The International Experience Of “Internal Devaluations” Is Mostly One Of Failure

The international experience of “internal devaluations” is mostly one of failure. Argentina tried the deflation route to a real depreciation and, after three years of an ever-deepening recession/depression, it defaulted and exited its currency board peg.

The case of Latvia’s “successful” internal devaluation is not a model for the EZ periphery: Output fell by 20% and unemployment surged to 20%; the public debt was—unlike in the EZ periphery—negligible as a percentage of GDP and thus a small amount of official finance—a few billion euros—was enough to backstop the country without the massive balance-sheet effects of deflation; and the willingness of the policy makers to sweat blood and tears to avoid falling into the arms of the “Russian bear” was, for a while, unlimited (as opposed to the EZ periphery’s unwillingness to give up altogether its fiscal independence to Germany); and even after devaluation and default was avoided, the current backlash against such draconian adjustment is now very serious and risks undermining such efforts (while, equivalently, the social and political backlash against recessionary austerity is coming to a boil in the Eurozone periphery). - in The New York 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.

Italy Needs A Respected And Competent Leader

Replacing Berlusconi with one of his servile lackeys is unacceptable. Italy needs a credible government run by a respected and competent leader. - in Nouriel`s Official Twitter

Related: iShares MSCI Italy Index ETF (EWI)

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.

Italy Needs Growth To Be Sustainable

Italy, like rest of Eurozone periphery, needs rapid return to growth to be sustainable. Necessary austerity/reforms alone make recession worse in the short term. - 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.

Greek Politics: New Democracy Wants To Run The Country Again

The corrupt (New Democracy) who ramped up fiscal deficits to 15 percent of GDP and shamlessly lied about it now want to run Greece's government again. - 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.

Europe: Outlook Is Very Bearish

Our view is very bearish. Europe is a slow motion train wreck and there's a significant risk of a Eurozone breakup. - in Business Insider

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.

G20 Meeting: Kicking The Cannes Down The Road

G20: Kicking the Cannes down the road until hits a brick wall. United States kicks the deficit can; Eurozone kicks the crisis can and China kicks the currency can. - 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.

China Must Grow At 8% A Year To Maintain Social And Political Stability

He says China must expand 8 percent a year just to keep enough people employed to "maintain its social and political stability. - in FDL Reporter

Ticker, iShares FTSE/Xinhua China 25 Index ETF (FXI)

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.

ECB Interest Rate Cut: Unexpected But Correct And Necessary

Draghi starts his term making a first, unexpected but correct and necessary, step: cutting the ECB policy rate to 1.25 percent from 1.5 percent. - in NR`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.

Greek Referendum Makes A Disorderly Eurozone Crisis More Likely

Greek referendum makes Scenario 3 in the RGE paper more likely: a disorderly Eurozone crisis before Spain and Italy are ring fenced. - in Nouriel`s Official Twitter

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

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 Should Default and Abandon the Euro

- Greece is insolvent, uncompetitive and stuck in an ever-deepening depression, exacerbated by harsh and excessive fiscal consolidation. It is time for the country to default in an orderly manner on its public debt, exit the eurozone (EZ) and return to the drachma to rapidly restore solvency, competitiveness and growth.

- Exit will require a conversion of euro liabilities into the new currency to limit the balance sheet effects that the depreciation of the new national currency will entail.

- Greece can exit the monetary union in an orderly and negotiated manner (i.e. limit the collateral damage to its own economy and financial markets that this exit would imply) if orderly mechanisms are used and appropriate official finance is provided. Such official finance to Greece and other EZ members under stress will limit the contagion and the losses for other periphery and core creditor countries, and will ensure that the domestic Greek financial system and economy does not suffer a chaotic implosion.

- Default and exit will be painful and costly, but the alternative of a decade-long deflation and depression would be much worse, economically, financially and socially.

- Moreover, there are historical precedents for countries successfully taking the route of an orderly default on unsustainable foreign liabilities and exit from unsustainable currency pegs and/or currency boards. - in EconoMonitor

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.

Eurozone Plan Is Already Flopping

Roubini Global Economics argued that the Eurozone plan would flop. It is already flopping a few days after being announced "Last Shot on Goal". - in Nouriel`s Official Twitter

Related tickers, National Bank of Greece (ADR) (NYSE:NBG), Banco Santander, S.A. (ADR) (NYSE:STD), Intesa Sanpaolo SpA (BIT:ISP), UniCredit SpA (BIT:UCG), Deutsche Bank AG (USA) (NYSE:DB), UBS AG (USA) (NYSE:UBS), Royal Bank of Scotland Group plc (ADR) (NYSE:RBS)

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.

