Roubini : European Banks Need Major Recapitalization

Europe’s banks, struggling amid a sovereign debt crisis, need a “major recapitalization” if the region is to avert disaster,
Stimulus is needed and there is “not enough emphasis being given to economic growth in the euro zone,”
there is no single measure that will save the region from economic crisis. The euro zone must lower interest rates,
“huge mistake” to raise rates this year. Nouriel Roubini told reporters in Johannesburg today - in Bloomberg

Roubini calls on Greece to return to the drachma

“The recent debt exchange deal Europe offered Greece was a rip-off, providing much less debt relief than the country needed”, said Nouriel Roubini in the Financial Times article. Roubini calls for Greece to leave the Euro and go back to the Drachma , "A return to a national currency and a sharp depreciation would quickly restore growth and competitiveness, as it did in Argentina and many other emerging markets that abandoned their currency pegs," he said.

Even if leaving the euro area would be hard, a return to the national currency “will restore competitiveness and growth, as was the case for Argentina and other emerging markets that have cut monetary anchors”, "Overnight, the foreign liabilities of Greece's government, banks, and companies would surge," said Roubini. "Yet these problems can be overcome. Argentina did so in 2001, when it converted its dollar debts into pesos. The U.S. did something similar in 1933, when it depreciated the dollar and repealed the gold clause."

"Like a broken marriage that requires a break-up, it is better to have rules that make separation less costly to both sides" said Roubini. - in The Financial Times article

Roubini : Greece Should Default And Abandon The Euro

Nouriel Roubini : Greece should begin an orderly default, voluntarily leave the euro zone and return to the drachma in a bid to escape a vicious cycle of insolvency, low competitiveness and depression,

The recent debt exchange deal Europe offered Greece was a rip-off, providing much less debt relief than the country needed,

Its best current option would be to reject this agreement and, under threat of default, renegotiate a better one,... - in the Financial Times.

The real public debt of China is 80 percent of GDP

Nouriel Roubini : If you are looking at the Chinese banks they have a huge amount of exposure to state and local government to state owned enterprise and to these special purpose vehicles that have done the financing of the local investment , has been several trillion Yuans , now we estimate that about 30 percent of these loans are going to go into default and becoming non performing , so the aid is going to be certainly on the Chinese banks some of them are going to be back stopped by the local government if the local government cannot do the job it is going to be the central government , at the end of the day the banking crisis are going to be losses of some agents of the government either state owned banks or the provincial government or the central government and that's why the official debt of China is 17% of he GDP at the central level but when you add the banks the state and local government and all the other liabilities we are already estimating that the public debt of China is already 80% of GDP , so you are going to have an MPL problem , you'll have a public debt and deficit problem then you'll going to have an investment boom going bust problem and that's why we are going to have a hard landing in China by 2013 at the latest - in Bloomberg

Nouriel Roubini : We are entering new recession

Nouriel Roubini : In August 0% jobs & retail sales growth. September looks worse based on initl unemp claims & other indicators. We are entering a recession

At this point the question is not double dip or not but rather how deep the recession will be: answer depends on policy response & EZ crisis - Nouriel Roubini via Twiter

Chris Whalen vs. Nouriel Roubini on Karl Marx Being Right

Chris Whalen : "Marx created the term 'capitalism'. It's a pejorative, insulting description that says all economic activity is a matter of greed," . "If you're any sort of libertarian. If you believe in American principles of democracy and free enterprise, just the fact we use the term 'capitalism' should insult you. We need new labels." Whalen explains

Severe Depression Without Massive New Stimulus

Nouriel Roubini : “I thought a few months ago that the perfect storm would be 2013, but now, the economic weakness in the U.S., eurozone and U.K. is front-loaded.” “So we’re going to double-dip earlier. The climax of it could be 2013 or it could be already earlier.” “There’ll be more monetary easing and quantitative easing done by the Fed and other central banks, but the credit channel is broken.” Nouriel Roubini told Bloomberg News. “Things are getting worse, and the big difference between now and a few years ago is that this time around, we’re running out of policy bullets.” “America’s recent data have been lousy: there has been little job creation, weak growth and flat consumption and manufacturing production. Housing remains depressed. Consumer, business and investor confidence has been falling, and will now fall further.” “Until last year policymakers could always produce a new rabbit from their hat to trigger asset reflation and economic recovery.” Roubini writes. “Zero policy rates, QE1, QE2, credit easing, fiscal stimulus, ring-fencing, liquidity provision to the tune of trillions of dollars and bailing out banks and financial institutions – all have been tried. But now we have run out of rabbits to reveal.” he added.


