EFSF I, EFSF II & EFSF III

EFSF I was 250 billion euros; EFSF II is 440 billion but isnt enough. EFSF III will have to be 2 Trillion euros plus to bailout Italy/Spain. - in Nouriel`s Official Twitter

Tickers: Ishares MSCI Italy Index (EWI), iShares MSCI Spain Index (ETF)

Nouriel Roubini is an American economist. He teaches at New York University's Stern School of Business and is the chairman of Roubini Global Economics.

What Policies Are Needed To Solve The Crisis

I wrote a paper recently in which I have an eight-point plan to highlight the kind of policies which are needed. One, much more monetary and quantitative easing, not just quantitative easing but credit easing. Two, short-term fiscal stimulus in the countries that can still do it. The US, UK, Germany, core of the Eurozone, Japan, it’s the periphery that’s doing fiscal retrenchment. You have to postpone the austerity.

In the short-run, we need fiscal stimulus. We need to provide massive amounts of lender-of-last-resort support to Italy and Spain to make sure that illiquid but solvent sovereigns do not have a self-fulfilling run. We need an orderly restructuring of the debt of governments, of banks, of households that are insolvent. We need to have a massive recapitalization of the European banks through a TARP (Troubled Asset Relief Programme) type of programme for the European banks. We need to support emerging markets by providing monetary and fiscal support to the countries that are going to get in trouble, and to provide support through the IMF and other international financial institutions. We have to provide credit to small and medium-sized enterprises and households that are squeezed. We need to have also an orderly exit of countries that are not going to regain competitiveness in the eurozone, like Greece and potentially also Portugal. And you have to do this in a clear, holistic and front-loaded way.

So there are many things that we need to do. I fear that the politicians in the US, in Europe, in UK are not going to have the political willingness to do it in their own countries, let alone coordinate it internationally. - in emerging markets magazine

Nouriel Roubini is an American economist. He teaches at New York University's Stern School of Business and is the chairman of Roubini Global Economics.

There Is A High Likelihood That There Is Going To Be Another Global Financial Crisis

In my view there is a high likelihood that there is going to be another global financial crisis. My data suggests that most advanced economies are already entering a recession. We’re not any more in an anaemic recovery, we’re not any more at stall speed. We’re at the beginning of a contraction. I think there’s a contraction already in most of the eurozone, there is a contraction in the US, also in the UK. That’s the first point.

The second point is we’re running out of policy bullets – monetary, fiscal – backstopping the financial system.

And third, the eurozone is a source of systemic risk. If there is a disorderly situation in the eurozone it’s going to be worse than Lehman.

At this point it’s not any more Greece or Ireland or Portugal. The contagion has spread to Italy and Spain. In the case of Italy and Spain the critical thing is that even if you believe that Italy and Spain are illiquid but solvent, even adjusting from the reforms, they’ve lost credibility in the markets. It’s going to take them at least a year to regain it.

Therefore you need a lender of last resort to backstop the sovereigns until they regain the credibility to avoid spreads going up and leading to a self-fulfilling run. And there are only a very few options, none of them feasible. One of them is the [eurobonds]. It’s going to take at least two years until they can pass that and it’s going to be approved by a treaty.

The other option is the ECB doing the dirty job. But the ECB constitutionally, legally, is not allowed to be a systemic lender of last resort for sovereigns.

The third option is to triple the EFSF (European Financial Stability Facility). But they’re not even able to pass the current extension of the EFSF. If tomorrow the Germans have to triple the EFSF, that is a political mission impossible.

So my worry is that the EFSF is going to run out of money and then there is not going to be a lender of last resort to backstop Italy and Spain. And that could be a source of a systemic break down of the eurozone, with global financial consequences worse than Lehman. - in Emerging Markets

Related, Financial Select Sector SPDR ETF (NYSE:XLF)

Nouriel Roubini is an American economist. He teaches at New York University's Stern School of Business and is the chairman of Roubini Global Economics.

