In China : The Investment Bubble deflates and net Exports shrink

Nouriel Roubini : In China, a hard economic landing looks increasingly likely as the investment bubble deflates and net exports shrink. Meanwhile, the reforms necessary to reduce savings and increase private consumption are being delayed. As in Europe and the US, the worst will be avoided in 2012 only by kicking the can down the road with more monetary, fiscal, and credit stimulus. But a hard landing becomes more likely in 2013, as the stimulus fades, non-performing loans rise, the investment bust accelerates, and the problem of rolling over the debts of provincial governments and their special investment vehicles can no longer be papered over. And, given a new leadership’s caution as it establishes its power, reforms will occur at a snail’s pace, making social and political unrest more likely. - in Project Syndicate

Brazil, India, Russia Slowing Down too

Nouriel Roubini :....Meanwhile, Brazil, India, Russia, and other emerging economies are playing the same game. Many have not adjusted as advanced economies’ weakness reduces the room for export-led growth; and many delayed structural reforms needed to boost private sector development and productivity growth, while embracing a model of state capitalism that will soon reveal its limits. So the recent slowdown of growth in emerging markets is not just cyclical, owing to weak growth or outright recession in advanced economies; it is also structural. - excerpt from project syndicate

Growth less than 2 percent in Q4 & No significant reduction in the Unemployment Rate

Nouriel Roubini : “By the fourth quarter, with the fiscal cliff coming and firms becoming more cautious, capital spending is slowing down and growth will be not even 2 percent,”
“Job creation might be around 100,000 or slightly higher for the next few months, but there’s not going to be any significant reduction in the unemployment rate.” - in CNBC

The last thing the world needs is another war in the Middle East

Nouriel Roubini : "The last thing the world needs given its fragility is another war in the Middle East and a spike in oil prices," - in The Sydney Morning Herald

Nouriel Roubini : Gold unlikely to go Back to $1900

Nouriel Roubini : My view is people should be just market weighting Gold , because even if there is more printing of money there is no inflation in advanced economies because there is a slack in goods in liberal market , weak economic growth so that the reason to hold because of inflation is not real , in other situations gold could rise if you have another global financial meltdown but those risks are still limited and actual when turmoil does occur sometimes gold prices fall sharply because you have a credit crunch and people sell the winners and many positions in gold are highly leveraged , so gold has been very volatile , it went up all the way to $1900 in September of last year but then it went down to $1500 and it has been moving in the range between $1500 and $1600 , so to me it's a speculative investment it has gone up so much that significant further increase are unlikely everybody should have it market weighted in their portfolio and I would not recommend over weighting gold - in Reuter Interview
Click here to watch the full interview>>>>>>

[Video] The Euro More Likely to Break Up Than to Make Up

Nouriel Roubini : you cannot resolve the eurozone crisis only with money , and the ECB has been clear you need progress on the structure on the economic on the fiscal union on banking union economic union on political integration ....

Sept. 7 - Nouriel Roubini, says the ECB's plan to buy government bonds will help the euro zone, but will not solve all its problems.

Roubini : The ECB Move only Buys The Eurozone some Time

Fiddling at the Fire :
PARIS – Financial markets have rallied since July on the hope that the global economic and geopolitical outlook will not worsen, or, if it does, that central banks stand ready to backstop economies and markets with additional rounds of liquidity provision and quantitative easing. So, not only has good – or better-than-expected – economic news boosted the markets, but even bad news has been good news, because it increases the probability that central-banking firefighters like US Federal Reserve Chairman Ben Bernanke and European Central Bank President Mario Draghi will douse the markets with buckets of cash.
 But markets that rise on both good and bad news are not stable markets. “Risk-off” episodes, in which investor sentiment sours, are likely to return if economic news worsens and confidence in policymakers’ effectiveness drops.

In the eurozone, euphoria followed the ECB’s decision to provide support with potentially unlimited purchases of distressed countries’ bonds. But the move is not a game changer; it only buys time for policymakers to implement the tough measures needed to resolve the crisis. And the policy challenges are daunting: the eurozone’s recession is deepening as front-loaded fiscal consolidation and severe credit rationing continues. And, as eurozone banks and public-debt markets become increasingly balkanized, establishing a banking union, a fiscal union, and an economic union while pursuing macroeconomic policies that restore growth, external balance, and competitiveness will be extremely difficult.

in Project syndicate : Click here to continue reading >>>>>

Catalonia Independence Becoming Hot issue after Mass Demonstrations in Barcelona

Nouriel Roubini : "I am in Barcelona for policy meetings and a keynote talk. Catalan independence is becoming hot issue following mass demonstration this week "
"Had lunch today with brilliant Andreu Mas-Colell. He taught me micro theory 1st year of Harvard PhD & is now Catalonia's Economic Minister " - in twitter

[Video] Nouriel Roubini - Which future for Europe?

Nouriel Roubini : ...today Italy and Europe is in an economic crisis a banking crisis financial crisis a fiscal crisis however there is hope for Italy and the Eurozone , if Italy and the Eurozone move in the right direction of a greater union not just a monetary union but also a banking union a fiscal union an economic union to restore growth competitiveness external balance and then also a political union if you're going to move power from nation states to center to provide democratic legitimacy , then the Eurozone can survive an thrive ...

