Nouriel Roubini

Nouriel Roubini: ‘For Now, I Don’t See The Crash Approaching’

While not an “official” Crash Prophet, I’ve still made it a point to follow Nouriel Roubini (former Clinton administration Treasury official, NYU economics professor, and Roubini Global Economics chairman) through the years primarily because of his early and correct prediction of the 2008 global financial crisis. Back in February 2012, I blogged about a 2005 New York Times interview in which “Dr. Doom”- as the financial media likes to call him- warned that the U.S. housing market was in a bubble that would pop and bring about a global economic recession (or even depression).

Fast forward to November 2017. Business Insider Poland’s Damian Szymański recently had the opportunity to interview Dr. Roubini and ask him about a coming economic crisis. From their exchange:

BUSINESS INSIDER: If you succeeded to forecast the biggest crash in the global economy since the Great Depression of the 1920s, I have to ask you this particular question: does the world faces the similar fate right now? Do you notice any symptoms of the upcoming crisis?
ROUBINI: I don’t see similar threats for next one-and-a-half to two years. But in a long-term, there will be some kind of crisis, that’s certain. But whether it’s going to be in the US, China or Japan, we don’t know. Will its reach be global or local? We don’t know it either. But one has to remember that a crisis is not something unpredictable, like an earthquake. All crises build up- gradually, step by step. We keep climbing, higher and higher until we reach the final point. And that- Bam! We have a crash.
BUSINESS INSDIER: So, right now, are we in the middle of this road toward the peak? Or do we just start climbing?
ROUBINI: There are certain spots in the US over-leveraged enterprise sector that can cause trouble. The non-bank financial sector or rising government debt is also worrying, but for now, I don’t see the crash approaching. But the situation needs careful monitoring. The debt has to be spent on investment, not consumption- this is the only way to avoid another financial crisis.

(Editor’s note: Bold added for emphasis)

An insightful interview, which can be read in its entirety on the Business Insider website here.

By Christopher E. Hill
Survival And Prosperity (www.survivalandprosperity.com)

(Editor’s note: A qualified professional should be consulted prior to making a financial decision based on material found in this weblog. If this recommended course of action is not pursued, then it must be understood that the decision is the reader’s and the reader’s alone. Christopher E. Hill, the creator/Editor of this blog, is not responsible for any personal liability, loss, or risk incurred as a consequence of the use and application, either directly or indirectly, of any information presented on the site.)

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Wednesday, November 29th, 2017 Asia, Crash Prophets, Debt Crisis, Government, Investing No Comments

Nouriel Roubini: ‘Mother Of All Asset Bubbles’ To Pop In 2016

One of the original “crash prophets” of the 2008 global economic crisis is now sounding the alarm over what he sees in 2016.

I first mentioned Nouriel Roubini, a former Treasury official under the Clinton administration, a professor of economics at NYU, and chairman of Roubini Global Economics, in my old blog Boom2Bust.com several years ago. Roubini correctly-predicted the financial crisis, but “Dr. Doom”- as the financial media likes to call him- had become more optimistic this year. On May 14, 2014, he “debated” fellow “prophet” Peter Schiff on CNBC’s Fast Money, saying:

We’re printing a lot of money but it’s not creating credit. It’s not creating inflation. And if we had not done this policy, this Great Recession would have become a Great Depression. So, inflation is going to stay low. Gold prices are going to fall. And I don’t believe that the dollar’s going to collapse. Actually, I believe the dollar’s going to become stronger in the next few years- just the opposite of what Peter thinks.

But these days, Dr. Roubini is starting to sound gloomy again. Last week, I happened to come across a Yahoo! Finance interview with Roubini from earlier this month. From an exchange with editor-in-chief Aaron Task:

TASK: Nouriel Roubini is often referred to as “Dr. Doom”- affectionately of course- but the NYU professor and chairman of Roubini Global Economics is not always downbeat. He prefers “Dr. Realist,” and in February 2013 Roubini told Yahoo! Finance and this reporter that, “The mother of all asset bubbles had begun, and would eventually be bigger than the 2003-2006 bubble.” Since that time the S&P 500 is up about 40 percent, so Nouriel, that was a great call if you were long, and bubbles are great if you’re long and you get out in time. Where do you see- what inning, if we use the baseball analogy, are we in in this bubble from your point of view?
ROUBINI: We’re in middle-later innings. Next year we’ll have economic growth. We’re still easy money. I think that this frothiness that we’ve seen in these financial markets is likely to continue- from equities to credit to housing. And in a couple of years, most likely, this asset inflation is going to become asset frothiness. And eventually, an asset and a credit bubble. And eventually, any booming bubble ends up a bust and a crash. I don’t expect that happening next year, but I would say that valuations in many markets- whether its government bonds or credit or real estate or some equity markets- are already stretched. They’re going to become more stretched as the real economy justifies a slow exit, and all this liquidity is going into more asset inflation. And so, two years down the line for them to shake out, but not before then.
TASK: A couple of years down the line, okay.
ROUBINI: Yeah. 2016 I would say.

(Editor’s note: Bold added for emphasis)


“Roubini: U.S. equities will be strong until 2016”
Yahoo! Finance Video

Dr. Roubini gave this advice to investors:

At this point, I would be neutral or underweight U.S. equities compared to other markets.

As for “best bets” in 2015, he told viewers:

Several I would say. I would say, dollar strength relative to the euro, relative to the yen, relative to the commodity currencies, relative to fragile emerging markets. And a bet on commodities further another leg down, certainly industrial metals like copper and others linked to China. Those will be two of the stories for 2015.

Christopher E. Hill
Survival And Prosperity (www.survivalandprosperity.com)

(Editor’s note: I am not responsible for any personal liability, loss, or risk incurred as a consequence of the use and application, either directly or indirectly, of any information presented herein.)

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Bearish Peter Schiff Debates Bullish Nouriel Roubini

“How long was I warning about the housing bubble and the financial crisis before it happened? It was years. It takes a while for these problems to surface. We do have an inflation problem. We do have a bubble. And commodity prices are rising. Gold prices are rising.”

-Peter Schiff, debating with noted “bear”-turned-“bull” Nouriel Roubini on CNBC’s Fast Money yesterday


“Roubini vs. Schiff: Who’s “Doomier” on US Economy?
YouTube Video

By Christopher E. Hill
Survival And Prosperity (www.survivalandprosperity.com)

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Nouriel Roubini Warns Stocks Could Correct

Another “Dr. Doom” is talking of a stock market correction these days.

Nouriel Roubini, co-founder and chairman of Roubini Global Economics, spoke with CNBC Europe from Lake Como, Italy, last Friday. The former Treasury official in the Clinton administration, who correctly-called the 2008 global financial crisis, talked about the U.S. economy and larger financial system. “Dr. Doom” told viewers don’t expect quantitative easing to go away anytime soon:

Increasingly QE has less effects really on the economy. There is some credit creation right now. There is a positive and so on. But certainly it is becoming ineffective. The trouble is if you take away QE very fast you could have a significant back up in long rates, and that’s going to essentially kill the recovery in its tracks. Therefore, the Fed has no choice but maintaining QE3 for as far as I can see.

(Editor’s note: Italics added for emphasis)

In addition, the professor of economics at NYU warned of a possible correction in stocks later this year:

Down the stream, second half of the year, the U.S. stock market could correct somehow.


“Roubini Warns on US Economy”
YouTube Video

Definitely more subdued than the other “Doctor Dooms”- Marc Faber and Peter Schiff- on the near-term prospects for the U.S. economy and financial markets.

By Christopher E. Hill, Editor
Survival And Prosperity (www.survivalandprosperity.com)

(Editor’s note: I am not responsible for any personal liability, loss, or risk incurred as a consequence of the use and application, either directly or indirectly, of any information presented herein)

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Nouriel Roubini: ‘Highly-Likely Chance We’re Going To Go Over The Cliff’

Last time I mentioned Dr. Nouriel Roubini, a former Treasury official in the Clinton administration who correctly-called the 2008 global financial crisis, he was warning about a slowing U.S. economy. Well, the professor of economics at New York University and chairman of Roubini Global Economics appeared on Bloomberg Television’s Surveillance earlier today and discussed the looming “fiscal cliff,” the combination of tax hikes and spending cuts the U.S. faces on January 1 under current federal law. “Dr. Doom,” as the media sometimes refers to him as, warned viewers:

I think there’s a highly-likely chance we’re going to go over the cliff. If we do so, the market reaction is going to force the two sides to reach an agreement. But even if we reach an agreement, like I said- you’re going to have 1 to 2 percent drag on growth in an economy that’s barely growing.