High Likelihood Of Another Global Financial Crisis

There is a high likelihood that there is going to be another global financial crisis. - in www.advisorone.com

Nouriel Roubini is an American economist. He teaches at New York University's Stern School of Business and is the chairman of Roubini Global Economics.

The Latest Economic Data Suggests That Recession Is Returning To Most Advanced Economies

The latest economic data suggests that recession is returning to most advanced economies, with financial markets now reaching levels of stress unseen since the collapse of Lehman Brothers in 2008. The risks of an economic and financial crisis even worse than the previous one – now involving not just the private sector, but also near-insolvent sovereigns – are significant. - in Project Syndicate

Nouriel Roubini is an American economist. He teaches at New York University's Stern School of Business and is the chairman of Roubini Global Economics.

There Will Be Unrest In The US

"As we go into another recession, there will be unrest in the US." - in IB Times

Related: SPDR S&P 500 Index ETF (SPY)

Nouriel Roubini is an American economist. He teaches at New York University's Stern School of Business and is the chairman of Roubini Global Economics.

We Need Lower Interest Rates in Europe

We need lower interest rates in Europe. We need to lower the value of the euro. We need more fiscal resources. We need three times as much resources in Italy and Spain. - in Economic Times

Nouriel Roubini is an American economist. He teaches at New York University's Stern School of Business and is the chairman of Roubini Global Economics.

Thinking The Problems Of The Eurozone Are Going To Go Away Is Delusional

These shocks are going to keep on occurring. Thinking the problems of the Eurozone are going to go away is delusional. The risk is actually that there is going be deceleration and the beginning of an economic contraction. - in Economic Times

Nouriel Roubini is an American economist. He teaches at New York University's Stern School of Business and is the chairman of Roubini Global Economics.

"Operation Twist" May Worsen The Credit Crunch

Operation Twist may worsen the credit crunch as it will reduce banks' net interest margin . Unintended consequences...

Tickers: JP Morgan (JPM), Citigroup (C), Wells Fargo (WFC), Bank Of America (BAC), Goldman Sachs (GS), Morgan Stanley (MS);

Nouriel Roubini is an American economist. He teaches at New York University's Stern School of Business and is the chairman of Roubini Global Economics.

Do We Need Celestial Divine Intervention?

Yes, we now need celestial divine intervention as we are running out of policy rabbits... MERKEL SAYS SHE, POPE SPOKE ABOUT FINANCIAL MARKETS. - in Nouriel`s Official Twitter

Nouriel Roubini is an American economist. He teaches at New York University's Stern School of Business and is the chairman of Roubini Global Economics.

The Latest Economic Data Suggests That Recession Is Returning To Most Advanced Economies

The latest economic data suggests that recession is returning to most advanced economies, with financial markets now reaching levels of stress unseen since the collapse of Lehman Brothers in 2008. The risks of an economic and financial crisis even worse than the previous one – now involving not just the private sector, but also near-insolvent sovereigns are significant. - in Reuters

Tickers, ProShares UltraShort S&P500 ETF (NYSE:SDS), iShares MSCI Japan Index ETF (NYSE:EWJ), iShares MSCI Emerging Markets Index ETF (NYSE:EEM)

Nouriel Roubini is an American economist. He teaches at New York University's Stern School of Business and is the chairman of Roubini Global Economics.

QE3 Unlikely To Lead To Robust Asset Reflation

QE3 can't lead to robust asset reflation unless, like summer '10, macro news are positive. But as we double-dip surprises will be downside. - in Roubini`s Official Twitter

Nouriel Roubini is an American economist. He teaches at New York University's Stern School of Business and is the chairman of Roubini Global Economics.

The Benefits Of Long Flights: Quiet Reading

Benefits of long flights: quiet reading. I read the first 700 pages of Sylvia Nasar's Grand Pursuit on the flight to Johansburg. A must read book. - in Nouriel`s Official Twitter

Nouriel Roubini is an American economist. He teaches at New York University's Stern School of Business and is the chairman of Roubini Global Economics.

