Monday, March 29, 2010
Saturday, March 27, 2010
Friday, March 26, 2010
Fresh from a meeting with Premier Wen Jiabao at the annual China Development Forum, Nouriel Roubini has put out a note to his clients.
The U.S. and China are on a “collision course” over the value of the Chinese currency and investors are underestimating the disruptions for global financial markets, according to Roubini.
“The risk of a collision course on China’s currency peg and a wider trade rift between the world’s largest debtor and creditor nations has risen significantly in recent months,” Roubini wrote in a note to clients. “Markets do not seem to be pricing in the potential consequences of the U.S. labeling China a currency manipulator, which could be significant even if both sides avoid taking immediate bilateral actions.”
Nouriel Roubini, a professor of economics at New York University
Wednesday, March 24, 2010
Nouriel Roubini Chairman of RGE Global Economics , on the FED's 0 Percent Interest Rate Policy
ROUBINI: "Well, yes, in the sense that the economy is still very weak and the recovery is anemic. Unemployment is going to be remaining high. There are more downsides rather than upside risks. So I expect the Fed's going to keep the Fed funds rate at zero through the middle of next year. And they might even do more quantitative easing. Even today, they signaled they may end that program at the end of March. If there was a backup in mortgage rates and that's something you cannot exclude, the last thing you can afford in an election year is a sharp increase in mortgage rates when construction activity is still very weak. So I expect more easy money "
ROUBINI: "Well, for the time being, I expect that long-term bond yields in the U.S. are going to remain low because growth is going to be weak. You'll have deflation. You'll have bouts of risk aversion. The Fed is committed to keep zero rates. The Fed might do more QE. The rest of the world is buying and accumulating reserves to the rate of $1 trillion annualized to prevent their currency from appreciating. That's going to U.S. Treasury, and for the first time in a decade, we have some domestic financing of the U.S. fiscal deficit because savings have gone up, so we don't depend on the kindness of strangers. Given all that, I don't expect bond yields to spike for the time being, but if after the election, we're a divided government, we have run-away fiscal deficit monetize them, then at some point even in the U.S., the bond market vigilantes may wake up the way they did in Greece and UK, around Europe and then you could have a spike in rates. That's a 2011 story, not this year."
Source Hardassetsinvestor.com: From crude to copper, from gold to silver, most commodities have been on a tear lately—but is the rise too much, too fast? So says Dr. Nouriel Roubini, professor of economics at New York University’s Stern School of Business and chairman of the RGE Monitor.
Best known for his accurate predictions of the current financial crisis back in 2005, Dr. Roubini now argues that the world has set itself up for another bubble in risky assets, like commodities—and when the bubble pops, it won’t be pretty……………………………
Monday, March 22, 2010
Professor Nouriel Roubini, and Chairman of RGE a leading New York firm of economic analysts, says securitisation was key to helping banks avoid the regulators
“You make a bunch of mortgages and then you package them and you sell it to someone else,” he explains.
Professor Roubini says that even at the low end of the estimates the potential impact on the rest of the economy is massive.
“If you have a $200bn loss, that reduced your capital by $200bn, you have to reduce your lending by 10 times as much,” he explains.
“So you could have a reduction of total credit to the economy of two trillion dollars”.
The professor predicts that a reduction of credit on that scale will trigger a recession in America which could become global as the contagion spreads through the banking system worldwide.
Friday, March 19, 2010
"My basic scenario is a U-shaped anemic recovery. There is a downside risk of a double-digit recession, low probability, but if growth is going to be only 1.5 percent, it is going to feel like a recession, even if we're technically not in a recession."
Thursday, March 18, 2010
LONDON -- The Great Recession of 2008-2009 was triggered by excessive debt accumulation and leverage on the part of households, financial institutions, and even the corporate sector in many advanced economies. While there is much talk about de-leveraging as the crisis wanes, the reality is that private-sector debt ratios have stabilized at very high levels.
By contrast, as a consequence of fiscal stimulus and socialization of part of the private sector's losses, there is now a massive re-leveraging of the public sector. Deficits in excess of 10 percent of GDP can be found in many advanced economies, and debt-to-GDP ratios are expected to rise sharply - in some cases doubling in the next few years.
As Carmen Reinhart and Ken Rogoff's new book "This Time is Different" demonstrates, such balance-sheet crises have historically led to economic recoveries that are slow, anemic, and below-trend for many years. Sovereign-debt problems are another strong possibility, given the massive re-leveraging of the public sector.
In countries that cannot issue debt in their own currency (traditionally emerging-market economies), or that issue debt in their own currency but cannot independently print money (as in the euro zone), unsustainable fiscal deficits often lead to a credit crisis, a sovereign default, or other coercive form of public-debt restructuring.
Nouriel Roubini is Professor of Economics at the Stern School of Business, New York University and Chairman of RGE Roubini Global Economics , a global macroeconomic consultancy.