Nouriel Roubini, co-founder and chairman of Roubini Global Economics LLC. Roubini tells Brloomberg , "we're going into a recession based on my numbers" and that the Federal Reserve and other authorities no longer have the ability to provide emergency support.

Eurozone needs more fiscal consolidation

Brussels (5 September) Nouriel Roubini speaking at the Nicolas Berggruen institute press conference about the future of Europe. : If Europeans do not move forward in the direction of greater economic and fiscal union, there will be a financial breakdown , or disentegration , with every country going in its own direction , first of all that would damaging for everybody but also it will be very damaging for the core of the Eurozone in Germany which benifited significantly from a common market a common currency and stability that has led to significant opportunity

We need to do massive stimulus; otherwise, there is going to be another Great Depression

Nouriel Roubini  : “I thought a few months ago that the perfect storm would be 2013, but now, the economic weakness in the U.S., eurozone and U.K. is front-loaded,” “So we're going to double-dip earlier. The climax of it could be 2013 or it could be already earlier,” “It depends on what policy tools are available " With the eurozone in crisis, facing a record-high cost for insuring bank debt, there is a 60% probability that most advanced economies will fall into a recession, . Roubini said. “In the short term, we need to do massive stimulus; otherwise, there's going to be another Great Depression,” “Things are getting worse, and the big difference between now and a few years ago is that this time around, we're running out of policy bullets.”

The ECB has made The Biggest Mistake in the past 10 years

The European Central Bank must signal this week that it will cut interest rates, reversing the "biggest mistake" it has made in the past 10 years, economist
"It is not enough to do fiscal austerity because if you don't have economic growth you can try to reduce debt and deficit, but if the denominator [collapses] then you're not going to achieve sustainability," Nouriel Roubini told CNBC Europe in an interview Monday

Invest in Cash in US Dollars

Nouriel Roubini : mostly keep it in cash, especially in dollars, as the U.S. currency tends to strengthen during financial crises. Roubini said he would also favor government bonds of countries with small budget deficits and low public debt, such as Canada and Australia, and avoid stocks and commodities. If we see a nasty global recession, then risky assets, starting with equities, are going to hurt and going to hurt big time, - in Bloomberg

There is a 60 percent probability that most advanced economies will fall into a recession

Nouriel Roubini : I thought a few months ago that the perfect storm would be 2013,. But now, the economic weakness in the U.S., Euro zone and the U.K. is front loaded. So we’re going to double dip earlier. The climax of it could be 2013, or it could be already earlier. It depends on what policy tools are available..... There’s a 60 percent probability that most advanced economies will fall into a recession, while authorities are running out of options to provide emergency support, You need to restore economic growth, not five years from now, you need to restore it today,” Roubini said. “In the short term, we need to do massive stimulus, otherwise there’s going to be another Great Depression. Things are getting worse and the big difference between now and a few years ago is that this time around we’re running out of policy bullets - in Bloomberg

Italy needs a new technical government NOW

Nouriel Roubini : "The only thing you really need to do now is to change the government." Nouriel Roubini said in an interview with the Italian news paper La Repubblica, commenting on the situation of the Italian economy. "Everything else comes next," he added, "but this is the most pressing, most importantly of interventions on the deficit: Italy must send home the present Cabinet, which has lost all international credibility, and put to work a group of competent economists interested in the fate of the country, not only in their own interests. " " A GOVERNMENT TECHNICAL NOW ". Should be " the task force," "to study the necessary measures."Roubini said, "Italy is on the brink of recession, perhaps it is already in it. This is the truth. It is no longer just a matter of attitude and behavior of the prime minister, it is the government as a whole to have given evidence of incapacity. " Roubini added