Greece Must Begin An Orderly Default & Return To The Drachma

Greece is stuck in a vicious cycle of insolvency, low competitiveness and ever-deepening depression. Exacerbated by a draconian fiscal austerity, its public debt is heading towards 200 per cent of gross domestic product. To escape, Greece must now begin an orderly default, voluntarily exit the eurozone and return to the drachma.

Nouriel Roubini is an American economist. He teaches at New York University's Stern School of Business and is the chairman of Roubini Global Economics.

We Are Entering A Recession

In August 0% jobs snd retail sales growth. September looks worse based on initial unemployment claims and other indicators. We are entering a recession. - in Roubini`s Official Twitter

Nouriel Roubini is an American economist. He teaches at New York University's Stern School of Business and is the chairman of Roubini Global Economics.

RTL Video: Euro Zone Crisis

Europe has been kicking the can down the road: RTL Video

Nouriel Roubini is an American economist. He teaches at New York University's Stern School of Business and is the chairman of Roubini Global Economics.

How Deep Will The Recession Be?

At this point the question is not double dip or not but rather how deep the recession will be: answer depends on policy response & Euro Zone crisis. - in Nouriel`s Official Twitter

Nouriel Roubini is an American economist. He teaches at New York University's Stern School of Business and is the chairman of Roubini Global Economics.

Retail Sales Unexpectedly Stagnate

Depressed consumers in a funk as jobs scarce, wages falling, double-dip coming. Retail sales in the U.S. unexpectedly stagnate. - in Roubini`s Official Twitter

Related: SPDR S&P 500 ETF (SPY)

Nouriel Roubini is an American economist. He teaches at New York University's Stern School of Business and is the chairman of Roubini Global Economics.

There Was No Income Growth In 15 Years

US yearly median household income at its lowest level since 1996. No income growth in 15 years as inequality at 1929 level. - in Roubini`s Official Twitter

Nouriel Roubini is an American economist. He teaches at New York University's Stern School of Business and is the chairman of Roubini Global Economics.

A New Book To Read

I look forward to reading Sylvia Nasar's new book published today.

Excerpt: How to Prevent Economic Crises - Bloomberg

Some Members May Eventually Exit The Monetary Union

Orderly mechanisms for exit from the Eurozone should be designed to reduce collateral damage. Some members may eventually exit the monetary union. - in NR`s Official Twitter

Related: iShares MSCI Spain Index (ETF) (NYSE:EWP) iShares MSCI Italy Index (ETF) (NYSE:EWI) National Bank of Greece (ADR) (NYSE:NBG), Bank of Ireland (ADR) (NYSE:IRE)

ECB Still Obsessed With Inflation

ECB impeccably obsessed with inflation and not caring about growth or financial stability. - in Roubini`s Official Twitter

ECB And Germany Are Splitting

Stark resigning, after Weber, would be sign of ECB becoming more sensible. But also Weidman voted against ECB bond purchases. ECB-GER split. - in Roubini`s Official Twitter

EUR/USD Should Be Below 1.1000 To Save PIIGS

EUR should be below 1.10 to save PIIGS. - in Nouriel`s Official Twitter

Only By Moving Towards Full Integration Now Can Europe Save Itself

After many months of muddling through - but not getting at the systemic roots of the economic, fiscal and financial crisis - Europe is at tipping point.

