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Wednesday, September 2, 2015

Nouriel proposes an early-warning system for Financial Tsunamis




NEW YORK – Recent market volatility – in emerging and developed economies alike – is showing once again how badly ratings agencies and investors can err in assessing countries’ economic and financial vulnerabilities. Ratings agencies wait too long to spot risks and downgrade countries, while investors behave like herds, often ignoring the build-up of risk for too long, before shifting gears abruptly and causing exaggerated market swings.
Given the nature of market turmoil, an early-warning system for financial tsunamis may be difficult to create; but the world needs one today more than ever. Few people foresaw the subprime crisis of 2008, the risk of default in the eurozone, or the current turbulence in financial markets worldwide. Fingers have been pointed at politicians, banks, and supranational institutions. But ratings agencies and analysts who misjudged the repayment ability of debtors – including governments – have gotten off too lightly.
In principle, credit ratings are based on statistical models of past defaults; in practice, however, with few national defaults having actually occurred, sovereign ratings are often a subjective affair. Analysts at ratings agencies follow developments in the country for which they are responsible and, when necessary, travel there to review the situation
Read more at http://www.project-syndicate.org/commentary/financial-early-warning-system-by-nouriel-roubini-2015-08#i0wtiAdvcCR4fAsL.99




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

Tuesday, September 1, 2015

Jay Shambaugh a great choice for the CEA!


Nouriel Roubini ‏: "@CEAChair: Jay Shambaugh is an excellent international macro economist dedicated to public service". Indeed a great choice for the CEA! - via twitter @Nouriel Aug 26






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

Monday, August 31, 2015

Roubini ‏: CEA’s loss is the World’s Gain



Nouriel Roubini ‏: "@CEAChair: CEA’s loss is the world’s gain, best wishes Maury https://www.imf.org/external/np/sec/pr/2015/pr15343.htm …" Excellent choice of Maury for IMF Chief Economist job -- Via twitter





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

Saturday, August 29, 2015

Brazil should have been downgraded below investment grade last year

 Read more at http://www.project-syndicate.org/commentary/financial-early-warning-system-by-nouriel-roubini-2015-08#Bhlurxy2j6VkCPhD.99


Brazil should have been downgraded below investment grade last year, as the economy struggled with a widening fiscal deficit, a growing economy-wide debt burden, and a weak and worsening business environment. The corruption scandal at energy giant Petrobras is finally causing ratings agencies to reassess Brazil, but the move comes too late, and their downgrades probably will not be sufficient to reflect the true risk. Other emerging markets also look fragile and at risk of an eventual downgrade.







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

Friday, August 28, 2015

IMF Appoints Maurice Obstfeld as Economic Counselor -- Excellent choice!



Nouriel Roubini ‏: IMF Appoints Maurice Obstfeld as Economic Counselor and Director of the IMF's Research Department https://www.imf.org/external/np/sec/pr/2015/pr15343.htm … Excellent choice! - Nouriel via Twitter







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