Roubini on Russia & Emerging Markets in 2015

Nouriel Roubini, American economist (Английская версия)





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

Emerging Markets in a small storm

The financial turmoil that hit emerging-market economies last spring, following the US Federal Reserve’s “taper tantrum” over its quantitative-easing (QE) policy, has returned with a vengeance. This time, the trigger was a confluence of several events: a currency crisis in Argentina, where the authorities stopped intervening in the forex markets to prevent the loss of foreign reserves; weaker economic data from China; and persistent political uncertainty and unrest in Turkey, Ukraine, and Thailand.

This mini perfect storm in emerging markets was soon transmitted, via international investors’ risk aversion, to advanced economies’ stock markets. But the immediate trigger for these pressures should not be confused with their deeper causes: Many emerging markets are in real trouble.

The list includes India, Indonesia, Brazil, Turkey, and South Africa – dubbed the “Fragile Five,” because all have twin fiscal and current-account deficits, falling growth rates, above-target inflation, and political uncertainty from upcoming legislative and/or presidential elections this year. But five other significant countries – Argentina, Venezuela, Ukraine, Hungary, and Thailand – are also vulnerable. Political and/or electoral risk can be found in all of them, loose fiscal policy in many of them, and rising external imbalances and sovereign risk in some of them.

Then, there are the over-hyped BRICS countries, now falling back to reality. Three of them (Brazil, Russia, and South Africa) will grow more slowly than the United States this year, with real (inflation-adjusted) GDP rising at less than 2.5%, while the economies of the other two (China and India) are slowing sharply. Indeed, Brazil, India, and South Africa are members of the Fragile Five, and demographic decline in China and Russia will undermine both countries’ potential growth.

The largest of the BRICS, China, faces additional risk stemming from a credit-fueled investment boom, with excessive borrowing by local governments, state-owned enterprises, and real-estate firms severely weakening the asset portfolios of banks and shadow banks. Most credit bubbles this large have ended up causing a hard economic landing, and China’s economy is unlikely to escape unscathed, particularly as reforms to rebalance growth from high savings and fixed investment to private consumption are likely to be implemented too slowly, given the powerful interests aligned against them.

Via - http://www.project-syndicate.org/commentary/nouriel-roubini-explains-why-many-previously-fast-growing-economies-suddenly-find-themselves-facing-strong-headwinds





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

Emerging Markets Are not all the Same

"The threat of a full-fledged currency, sovereign-debt, and banking crisis remains low, even in the Fragile Five, for several reasons,"
 "All have flexible exchange rates, a large war chest of reserves to shield against a run on their currencies and banks, and fewer currency mismatches (for example, heavy foreign-currency borrowing to finance investment in local-currency assets). Many also have sounder banking systems, while their public and private debt ratios, though rising, are still low, with little risk of insolvency." Roubini wrote  in a new piece for Project Syndicate.

"Over time, optimism about emerging markets is probably correct," Roubini continued. "Many have sound macroeconomic, financial, and policy fundamentals. Moreover, some of the medium-term fundamentals for most emerging markets, including the fragile ones, remain strong: urbanization, industrialization, catch-up growth from low per capita income, a demographic dividend, the emergence of a more stable middle class, the rise of a consumer society, and the opportunities for faster output gains once structural reforms are implemented."

However, "it is not fair to lump all emerging markets into one basket; differentiation is needed," warned Roubini.

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

Roubini : Many Emerging Markets are in real trouble

"Many emerging markets are in real trouble" Roubini wrote early this month in an article for Project Syndicate. "The list includes India, Indonesia, Brazil, Turkey and South Africa (the 'Fragile Five'), because all have twin fiscal and current-account deficits, falling growth rates, above-target inflation and political uncertainty from upcoming legislative and/or presidential elections this year."