If it continues any longer with the status quo of dithering instead of decisiveness, the euro zone will break up and its national economies will weaken. Only by moving towards full integration - now - can Europe save itself. - Nouriel Roubini, Nicolas Berggruen September 09, 2011

If We Get A Nasty Global Recession, Equities Are Going To Be Hurt Big Time

If we see a nasty global recession, then risky assets, starting with equities, are going to hurt and going to hurt big time. - in Bloomberg.com

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

We Need To Restore Growth Today Or Risk Another Great Depression

You need to restore economic growth, not five years from now, you need to restore it today. In the short term, we need to do massive stimulus, otherwise there’s going to be another Great Depression. Things are getting worse and the big difference between now and a few years ago is that this time around we’re running out of policy bullets. - in Bloomberg

I Thought A Few Months Ago That The Perfect Storm Would Be In 2013

I thought a few months ago that the perfect storm would be 2013. But now, the economic weakness in the U.S., euro zone and the U.K. is front loaded. So we’re going to double dip earlier. The climax of it could be 2013, or it could be already earlier. It depends on what policy tools are available. - in Bloomberg

Tickers: SPDR S&P 500 ETF (NYSE:SPY), iShares MSCI United Kingdom Index ETF (NYSE:EWU)

Italy's Crisis Is One Of Confidence As Much As Fundamentals

Italy's crisis is one of confidence as much as fundamentals. Markets lost faith in the credibility of Italy's government leader, Berlusconi.

In all Eurozone crisis countries government change: Greece, Ireland, Portugal; in Spain elections/change coming. The only one stalling is Italy. - in Roubini`s Official Twitter

Swiss National Bank Action Pre-Empts Additional Inflows Into The Swiss Franc

Swiss National Bank (SNB) action pre-empts additional inflows into the swiss franc (CHF) from expected ECB policy easing and/or signal of easing bias this week.

SNB decision to prevent the CHF from appreciating is a massive unlimited QE operation as it requires unlimited unsterilized FX intervention. - in Roubini`s Official Twitter

If Berlusconi Was Gone Tomorrow, Italian Spreads Would Be 50-100 basis Points Lower

“I think Italy has to do it, fiscal austerity, and even if they do it, the markets are going to be nervous about the credibility if this government. I think that if Berlusconi was gone tomorrow, Italian spreads, even with the same policies, would be 50-100 basis points lower." - in CNBC

The ECB Has To Reverse Its Biggest Mistake Ever

The ECB has to reverse this week its biggest mistake ever, the rate hike that sharply worsened the EZ crisis - in CNBC

Italy Would Lose Market Access Without The ECB Bond Purchases

Most Italian political leaders at Villa d'Este still dithering and unaware that Italy would lose market access without ECB's bond purchase bailout. - in Roubini`s Official Twitter account

Europe: Dis-integration Or More Integration?

When a crisis threatens Europe with dis-integration the eventual policy response is greater integration. Will this be the outcome again? - in NR`s Official Twitter

Euro Zone Problems Are Going To Get Worse, Not Better

Euro zone problems are going to get worse, not better. We are in this vicious circle which is likely to have systemic effects in the euro region. Unless there is economic growth anything Italy is going to do on the fiscal side won't be sufficient. - at a press conference in Cernobbio, Italy

No More Policy Bullets

"Every time we had an economic downturn and a market downturn, we had all the policy bullets, we'd take another policy rabbit out of the hat and try to restimulate the economy and the market, but this time around we'll have fiscal austerity throughout advanced economies, our ability to backstop banks and financial institutions is limited by the fact that there is resistance to it (and) not every country can weaken their currency." - in the Ambrosetti Forum

We Are In A Worse Situation Than We Were In 2008

“We are in a worse situation than we were in 2008. This time around we have fiscal austerity and banks that are being cautious.” - in CNBC Related: Bank Of America (BAC), Citigroup (C), Wells Fargo (WFC), J.P. Morgan (JPM), Banco Santander (STD), Barclays Bank, Deutsche Bank, Credit Agricole, Societe Generale

Eurozone Manufacturing Is Contracting

"Eurozone PMI two-year low of 49.0 in Aug. New orders are down in all countries." - EZ manufacturing is clearly contracting. - in NR`s Official Twitter

Global Slowdown Hurting China

Chinese PMI New Export Order Index down well below 50. G7 & global slowdown hurting. - in Nouriel`s Official Twitter