US Fiscal Train Wreck Ahead

Telegraph article: Roubini sees US 'fiscal train wreck' ahead - The US economy is a "fiscal train wreck" waiting to happen, US economist Nouriel Roubini warned on Friday.

Argentina: The Economic Outlook Is Cloudy Because Of External And Domestic Factors

“While overall economic growth is still robust right now, the economic outlook is cloudy because of external factors and domestic factors. The growth of the economy that is coming from the net export part of the economy is going to weaken over time because global economic growth is slowing down and exports and imports globally are going to slow down.”

With a domestic economy that is driven by mostly domestic demand right now, artificially boosted by easy money, easy credit and easy fiscal policy, and an external sector that so far is doing well, but with the fixed exchange rate and high inflation, the real appreciation is going to lead to a significant weakening of that account.”

Nouriel Roubini, in a Buenos Aires speech, October 27

There Is A Shift Of Economic, Trade And Financial Power To Emerging Economies

"There is a shift of economic, trade and financial power from advanced economies to emerging markets. There's a massive shift in the portfolio preferences of investors to emerging markets and away from advanced markets."

in WSJ

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China And US: A Recipe For Trade Wars.

"Having 10% unemployment in U.S. and 10% growth in China is a recipe for trade wars in a situation in which China doesn't allow its currency to appreciate."

Nouriel Roubini, in a speech to Latin American steel industry executives

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Greece Is Going To Default Or Do A Restructuring Under Pressure.

“If you don’t want to call it default or bankruptcy, call it a restructuring under pressure, but it’s going to happen.”

Nouriel Roubini, in www.ekathimerini.com

Growth Is Slowing Down.

“Some factors that contributed the growth performances of developed economies in the first half 2010 will not continue to exist in the second half, slowing the growth”

Nouriel Roubini, Istambul, October 20th

The ECB Would Rather Kill Any Chance Of The PIIGS Recovery.

“The stubborn ECB would rather kill any chance of the PIIGS recovery rather than consider further QE, which it finds unacceptable, citing the threat of a rise in inflation. Deflation, not inflation, is the risk which plagues the PIIGS."

in CNBC.com

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The Risk Of Global Currency And Trade Wars Is Rising

“The risk of global currency and trade wars is rising, with most economies now engaged in competitive devaluations”

in ictsd.org

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Ukraine's Economy Has Started To Recover

"Ukraine's economy has started to recover, although the realization of reforms in the financial and taxation spheres should be accelerated to strengthen the process, according to Nouriel Roubini, professor of economics at New York University's Stern School of Business.

The economy in Ukraine has started recovering, but crosswinds are still blowing, in particular, the slow recovery of the global economy, as emerging markets are strongly impacted by the global markets, he said. The only way to support Ukraine's economic growth is to accelerate reforms, and in general conduct a proper economic policy to provide resistance to global stresses, he said in Kiev on Tuesday at an investment forum organized by the Investment Capital Ukraine (ICU) Group.

He said that Ukraine should cut its budget deficit and clean up its financial system. The expert also said that Ukraine could gain much from direction foreign investment, although the rights of capital owners should be fully protected."

in www.ukrainianjournal.com

The Risk Of A Trade War Is Severe In Relations Between The US And China

“We are in a world where everybody wants to grow through exports. The risk of trade war is severe in relations between the U.S. and China.”

in Bloomberg.com

With 1% Growth You Don`t Create Private Jobs, The Budget Deficit Widens, House Prices Go Down Instead Of Stabilizing

“If growth is only 1 percent, it is going to feel like recession, though technically it will not be a recession. You don’t create private jobs, the budget deficit widens, house prices go down instead of stabilizing.”

in Bloomberg.com

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There Is Still A Probability Of A Double Dip Recession Or Near Depression, As In Japan In The 90`s

“My base scenario is that we will have a slow, U-shaped recovery in the advanced economies, but still there is a probability of a double-dip recession, or near depression, as in Japan in the 1990s. The recovery in advanced economies is still very tentative.”

in Bloomberg

Roubini Says German Austerity Will Be Fatal for Eurozone

New York University Professor Nouriel Roubini said Germany’s austerity measures, introduced to fight the aftermath of the financial crisis, are “fatal” for Europe’s largest economy, Capital magazine reported, citing an interview.