“Roubini Says Fed Inflation Targeting Out the Window”
Bloomberg TV Video

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Nouriel Roubini: The Pollyannas Are Wrong As Usual, The U.S. Economy Is Slowing

It’s been a few months since I last mentioned Dr. Nouriel Roubini, a former Treasury official in the Clinton administration who correctly-called the 2008 global financial crisis. But last Friday the professor at NYU’s Stern School of Business and Chairman of Roubini Global Economics appeared on the Project Syndicate website to call out the economic Pollyannas and warn the U.S. economy is slowing. Roubini wrote:

While the risk of a disorderly crisis in the eurozone is well recognized, a more sanguine view of the United States has prevailed. For the last three years, the consensus has been that the US economy was on the verge of a robust and self-sustaining recovery that would restore above-potential growth. That turned out to be wrong, as a painful process of balance-sheet deleveraging – reflecting excessive private-sector debt, and then its carryover to the public sector – implies that the recovery will remain, at best, below-trend for many years to come.

Even this year, the consensus got it wrong, expecting a recovery to above-trend annual GDP growth – faster than 3%. But the first-half growth rate looks set to come in closer to 1.5% at best, even below 2011’s dismal 1.7%. And now, after getting the first half of 2012 wrong, many are repeating the fairy tale that a combination of lower oil prices, rising auto sales, recovering house prices, and a resurgence of US manufacturing will boost growth in the second half of the year and fuel above-potential growth by 2013.

The reality is the opposite: for several reasons, growth will slow further in the second half of 2012 and be even lower in 2013 – close to stall speed.

(Editor’s note: Italics added for emphasis)

The “crash prophet” offers up some good arguments as to why the U.S. economy is slowing, not recovering. You can read the entire piece on the Project Syndicate website here.

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‘Crash Prophets’ Now Warning About 2013

Speaking of crash prophets like Stephen Roach, I’ve noticed for a while now that well-known investor Jim Rogers has been sounding the alarm over 2013 and beyond. I wrote just last Wednesday:

However, Boyle notes that the former partner of George Soros has concerns about the United States after 2012. From the article:

Rogers, who doesn’t own US stocks, warned that next year is likely to be more painful than 2012.

“In 2012, we have elections and many governments pumping money into the economy, spending and printing money. It’s 2013-14 we have to worry about,” he said.

So what does Rogers see in store for the U.S. economy next year and beyond that’s so worrisome?

Back at the beginning of December 2011 the Chairman and CEO of Rogers Holdings participated in an exclusive interview with Newsmax.TV’s Kathleen Walter. He told viewers:

In America we have had recessions every four to six years since the beginning of the Republic. So by 2012, 2013, we’re going to have another one, and it’s going to be much, much worse. Whether that’s a depression or not, I don’t know- maybe the one after that– but be very careful because America’s getting deeper and deeper into trouble.


“Jim Rogers: 2013 Is Going to Be a Mess”
Newsmax.TV Video

Back on July 8, 2011, I blogged about another “crash prophet,” Dr. Nouriel Roubini, who also predicted major economic pain in 2013 and shared his forecast with CNBC viewers. I wrote:

While the chairman and co-founder of Roubini Global Economics predicts the U.S. economy will experience slight growth in the near-term, it will be rough sailing by 2013. From the piece:

“I see every economy in the world trying to push their problems to the future,” he said. “We start with private debt, public debt, supra-national debt—we’re kicking the can down the road and eventually this is going to come to a head in 2013.”

(Editor’s note: Italics added for emphasis)

The former Treasury official in the Clinton administration doesn’t look to have changed his mind about what’s in store for the United States almost eight months after he made that statement.

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Survival And Prosperity
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