Roubini : We are in a worse situation than we were in 2008

"No More Policy Rabbits Left" Nouriel Roubini, Co-founder and Chairman of Roubini Global Economics said Speaking at the Ambrosetti Forum on the shores of Lake Como, in Northern Italy on Friday 02 Sep 2011 “We are in a worse situation than we were in 2008. This time around we have fiscal austerity and banks that are being cautious.” he added ."The market may rally but unless the real economic data moves with asset prices, then eventually asset prices are going to go," he said. "Last year the economic data was already improving when QE2 was introduced." "Every time we had an economic downturn and a market downturn, we had all the policy bullets, we'd take another policy rabbit out of the hat and try to restimulate the economy and the market, but this time around we'll have fiscal austerity throughout advanced economies, our ability to backstop banks and financial institutions is limited by the fact that there is resistance to it and not every country can weaken their currency," he explained

Roubini : risk of a double dip recession in most advanced economies

Nouriel Roubini : I do not see a global recession in the sense that the emerging markets that account for half of the economy are going still grow robustly , but I certainly see a situation where a risk of a recession or a double dip is significant not only in the US but also in the most advanced economies , if you look at the peripheral of the Eurozone they are already in a contraction Greece Ireland Italy Portugal and Spain the UK had no economic growth for three quarters....." Nouriel Roubini speaking to Bloomberg from Cernobbio in Italy - Sept 02 2011

Roubini : The Risk of recession is now at 60 percent

Nouriel Roubini : first of all we have reached the stall speed in the economy not just the US but also in the Eurozone the UK the most advanced economies , so we see a probability of 60 percent recession next year , and unfortunately we are running out of policy tools , every country is doing fiscal austerity and there is going to be a fiscal drag the ability to back stop the bank is now impossible because of political constrains insolvency , cannot anymore bailout their own distressed banks because they are distressed themselves , everybody would like a weaker currency but in an equilibrium if a currency is weak the others has to be stronger and there going to be more monetary easing more quantitative easing by the FEd and other central banks but the credit channel is broken

Roubini : QE3 Will Be Launched By Year End

Nouriel Roubini : QE3 will be launched by the year end, reason being that the US is heading for a recession and a liberal monetary policy is one of the few policy measures remaining with the Federal Reserve. According to him the likelihood of a double-dip recession is 50 percent. - in www.forexdice.com

Roubini : The Fed will conduct what I have been calling permanent zero

Nouriel Roubini : The Fed is likely to soft peddle this policy change… so the Fed could start off by signalling to the market that it will conduct what I have been calling 'permanent zero'. Eventually people will be forced to accept this – and the term structure will flatten further and further out the curve. - in CNBC

We had a massive redistribution of income from labour to capital, from wages to profits

Nouriel Roubini : "If you are not hiring workers, there is not enough labour income, there is not enough consumer confidence, there is not enough consumption, there is not enough final demand. "And the last two to three years we've had actually worse than this because we had the massive redistribution of income from labour to capital, from wages to profits, inequality of income and wealth has increased. The margin of propensity to spend of a household is greater than the margin of propensity to spend of a firm because they have a higher margin of propensity to save, firms compared to households. So that redistribution of income and wealth makes the problem of excessive lack of aggregate demand even worse. - in www.theaustralian.com.au

Roubini : this year Cash is going to be king

Nouriel Roubini : It`s better to be safe rather than sorry and this year cash is going to be king, Therefore we would stay away from a wide range of risky assets. Cash gives you zero return but that`s better than losing 20% or 30% in the stock market. Treasury bonds are at 2%, but they could go toward 1% in a recession. - in CNBC

Nouriel Roubini on what to expect from Bernanke speech

Nouriel Roubini : ".....but the reality is we are headed towards a recession and we're running out of policy bullets. one of the few policy bullets left is for monetary policy or Quantitative easing. initial claims, announced layoffs, gdp numbers were low and they will be even lower tomorrow morning for QE2, home sales collapsing, starts still down, every economic indicator suggests we're already beyond the stall speed, we're at the beginning of an economic contraction at this point ....

