman adds that his once "seemingly outlandish" predictions have been matched "or even exceeded by reality." As Roubini's descriptions of the current economic crisis have proven to be accurate, he is today a major figure in the U.S. and international debate about the economy, and spends much of his time shuttling between meetings with central bank governors and finance ministers in Europe and Asia. Although he is ranked only 512th in terms of lifetime academic citations, he was #4 on Foreign Policy magazine's list of the "top 100 global thinkers." He has appeared before Congress, the Council on Foreign Relations, and the World Economic Forum at Davos. Read More

Roubini’s Crystal Ball Forecasts…Much More Doom!
If you hated 2008, really deplored 2009, and felt similarly awful about 2010 and 2011, then you’re really, really going to dislike 2013, said NYU professor and noted doomsayer Nouriel Roubini in a recent interview with Bloomberg.

Roubini sees slowing Chinese growth, the U.S. fiscal mess, European debt issues, and a sputtering Japan conspiring to put the brakes on global growth by 2013 at the latest. Roubini sees a one-in-three chance of that scenario, with the other possibilities being anemic growth and somewhat higher growth. The escalating U.S. deficit may eventually spur a bond market “revolt”, pushing interest rates sky-high, Roubini asserted. Read More

Roubini: Euro Zone Faces Eventual Break Up -FT
The European and Monetary Union faces an eventual break up and the euro "disorderly debt workouts" should the euro zone fail to resolve its "economic and competitiveness divergence," economist Nouriel Roubini said Monday. The monetary union "never fully satisfied the conditions for an optimal currency area," Roubini, co-founder and chairman of Roubini Global Economics, wrote in an op-ed in the Financial Times. "Instead its leaders hoped that their lack of monetary, fiscal and exchange rate policies would in turn see an acceleration of structural reforms. These, it was hoped, would see productivity and growth rates converge," he said.

The way to restore competitiveness and growth for members on the periphery, said Roubini, would be to abandon the euro, restore their national currencies, and "achieve a massive nominal and real depreciation." While some may doubt the prospect of countries abandoning the euro, such as scenario "may not be so far-fetched five years from now, especially if some of the periphery economies stagnate.

"The euro zone was glued together by the convergence of low real interest rates sustaining growth, the hope that reforms could maintain convergence; and the prospect of eventual fiscal and political union. Read More

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