Chancellor Angela Merkel should take advantage of Germany’s ability to borrow money cheaply and “should only start to consolidate when the rest of Europe is in better shape,” Roubini is cited as saying.

in Bloomberg.com

Financial Markets Volatility Will Be High. Downside Risk Is Higher Then Upside Risk.

"On the fiscal side, Roubini thinks stimulus on a large scale would still work. However, the chances of that happening are slim. The U.S. budget deficit is already at 10 percent of GDP and debt is close to 95 percent of GDP. Plus, bond vigilantes are waking up and the U.S., like most advanced economies, are in "austerity mode" politically, said Roubini.


In light of this problem, Roubini expects financial market volatility to remain high; the downside risk is greater than the upside risk for equities."

in www.ibtimes.com

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The Growth Is So Low That It Feels Like A Recession

"The growth is so low that it feels like a recession, even if it is not technically a recession"

Nouriel Roubini, in a Seoul Conference

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What Obama Can Do To Prevent A Double Dip Recession

Nouriel Roubini is out with a new piece for Foreign Policy on what Obama can do to prevent a double dip recession. It's two pages long, but it can be boiled down really simply:

Eliminate the payroll tax temporarily and reinstall the Bush tax cuts on the rich.

The basic idea? This would spur spending because the working class spends more of their money than the rich do. And what's more it would be deficit neutral (perhaps), and thus wouldn't make people more nervous about breaking the bank.

in www.businessinsider.com

The U.S. Economy Increasingly Looks Vulnerable To Falling Back Into Recession

Roughly three years since the onset of the financial crisis, the U.S. economy increasingly looks vulnerable to falling back into recession. The United States is flirting with stall speed, an anemic rate of growth that, if it persists, can lead to collapses in spending, consumer confidence, credit, and other crucial engines of growth.

Call it a "double dip" or the Great Recession, Round II: Whatever the term, we're talking about a negative feedback loop that would be devilishly hard to break.

Nouriel Roubini and Michael Moran, in Foreign Policy

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US Zeitgeist 2010

The Euro At 1.4000 Is A Painful Level For The Euro Region

"Nouriel Roubini, the professor credited with predicting the 2008 economic crisis, expects the European Central Bank to be forced to ease monetary policy further and sees risks of a double dip recession.

Roubini, speaking at the Peterson Institute today in Washington, said that the euro at 1.4000 is a “painful” level for the euro region."

in Bloomberg.com

Home Prices Will Fall Another 10%

Dr. Doom, New York University professor Nouriel Roubini, told an American Enterprise Institute forum Wednesday that even though the recession technically ended in June 2009, he believes home prices will fall another 10% and that there is now a 40% chance that the economy will fall back into recession over the next 12 months.

in www.huffingtonpost.com

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There Is A 40% Probability Of A Double-Dip Recession

There is a 40% probability of a double-dip recession, but you don't need one for the global economy to feel like it is in a deep, continuing recession, said Nouriel Roubini, the famous pessimist and economics professor at New York University on Wednesday. He said external shocks, such as another Greek credit crisis, perhaps with problems in Spain, Portugal or Ireland, could trigger the shock needed for a double-dip recession. "You don't need another Lehman story, you don't need a major loss," said Roubini at an American Enterprise Institute event. "You can have death by a thousand cuts."

in CBS MarketWatch

Capital Will Keep Flowing Into Emerging Markets

The global financial crisis sped up the pace of capital inflows into emerging markets, economist Nouriel Roubini said Tuesday.

Speaking at a conference here, he said that if and when advanced economies recover from the global financial crisis, the emerging markets will still see a greater share of capital inflows over the long-term, as participants diversify their investment portfolios, lured by the robust growth forecast for emerging markets.

Many emerging markets, including countries in Latin America such as Chile, have seen their currencies bulge versus the dollar, in part on strong capital inflows.

in WSJ

Related: iShares MSCI Emerging Markets Indx (ETF) (NYSE:EEM)

China `s Questionable Infrastructure Investments

"You know, I go to China six or seven times a year, and you have brand-new airports three-quarters empty. Highways to nowhere all over the country."

in WSJ

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The Too Big To Fail Problem

“The ‘too big to fail’ problem has become an even too bigger to fail problem. That is what happens when you do mergers that don’t make any sense.”

Nouriel Roubini, Bloomberg Dealmakers Summit in New York

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