Nouriel Roubini & Mohamed El-Erian on the Double-Dip Recession

Nouriel Roubini : well the probability of a double dip recession right now in my view is at least at 50 percent not just in the United States but also in most of the periphery of the Eurozone the united Kingdom and Japan had a double dip now they are recovering from the earthquake but their structural growth is anemic , it is a situation in which there was too much debt in the private sector now there is too much debt in the public sector and this painful process of delivering we need to spend less to save more to reduce your debt implies weak economic growth , but the economic growth have now become so weak most of these economies are at a stall sped it is like an airplane that decelerates to the point in which it reaches a stall speed either you accelerate and you get to escape velocity or otherwise you start a free fall

Nouriel Roubini : QE3 started

Nouriel Roubini : QE3 started in Japan & Switzerland via fx action &/or monetary easing. Fed will eventually get to QE3 but it will be too little too late - via Twitter

Nouriel Roubini : Social unrest will spread

Nouriel Roubini : "Recent popular demonstrations, from the Middle East to Israel to the UK, and rising popular anger in China - and soon enough in other advanced economies and emerging markets - are all driven by the same issues and tensions: growing inequality, poverty, unemployment, and hopelessness,"  "Even the world’s middle classes are feeling the squeeze of falling incomes and opportunities."  - in www.globes.co.il

Nouriel Roubini : Both American and European Economic models are broken

Nouriel Roubini :  Countries need to return to the right balance between markets and provision of public goods. That means moving away from both the Anglo-Saxon model of laissez-faire and voodoo economics and the continental European model of deficit-driven welfare states. Both are broken."

Nassim Taleb : The Banks are more powerful today than they were before the crisis

Nassim Taleb : I do not think the bad news would be the recession , the bad news is continuing to commit the same mistake , too much debt, the tumor at the center of the system that has not been removed it is when someone makes money and gets a bonus and when they lose money we pay the price , tax payers future generations , the core of the problem is that asymmetry in pay off , socializing the losses and privatizing the gain and the generator of that inequity is still there , what has happen since the crisis , these people got us here and they are raping the benefits as an industry they have not suffered , you have people in the street unemployed people , you have the federal reserve doing everything to finance these bonuses , I am outraged ....the first time we bailed out the bank was in 1982 - 83 during the Reagan years and they said OK this should never happen again but the fact that bailed out the banks then and in 87 again and keep repeating it gave the banks the feeling that they could hijack society to extract that bonus system that is extremely sneaky , since they know that if they are making mistakes someone else will pay for it but if they make the money they get the benefits , in 2008 when they bailed out the banks once again they should've set the ground to remove that problem they did not , the banks today have hijacked the government , it is like inverse of hat the french did they socialized the banks in 1981 while here it is the banks who took over the government , it is not like the banks should be taking more risk or less risk , the banks should be something others than machines to generate themselves bonuses , the banks should be something more like utility , we are bailing them out because they are a utility otherwise we will let them die like other business like the car industry , we should remove that problem that has not been addressed , today the banks are vastly more centralized than they were before the crisis they are much more powerful than they were before they have incredibly snaky lobbying in Washington and it looks like every monetary policy w have had in the United States for about ten years were there to accommodate them and today more than ever , so we have not solved the problems that got us here...we have wasted three years doing nothing but transferring money to the pockets of the bankers ....

Nouriel Roubini : time to rush to your mountain log cab

Nouriel Roubini  : when Banks and deposits are not safe and governments are bankrupt it is time to buy canned food spam , guns , ammo , gold bars and rush to your mountain log cab " - via twitter

Roubini : KARL Marx was right

Nouriel Roubini : "Karl Marx had it right. At some point capitalism can self-destroy itself because you cannot keep on shifting income from labour to capital without not having excess capacity and a lack of aggregate demand, and that's what's happening." - in an interview with The Wall Street Journal this week

Nouriel Roubini : Invest in Cash

Nouriel Roubini : I am putting most of my money in cash , one of the clienbts of my research firm a sophisticated high network individual have decided to put a billion a billion dollar of his financial network last month all hundred percent into cash , I would say now better to be safe than sorry , we do not know whether this volatility is temporary and things will improve or whether there 'll be a nasty recession and another 30 to 40 percent fall in equity prices so until the fog of uncertainty is resolved, my view is that it’s better to be safe rather than sorry. This is not the time to be in risky assets ...commodities are going to collapse if there is a recession like other risky assets ,Gold is a hedge against tail risks and a financial meltdown, If you get to that point of paranoia, it’s time to buy canned food, guns, ammunition, gold bars and a log cabin in the mountains,” Nouriel Roubini recommends cash over gold an other commodities ....