Cartoon: Roman Empire

Source: 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.

South Africa: Infrastructure And Human Capital Investments Are Essential

Infrastructure & human capital investments (education, skills, health care) essential to raise SA's growth & leverage its natural resources. - in Nouriel`s Official Twitter

ETfs: iShares MSCI South Africa Index ETF (AMEX:EZA)

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.

If China Has A Hard Landing, Commodity Prices Will Be Affected

If China has a hard landing, for a period of time that's going to hurt growth and reduce commodity prices until China recovers and until the rest of the world recovers. - in The Australian

Related stocks, BHP Billiton Limited ADR (NYSE:BHP), Freeport-McMoRan Copper & Gold Inc. (FCX), Rio Tinto plc ADR (NYSE:RIO)

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 Recession Is Already Ongoing In The Euro Zone

The recession is already ongoing in the euro zone. People are going to say it's good financial engineering, but unless you have economic growth there is going to be a train wreck. - in The WSJ

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.

Markets To Turn Skeptical On Euro Deal

In the next few weeks there will be questions about the viability of what has been decided and increasingly the markets are going to become skeptical this is a solution to the euro zone. - in an interview in Paris

Tickers, SPDR S&P 500 ETF (AMEX:SPY), ProShares UltraShort S&P500 ETF (AMEX:SDS)

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.

Eurozone Plan: Little To Restore Growth & Competitiveness

Little in Eurozone plan to restore growth/competitiveness. Without it financial schemes (greek haircut, bank recap, levered EFSF) alone will fail. - in Nouriel`s Official Twitter

Related ETFs, iShares MSCI Spain Index ETF (EWP), iShares MSCI Italy Index ETF (EWI)

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.

Indonesia Can Be Very Important In The Global Economy

It is the time of rising power of the emerging markets and emerging Asia is the fastest growing region in the world. Indonesia is a country that can be very important in the global economy. - Newsmax.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.

China: Real Estate Booms Always End Up In Busts

There could be a hard landing in China over the next two or three years. There's not a single episode of coming out of an over-investment boom with a soft landing. Real estate booms always end up in busts. - in Market Watch

Tickers, iShares FTSE/Xinhua China 25 Index ETF (FXI), Morgan Stanley China A Share Fund, Inc. (CAF), iShares MSCI Hong Kong Index Fund ETF (EWH)

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.

50% Probability Of A Recession

Unfortunately, in my view there is a risk, at least a 50 percent probability, that in the U.S., in the eurozone, in the United Kingdom, and in most advanced economies, the future in the next 12 months might suggest a recession, a downturn, rather than reacceleration of growth. - in Bloomberg

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.

Economic Models Must Properly Address Inequality

Any economic model that does not properly address inequality will eventually face a crisis of legitimacy. - in Moneyweb

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.

Italy And Spain Need A Bazooka

Italy and Spain need a “bazooka” to “have a fighting chance to avoid insolvency. Once you lost market confidence, they put pressure on your spreads. You look insolvent. - in The Financial Post

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 Soft Landing In China? Mission Impossible.

The prospect of a soft landing in China is a “mission impossible". - in Bloomberg

Ticker, iShares FTSE/Xinhua China 25 Index ETF (AMEX:FXI)

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 Is Individually Rational For One Firm Is Destructive In The Aggregate

Firms in advanced economies are now cutting jobs, owing to inadequate final demand, which has led to excess capacity, and to uncertainty about future demand. But cutting jobs weakens final demand further, because it reduces labor income and increases inequality. Because a firm’s labor costs are someone else’s labor income and demand, what is individually rational for one firm is destructive in the aggregate. - in The Instability of Inequality

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.

Eurozone: Do They Really Have A Plan?

Eurozone so far has had a plan to have a plan to rescue the Eurozone. We will see on Sunday if they do have a real plan or more cheap talk. - 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.

Europe Is Still A Disaster. The Crisis Has Spread.

"Unless you have economic growth in the area you're not going to solve the euro-zone crisis, warning of a potential global economic crisis.

It's not about Greece anymore. The crisis has spread to Spain, Italy and even Germany.

