Roubini: No Need to Panic Over Debt Ceiling, Yet | NOURIEL ROUBINI BLOG

Wednesday, January 16, 2013

Roubini: No Need to Panic Over Debt Ceiling, Yet

Nouriel Roubini : "In absolute terms, the United States has significant fiscal, growth and unemployment problems,""[But] paradoxically, if we don't reach an agreement in March on the fiscal debt ceiling and we get another downgrade, yields are going to fall, they're not going to go up. Everywhere else, if a country gets a downgrade, the yields go up, in the U.S. it is the opposite." Roubini said at a Reuters conference in New York on Monday , "We have low growth, we have low inflation below target, we have zero federal funds…in 2015, we're doing QE3 (a third round of quantitative easing), maybe QE4," he said. "Every time there is a global bout of risk aversion people go into the dollar and Treasurys," he said. "At the peak of the crisis, the dollar rallied because we are the safest," "Here you have five or six reasons why, in spite of large and unsustainable debt and the [political gridlock] the bond vigilantes are asleep at the wheel- and they're going to stay like that for a while." "Eventually the bond vigilantes are going to figure out that our debts are unsustainable [alongside those] in Europe, in Japan and in emerging markets and…Eventually, if we don't solve our problems, if we [still] have this dysfunctional political system, then the bond vigilantes are going to wake up, but not yet."-

Nouriel Roubini, (born March 29, 1958, Istanbul, Turkey), Turkish-born American economist and educator who was best known for predicting the 2007–08 subprime mortgage crisis in the United States and the subsequent global financial crisis.

Born to Iranian Jewish parents, Roubini moved with his family to Iran and Israel before they settled in Italy in 1962. After a year at Hebrew University of Jerusalem, he studied economics at Bocconi University in Milan (B.A., 1982) and Harvard University (Ph.D., 1988), where he specialized in macroeconomics and international economics. He joined the economics faculty at Yale University in 1988 and taught there until 1995, when he moved to New York University. He also served as a visiting scholar to the International Monetary Fund (IMF), was a research associate with the National Bureau of Economic Research (NBER), held single-year terms on the White House Council of Economic Advisers (1998–99) and at the U.S. Department of the Treasury (1999–2000), and cofounded (2004) the consulting firm Roubini Global Economics. Roubini spent much of his early career studying countries that experienced extreme economic failures, such as Mexico (in 1994), Thailand and other countries associated with the 1997 Asian financial crisis, Russia (1998), and Argentina (2000). He determined that each shared one common element: a massive current account deficit.(www.britannica.com)

Nouriel Roubini is the Chairman and CEO of Roubini Macro Associates, LLC, his own global macroeconomic consultancy firm. He is also a professor of economics at New York University’s Stern School of Business. Dr. Roubini has extensive policy experience as well as broad academic credentials. From 1998 to 2000, he served as the senior economist for international affairs on the White House Council of Economic Advisors and then the senior advisor to the undersecretary for international affairs at the U.S. Treasury Department, helping to resolve the Asian and global financial crises, among other issues. The International Monetary Fund, the World Bank and numerous other prominent public and private institutions have drawn upon his consulting expertise.