Nouriel Roubini : this is not the time to be in risky assets

Nouriel Roubini : I am putting most of my money in cash , one of the clienbts of my research firm a sophisticated high network individual have decided to put a billion a billion dollar of his financial network last month all hundred percent into cash , I would say now better to be safe than sorry , we do not know whether this volatility is temporary and things will improve or whether there 'll be a nasty recession and another 30 to 40 percent fall in equity prices so until the fog of uncertainty is resolved, my view is that it’s better to be safe rather than sorry. This is not the time to be in risky assets ...commodities are going to collapse if there is a recession like other risky assets ,Gold is a hedge against tail risks and a financial meltdown, If you get to that point of paranoia, it’s time to buy canned food, guns, ammunition, gold bars and a log cabin in the mountains,” Nouriel Roubini recommends cash over gold an other commodities ....

Nouriel Roubini on the S&P debt downgrade and its implications on the market

Nouriel Roubini : they (the S&P) went ahed now for a number of reasons first of all they downgraded a bunch of european countries and the Europeans were bashing the rating agencies ' why are you downgrading us and not downgrading the United States ? ' then they cornered themselves at the time of the debt ceiling debate by saying that unless there is a 4 trillion dollar deficit reduction we are going to downgrade you while the others were saying may be not an at this point given the market volatility in the last couple of days they can downgrade right now and if there is going to be a turmoil in the markets on Monday they could say ' hey it is not our fault it is may be because there is market volatility ' the reality is that they contributed to the crisis that caused them to then leading them to downgrade , there is no fundamental reason at this point compared to a few months ago for a downgrade the thing that has changed right now may be is a greater risk of deep recession and that's the only fundamental difference ....

Nouriel Roubini appears at around 04:35 in the video

Roubini : The probability of a Double Dip recession is at least 50 percent

Nouriel Roubini : The probability of a Double Dip recession in my view is now at least 50 percent not just in the United States but also in most of the periphery of the Eurozone , there was too much debt in the private sector now there is too much debt in the public sector , the economic growth has now become so weak that most of there economies are now at stall speed

Roubini : we are headed towards a double dip recession

Nouriel Roubini : the ECB is going to start buying the bonds of Spain and Italy but they cannot do it for long ...we are running out of rabbits because every country including the US is going to do fiscal austerity via fiscal drag it is going to worsen growth because we cannot backstop anymore our banks , we may be doing another quantitative easing in the US but what difference it is going to make a QE3 when the last one did not made much of a difference , and everybody now wants to have a weaker currency to grow their exports , but in an equilibrium not all the currencies can be weaker , this will just lead to currency wars ....it is becoming harder to have policy coherence between different countries

Nouriel Roubini Discusses the US Downgrade

Roubini, Rosner, Bianco and Romer Discuss US Downgrade .
Nouriel Roubini : they went ahead now for a number of reasons first of all they downgraded a bunch of European countries , and the Europeans were bashing the rating agencies 'why are you downgrading us and not downgrading the United States' , then they cornered themselves at the time of the debt ceiling debate by saying that unless there is a 4 trillion deficit reduction we are going to downgrade you while the other are saying may be not and at this point giving the market volatility in the last couple of days they can downgrade now and if there is going to be turmoil in the markets Monday they could say , Hey it is not our fault , it is may be because there is market volatility the reality is they contributed to the crisis that cause them leading to the downgrade , there is no fundamental reason at this point compared to few months ago for a downgrade the thing that has changed may be right now , there is a great risk of double dip recession and that's may be the only fundamental difference ....



Nouriel Roubini, chairman of Roubini Global Economics LLC, Joshua Rosner, managing director of Graham Fisher & Co. and Jim Bianco, president of Bianco Research LLC talk with Bloomberg's Michael McKee about Standard & Poor's downgrade of the U.S. credit rating to AA+ from AAA. Bloomberg contributor Christina Romer also speaks with Adam Johnson (Source: Bloomberg)

Nouriel Roubini Bloomberg Interview 05 Aug 2011

Nouriel Roubini : it is going to feel like a recession for most people even if technically we are not in a recession , at this point we are also running out of policy bullets, QE will no make much of a difference ...