Tuesday, March 16, 2010
Nouriel Roubini Chairman of RGE Roubini Global Economics " there is a significant amount of uncertainty about the exit strategy and in my view damn if you do damn if you don't " says Nouriel Roubini " If you exit too soon from the stimulus you end up back into recession deflation if you wait too long and you have run away fiscal deficits and you keep on monetizing them eventually there will be credit risk or high inflation and that's gonna also armed recovery , so the path of exit is going to be very very difficult , and there will be a risk of major policy mistake in election year in the United States or in the UK or in other countries"
The VIX is trading at the bottom of its two-year range, a possible signal that fear is leaving the market. Paul Britton, of the Capstone Holdings Group, and Nouriel Roubini, of Roubini Global Economics, share their insight.
Monday, March 15, 2010
NEW YORK and LONDON, March 15 /PRNewswire/ -- Roubini Global Economics (RGE) announced today that it has made major appointments to its Market Research and Strategy Team. Gina Sanchez has joined the firm as a Director, Equity and Asset Allocation Strategy, Natalia Gurushina has joined as Director, Emerging Markets Strategy and Arun Motianey has been hired as Director, Fixed Income Strategy. These three senior strategists are based in the United States. Jennifer Kapila has joined as Financial Institutions Analyst, based in London, in the United Kingdom. All will work closely with Arnab Das, Managing Director of Market Research and Strategy based in London and New York, and will contribute along with strategists soon to be recruited to give RGE clients expert advice in asset allocation across and within the major asset classes.
"Gina, Natalia and Arun are all outstanding strategists who consistently rate at the top of their field. Jennifer is an incisive financial institutions analyst who is already cutting to the heart of the major challenges in our global banking industry. Their guidance will prove to be of immeasurable benefit to our clients," said RGE Chairman Dr. Nouriel Roubini. "With their addition, we're confident that our market research and strategy team is among the strongest in the industry."
Friday, March 12, 2010
Nouriel Roubini on forbes.com:
A slew of poor economic data over the past two weeks suggests that the U.S. economy is headed for a U-shaped recovery--at best--in 2010. The macro news, including data on consumer confidence, home sales, construction and employment, actually suggests a significant downside risk even to the anemic levels of growth which I forecast for H1 (the first half of the year).
Read the whole story: forbes.com
Wednesday, March 10, 2010
Tuesday, March 9, 2010
Beijing could let the yuan appreciate against the dollar by as soon as next month, ending the Chinese currency’s nearly two-year peg to the greenback, noted economist Professor Nouriel Roubini has told Bloomberg News.
However, "Dr Doom" forecast a “super cautious” move by the Chinese authorities, saying the yuan will be allowed to strengthen by 2% against the dollar initially - followed by an additional 1%-2% appreciation over the next 12 months.
Via The Daily Telegraph
Monday, March 8, 2010
March 8 (Bloomberg) -- China will limit the yuan’s appreciation to 4 percent over the next 12 months because of a “super cautious” outlook on the global economy, said New York University Professor Nouriel Roubini.
The central bank may end a 20-month peg to the dollar as soon as the second quarter, allowing a 2 percent one-step gain, and then let the currency strengthen another 1 percent to 2 percent in 12 months, Roubini said in an interview in New York. The yuan rose 21 percent between July 2005 and July 2008, when the government halted its advance to protect exports.Read full article
March 8 (Bloomberg) -- Bloomberg's Sarah Eisen reports on the outlook for China's yuan
Craig Irvine, co-head of regional research at Daiwa Capital Markets, talks with Bloomberg's Bernard Lo about the outlook for the apprecation of China's yuan. Irvine, speaking in Hong Kong, also discusses his investment strategy for Chinese and Taiwanese stocks. (Source: Bloomberg)
Saturday, March 6, 2010
The U.S. economy is recovering but the private sector has not returned, says Arnab Das, managing director, market research and strategy at Roubini Global Economics. He expects the economy to outperform in the first two quarters and weaken in the second-half. He speaks to Ajay Kapur, global strategist at Mirae Asset Securities and CNBC’s Martin Soong and Sri Jegarajah.
Wednesday, March 3, 2010
Greece is expected to announce new austerity measures late today. Arnab Das, managing director, market research and strategy at Roubini Global Economics speaks to CNBC's Karen Tso and Martin Soong about the impact of these measures.
Tuesday, March 2, 2010
"If Greece goes under, that's a problem for the eurozone. If Spain goes under, it's a disaster," Nouriel Roubini, economics professor at the Stern School of Business at New York University, said at the World Economic Forum in Davos, Switzerland last month.
The Spanish economy, the fifth largest in Europe, has been mired in recession since the end of 2008 as the global financial crisis hastened a correction that was already underway in its once-buoyant property sector.
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Nouriel Roubini nicknamed Dr. Doom and lately Dr. Realist by CNBC , is a professor of economics at the Stern School of Business, New York University and chairman of RGE Roubini Global Economics, an economic consultancy firm . Prof. Nouriel Roubini A world-class economist who offers an unflinching look at the global meltdown and distinctive insights into its course going forward. His research on financial crisis in emerging economics has yielded a unique and now vindicated approach to future collapses. Roubini speaks on the global economic outlook and its implications for the financial markets. From his analysis of past collapses of emerging economies, he has identified common factors that support his predictions of crisis in the US and world markets. He has held several high-level advisory positions in the US government and international finance organisations, published numerous policy papers and books on key international macro-economic issues and is regularly cited as an authority in