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

Roubini : Emerging Markets fall back to earth

by Nouriel Roubini

The financial turmoil that hit emerging-market economies last spring, following the US Federal Reserve's "taper tantrum" over its quantitative easing (QE) policy, has returned with a vengeance. This time, the trigger was a confluence of several events: a currency crisis in Argentina, where the authorities stopped intervening in the forex markets to prevent the loss of foreign reserves; weaker economic data from China; and persistent political uncertainty and unrest in Turkey, Ukraine and Thailand.

This mini-perfect storm in emerging markets was soon transmitted, via international investors' risk aversion, to advanced economies' stock markets. But the immediate trigger for these pressures should not be confused with their deeper causes: many emerging markets are in real trouble.
The list includes India, Indonesia, Brazil, Turkey and South Africa – dubbed the "Fragile Five" because all have twin fiscal and current-account deficits, falling growth rates, above-target inflation, and political uncertainty from upcoming legislative and/or presidential elections this year. But five other significant countries – Argentina, Venezuela, Ukraine, Hungary and Thailand – are also vulnerable. Political and/or electoral risk can be found in all of them, loose fiscal policy in many of them, and rising external imbalances and sovereign risk in some of them.
read more @ http://www.theguardian.com/business/2014/feb/03/emerging-markets-nouriel-roubini
Nouriel Roubini is an American professor of Economics at New York University`s Stern School of Business and chairman of RGE Roubini Global Economics

Roubini : The Trouble with Emerging Markets

Nouriel Roubini

LAGOS – The financial turmoil that hit emerging-market economies last spring, following the US Federal Reserve’s “taper tantrum” over its quantitative-easing (QE) policy, has returned with a vengeance. This time, the trigger was a confluence of several events: a currency crisis in Argentina, where the authorities stopped intervening in the forex markets to prevent the loss of foreign reserves; weaker economic data from China; and persistent political uncertainty and unrest in Turkey, Ukraine, and Thailand.

This mini perfect storm in emerging markets was soon transmitted, via international investors’ risk aversion, to advanced economies’ stock markets. But the immediate trigger for these pressures should not be confused with their deeper causes: Many emerging markets are in real trouble.

The list includes India, Indonesia, Brazil, Turkey, and South Africa – dubbed the “Fragile Five,” because all have twin fiscal and current-account deficits, falling growth rates, above-target inflation, and political uncertainty from upcoming legislative and/or presidential elections this year. But five other significant countries – Argentina, Venezuela, Ukraine, Hungary, and Thailand – are also vulnerable. Political and/or electoral risk can be found in all of them, loose fiscal policy in many of them, and rising external imbalances and sovereign risk in some of them.

Then, there are the over-hyped BRICS countries, now falling back to reality. Three of them (Brazil, Russia, and South Africa) will grow more slowly than the United States this year, with real (inflation-adjusted) GDP rising at less than 2.5%, while the economies of the other two (China and India) are slowing sharply. Indeed, Brazil, India, and South Africa are members of the Fragile Five, and demographic decline in China and Russia will undermine both countries’ potential growth.

The largest of the BRICS, China, faces additional risk stemming from a credit-fueled investment boom, with excessive borrowing by local governments, state-owned enterprises, and real-estate firms severely weakening the asset portfolios of banks and shadow banks. Most credit bubbles this large have ended up causing a hard economic landing, and China’s economy is unlikely to escape unscathed, particularly as reforms to rebalance growth from high savings and fixed investment to private consumption are likely to be implemented too slowly, given the powerful interests aligned against them.