Europe is still a disaster zone and the likelihood that a weaker country will exit the union is still high. In case of a disorderly default, we're going to have a global economic crisis and a recession in developed economies. We are running out of policy options. - in The WSJ.com

Tickers, iShares MSCI Spain Index ETF (AMEX:EWP), iShares MSCI Germany Index Fund ETF (AMEX:EWG), iShares MSCI Italy Index ETF (AMEX:EWI)

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.

China Massages Its Economic Data

China massages/manipulates its macro/GDP data. 1st country to publish GDP estimate 2 weeks after end of a quarter. In US it takes 4 weeks. - in Nouriel`s Official Twitter

Related: iShares FTSE/Xinhua China 25 Index ETF (FXI)

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.

Economic Models & Inequality

Any economic model that does not properly address inequality will eventually face a crisis of legitimacy. in Newsmax.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.

This Year Has Witnessed A Global Wave Of Social And Political Turmoil And Instability

This year has witnessed a global wave of social and political turmoil and instability, with masses of people pouring into the real and virtual streets: the Arab Spring; riots in London; Israel’s middle-class protests against high housing prices and an inflationary squeeze on living standards; protesting Chilean students; the destruction in Germany of the expensive cars of “fat cats”; India’s movement against corruption; mounting unhappiness with corruption and inequality in China; and now the “Occupy Wall Street” movement in New York and across the United States.

While these protests have no unified theme, they express in different ways the serious concerns of the world’s working and middle classes about their prospects in the face of the growing concentration of power among economic, financial, and political elites.

The causes of their concern are clear enough: high unemployment and underemployment in advanced and emerging economies; inadequate skills and education for young people and workers to compete in a globalized world; resentment against corruption, including legalized forms like lobbying; and a sharp rise in income and wealth inequality in advanced and fast-growing emerging-market economies. - in Reuters

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 US Economy: Worst Economic Slump Since The 1930`s

Notwithstanding repeated attempts at monetary and fiscal stimulus since 2009, the United States remains mired in what is by far its worst economic slump since that of the 1930s.

More than 25 million working-age Americans remain unemployed or underemployed, the employment-to- population ratio lingers at a near-historic low of 58.3 percent

Business investment continues at historically weak levels, and consumption expenditure remains weighed down by massive private sector debt overhang left by the bursting of the housing and credit bubble a bit over three years ago. Recovery from what already has been dubbed the “Great Recession” has been so weak thus far that real GDP has yet to surpass its previous peak. And yet, already there are signs of a possible renewed recession. - in The Way Forward by Daniel Alpert, Robert Hockett, Nouriel Roubini

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.

Thoughts On The Occupy Wall Street Movement

My view of it is that it is a symptom of the economic malaise that we're facing not just in the United States, but all over the world. It started with the Arab Spring, and of course, poverty, unemployment, corruption, inequality eventually leads to people becoming restless. But now, you have middle-class people in Israel saying we cannot afford homes; you have middle-class students in Chile saying we don't have education; you have riots in London; people smashing Mercedes and BMWs of fat cats in Berlin and Frankfurt; you have an anti-corruption movement in India. It takes a lot of different manifestations, but we live in a world with a lot of economic insecurity, of worries about the future, of inequality, poverty, of concerns about jobs. And [Occupy Wall Street] is the manifestation in the U.S.

In 2009, [President Barack] Obama told the bankers, "I'm the only one who's standing between you and the pitchforks." The bankers got the bailouts; they were supposed to extend credit, extend mortgages. They did pretty much nothing, and they went back to the same actions as before: making money through trading. At this point, I think people are fed up with it. Rightly or wrongly, there's a huge amount of anger.



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.

You Need An EFSF That Is 4 Times As Large

You need an EFSF that is 4 times as large as the 440 (billion euros) to make sure that a bad equilibrium and a self fulfilling run on Italy and Spain doesn't occur," he said. "There's no plan for that, because politically even the first EFSF has not yet been approved, let alone to triple it or quadruple it. - in CNBC

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 Mild Or Severe Recession?

The question is not whether or if there is going to be a double dip, but whether it's going to be mild or severe with another financial crisis. The answer on that depends on the euro zone. - in CNBC

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.

Draghi Is In A Tough Spot

Mario Draghi may be forced to prove that he`s got anti-inflation cojones & thus not cut rates 2 days after he turns President even if the EuroZone is in recession. - 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.