Video Interview: The Economist

Latest video interview, August 2010

Topics: America's banking reforms, the risk of deflation in advanced economies and China's growth

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China`s Slowdown

The slowdown in China’s economy looks to have continued in July, with industrial production, exports and investment all decelerating as RGE has been anticipating. Meanwhile, massive flooding and expectations for a weak fall harvest pushed up food prices, likely tipping the CPI back above the central bank’s 3% comfort level.

in RGE

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Fed Meeting: We Do Not See Any Major Policy Moves Materializing This Week

We kick off our look at North America with the United States, where we dwell on the weak employment report last week. We expect that the dismal report will weigh on the minds of policymakers as they gather for the Federal Open Market Committee (FOMC) meeting this week. As we stated in the Q2 2010 outlook for the United States, we expect the Fed to step in and provide additional monetary stimulus. However, we do not see any major policy moves materializing this week, but we continue to look for further verbal signals regarding impending policy moves.

in RGE

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The Price Of Oil And The Mexican Peso

“The price of oil is creating a positive impetus for the peso. The market knows the central bank will intervene when the peso appreciates too quickly.”

Bertrand Delgado, a senior economist at Roubini Global Economics LLC, New York

Brazilian Monetary Policy: When Will The Tightning Cycle End?

In Brazil, the July 21 monetary policy minutes did not provide a clear signal about when the tightening cycle will end; however, the dovish and data-dependent tone indicates further hikes of a similar size to, or smaller than, that delivered in July.

Related ETF: iShares MSCI Brazil Index (ETF) (NYSE:EWZ)

in RGE

US Stocks: Market Recap

U.S. stocks surrendered some of yesterday’s strong gains as weak data on personal income and spending and a drop in the pending home sales index, along with bleak earnings prospects from reporting consumer companies stoked fears that the economic recovery was losing momentum. Investors shunned risky assets and turned to the safety of US treasuries. Modest gains in July’s U.S. car sales also raised concerns about the health of the industry's recovery.

In earnings, 352 companies in the S&P 500 so far have reported, with 268, or 76%, beating the average estimates of analysts. Average estimates for earnings-per-share have been revised up slightly to US$20.70 from US$20.67, and actual EPS currently stands at US$20.53.

in RGE, by Tetiana Sears

Japan: Economic Outlook

Japan's unemployment rate has been rising since end-Q1 2010—in other words, since the end of the cyclical export rebound. As Japan is really still only an industrial economy, not an information economy like the U.S. or eurozone, the downturn in exports means a slowdown in industrial production and hence employment growth.

in RGE

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Defaults And Official Support

"In situations of insolvency, official support not only fails to prevent the eventual default, but also exacerbates the trouble, causing more damage to the country and even to its creditors."

in Forbes

Oscillations In The Euro's Exchange Rate Against The Dollar

"It's been like a beauty contest where the issue is not who's the prettiest, but who's the least ugly"

Nouriel Roubini is an American professor of Economics at New York University`s Stern School of Business and chairman of Roubini Global Economics

The Difference Between 2.5% Growth And 1.5%

"Well, the potential growth is around 2.75-3%, so if we are at 2.5% probably you create enough jobs to stabilize the unemployment rate, but at 1.5% you have job losses, unemployment goes up (...) 2.5% is close to potential while 1.5% is about half as much as potential."

in CNBC

In the Second Half Of The Year It Will Feel like A Recession

“Certainly the second half of the year has to be worse. Less than 2% in second quarter is not a recession, but everything is worse. It feels like a recession.”

in CNBC

US Economic Outlook

Video interview, CNBC, July 26.

European Stress Tests: The Assumptions Are Not Realistic Enough

"The assumptions made about economic growth, about sovereign risk are not realistic enough"

in CNBC

Don`t Jump Into Gold

"The concerns propelling the price of gold specifically are very real and should not be ignored. But is now the time for investors to jump the gold bandwagon? We wouldn’t encourage it."

in Roubini Global Economics (RGE) clients note

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An Orderly Restructuring Of Greece Is Unavoidable

An orderly restructuring is unavoidable, desirable and viable in ways that benefit both the sovereign debtor and its creditors.

in CNN Money

US Growth Will Slow To 1.5 Percent In The Second Half

"US growth will slow to 1.5 percent in the second half of 2010 and into 2011, the New York University economist wrote in the Australian Financial Review newspaper. The slowdown will feel like a recession, Roubini said.

The outlook for the euro zone is worse than the U.S. and growth may be close to zero by the end of the year, he wrote."

in Bloomberg

Doug Kass Asks Nouriel 3 Questions

"In the Q&A session, I asked Nouriel three questions:

I. How can he explain the schmeissing in U.S. equities when, at the same time, certain risk measures (lower bank swap spreads, Libor, junk bond yields, a higher euro, etc.) and risk markets appear to have stabilized?

II. Could the U.S. stock market be attractive in light of generally reduced economic expectations and lower corporate profit assumptions?

III. Could the U.S. stock market be attractive with markets selling at less than 12x realistic 2011 S&P 500 profits vs. an historical average of 15.5x and at 17.0x when interest rates and inflation are quiescent?

On the first question, Nouriel agreed with my observation that, unlike the May swoon, risk metrics had stabilized. I was delighted to hear that he said he now recognizes that his principal role is as an economist, as he has learned over the past few years that there are other influences that affect the equities market and that the stock market and the economy are often (especially on a short-term basis) out of sync. On the second and third questions I asked, he felt that the stock markets were still discounting higher and unrealistic economic growth and corporate profits. I responded that my impression is that economists have ratcheted down economic and profit forecasts -- many of whom are not materially higher than him now. On question three, he admitted that, absent another dislocation, stocks might be cheap relative to history."

in The Street.com

Oil Can Rapidly Spike And Trigger A Global Recession

And one cannot exclude the possibility of an Israeli military strike on Iran in the next 12 months. If that happens, oil prices could rapidly spike and, as in the summer of 2008, trigger a global recession.

in seeking alpha

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The Optimists’ Delusional Hopes For A Rapid V-shaped Recovery Evaporate

So, as the optimists’ delusional hopes for a rapid V-shaped recovery evaporate, the advanced world will be at best in a long U-shaped recovery, which in some cases – the eurozone and Japan – may be long enough to stretch into an L-shaped near-depression. Avoiding double dip recession will be difficult.

in seeking alpha

Risks And Challanges

“We have to recognize that Americans are adults. Then we have to speak to them straightforward about the risks and challenges that we have, rather than kicking the can down the road.”

in Bloomberg Radio

This Second Global Slowdown Could Not Have Come At A More Difficult Time

Politically, this second global slowdown could not have come at a more difficult time. In the US, Democrats and Republicans will soon retreat to their corners to prepare for November's mid-term elections. Meanwhile, President Barack Obama must again persuade America's taxpayers that a new surge in government spending is needed to protect a fragile recovery -- and at a moment when voters are telling pollsters that America's debt is as great a threat as terrorism.

in FT.com