Read more at http://www.project-syndicate.org/commentary/nouriel-roubini-explains-why-many-previously-fast-growing-economies-suddenly-find-themselves-facing-strong-headwinds#TC6i3WSDheYSMwjB.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

EMERGING MARKETS Decoupling Story Was Over-Hyped

NOURIEL ROUBINI : "Emerging Markets decoupling story was always over-hyped - Fed taper talk reaction shows EMs still linked to developed world." - in Twitter 
Related ETFs: iShares MSCI Emerging Markets (ETF) (EEM), iShares FTSE/Xinhua China 25 Index (ETF) (NYSE:FXI)

Emerging Markets Decoupling Story Was Over-Hyped

Nouriel Roubini : "Emerging markets decoupling story was always over-hyped - Fed taper talk reaction shows EMs still linked to developed world." - in Twitter

Roubini sees weak, V-shaped recovery in Emerging Markets

Economist Nouriel Roubini said that emerging-market growth would fade in this half of 2010 and in 2011, though he continues to predict a “V-shaped” recovery compared to advanced economies’ “U-shaped” path. The World Bank raised its 2010 growth forecast for emerging markets in east Asia excluding China to 6.7 per cent.
via http://blogs.ft.com

Roubini : Emerging markets are growing but rest of the world is not

Nouriel Roubini : "Emerging markets are growing but rest of the world—half of euro zone is not growing, it is contracted, the periphery, Japan is on a verge of a double dip, emerging markets are doing well but many of them like China depend on economic growth in West Europe and Japan. Therefore the slowdown of US, Europe and Japan is already leading to an economic slowdown in China and India and even in Brazil and thus they cannot be remained locomotives of global growth, China is not large enough to be the only engine global growth, we need growth in United States, in Europe and Japan that is not occurring."
via www.moneycontrol.com

Roubini sees more Doom for world economy and the Emerging markets in particular

Speaking at the World Capital Markets Conference in Kuala Lumpur on Monday, World Famous Professor of economics Dr. Nouriel Roubini clearly expressed his pessimism regarding world economy , in particular in the united states he did not rule out a repeat of a major economic recession , where he said about 300 banks have gone bankrupt over the past couple of years.
Nouriel Roubini stated that "nothing has changed fundamentally. When the regulatory reform was passed by the U.S. Congress, my view is too little, too late. We are already in a situation which is going to feel like a recession, (even) if we are not in one." Roubini sees more Doom to come for world economy and in particular for the Emerging markets

Roubini : Emerging markets are doing well

Nouriel Roubini :"Emerging markets are growing but rest of the world—half of euro zone is not growing, it is contracted, the periphery, Japan is on a verge of a double dip, emerging markets are doing well but many of them like China depend on economic growth in West Europe and Japan. Therefore the slowdown of US, Europe and Japan is already leading to an economic slowdown in China and India and even in Brazil and thus they cannot be remained locomotives of global growth, China is not large enough to be the only engine global growth, we need growth in United States, in Europe and Japan that is not occurring."
via www.moneycontrol.com

Arnab Das : Emerging markets not immune to EU crisis

Emerging markets not immune to EU crisis: Roubini Global

May 25, 2010 — In an interview with CNBC-TV18, Arnab Das, Managing Director (Market Research and Strategy) at Roubini Global Economics, spoke about concerns arising out of Spain and the road ahead for global markets.

Nouriel Roubini view on Emerging Markets

Nouriel Roubini on India vs China and Emerging Markets

Roubini : India has edge over China as it is less open

MUMBAI: Emerging markets are behind the curve in tightening monetary policy, according to Prof Nouriel Roubini of Stern School of Business in New York, more famous for his prediction of the crisis in the United States. Addressing a private gathering of... FULL ARTICLE AT ECONOMIC TIMES

Roubini from Davos warns about asset bubbles forming in emerging markets

Roubini though warned against a possible inflating of asset bubbles in emerging markets.
Roubini believes that the US also has a tough job on its hand: “It has to withdraw the stimulus packages or else it runs the risks of runaway fiscal deficits and sovereign defaults in the future. too soon, it also runs the chances of hampering the recovery,” Roubini added . “I would like the US to lay down a path of return of fiscal consolidation in the medium term.”

“I believe that growth in the US would be better in the first half than in the second as that is when it would look to exit its accommodative policy,” Roubini said.