ROUBINI: Unemployment in America Wont Improve

Nouriel Roubini : “By the fourth quarter, with the fiscal cliff coming and firms becoming more cautious, capital spending is slowing down and growth will be not even 2 percent,”
“Job creation might be around 100,000 or slightly higher for the next few months, but there’s not going to be any significant reduction in the unemployment rate.” - in business insider

Roubini ‏: Credible Fiscal Consolidation is Key

Nouriel Roubini ‏: " I am in Paris for policy & business meets. Credible fiscal consolidation is key. So far ad hoc actions w/o credible midterm spending cuts " - in twitter

Roubini : We Face up to a Decade, of Low Economic Growth

Nouriel Roubini : "History suggests that whenever (there is) a crisis with too much private debt first and public debt second you have a painful process of deleveraging,"
"That would imply many years, up to a decade, of low economic growth. And guess what? Economic recovery in the U.S. has been unending and in the eurozone and U.K. there's outright economic contraction right now, and that's not going to change unfortunately in the next few years." Roubini said during a meeting on the world economy in Cernobbio, Italy, Friday, Sept. 7, 2012 - in deseretnews

Roubini to CNBC : QE3 Is Coming

Nouriel Roubini told CNBC, "I would say the US economy is weak enough and employment is high enough that the Federal Reserve will do QE3 eventually." “By the fourth quarter, with the fiscal cliff coming and firms becoming more cautious, capital spending is slowing down and growth will be not even 2 percent,” “Job creation might be around 100,000 or slightly higher for the next few months, but there’s not going to be any significant reduction in the unemployment rate.” “If you get the fiscal drag as growth slows, you’re close to zero growth next year, he said. “This implies that by December the Fed is going to do a third round of QE3.”

Nouriel Roubini : QE3 on Its Way

Nouriel Roubini : “If today’s jobs number is ok then the Fed can wait to do QE3,” Roubini told CNBC at the Ambrosetti Forum in Lake Como, Italy. “Yet the economy is weak enough and the unemployment rate weak enough that the Fed is going to do QE3 eventually.” - in CNBC

Roubini : The Eurozone is disintegrating , either move forward or you are going to fall off a cliff

Nouriel Roubini : "History suggests that whenever (there is) a crisis with too much private debt first and public debt second you have a painful process of deleveraging," said Roubini at the annual Ambrosetti Forum at Lake Como on Friday 07 Sept 2012 "That would imply many years, up to a decade, of low economic growth. And guess what? Economic recovery in the US has been unending and in the eurozone and UK there's outright economic contraction right now, and that's not going to change unfortunately in the next few years."
"Today the eurozone is disintegrating. ... either move forward or you're going to fall off a cliff." - in New Zealand Herald

Roubini : Here is My Blueprint for the Future

Nouriel Roubini discusses his thoughts on Mario Draghi's bond buying plan, the euro and U.S. fiscal policy."...In the short run it is positive for the Euro because it means that the risk of a break-up is lower but then they are going to actively start buying the debt of the periphery and effectively that's a variant of debt monetization over time that could weaken gradually the value of the Euro "

Roubini : QE3 most likely in December

Nouriel Roubini : Quite dismal employment report confirming anemic US economic growth. QE3 is only a matter of when not whether, most likely in December - in twitter

Roubini : I Am open to Serious Medicare Reform

Nouriel Roubini :" It is one thing 2 Reform Soc,Medicare & tax system while making it more progressive.It is another to slash gov size close 2 nothing as Ryan "
" Am open 2 serious Medicare reform @JimPethokoukis:You do realize Domenici-Rivlin has premium support Medicare.I recall that you slammed Ryan "

The Future of the Eurozone will be decided here in Germany

Nouriel Roubini : " I am in Berlin today/tomorrow for policy meetings. The future of the Eurozone will be mostly decided here in Germany/Berlin " - in twitter

Highly unlikely that the ECB will announce formal and explicit targets for bond yields

Nouriel Roubini : Highly unlikely that the ECB will announce formal and explicit targets for bond yields. - in twitter

Roubini : There is Bailout Fatigue in Germany The core of the Eurozone

ROUBINI: ... I would argue that in Germany in the core of the eurozone, there is also bailout fatigue. They say, for example, the Greeks had a Big Fat Greek Wedding, not for long weekend but for the last 20 years. We give them a first bailout, a second bailout, many Germans want to pull the plug. In China, you have a new government at the end of the year. Either they move away from net exports, from too much savings, from too much capital investments towards more consumption, or otherwise by next year China could have also a hard landing. In the U.S., we have shale gas. I think it has been hyped a bit too much. It's going to help the energy needs of the U.S., but that revolution may take 10 to 20 years. If there is a war in the Middle East next year, the shock to all prices is going to tip the U.S. into a recession because we're not going to be energy independent for at least another decade. - in NPR interview

Roubini : Q3 improvement may be head fake

Nouriel Roubini :  " Empire State & Philly Fed surveys remain depressed bucking the better signals from industrial production. Q3 improvement may be head fake " - in twitter

Nouriel Roubini in Switzerland for a 2 weeks European tour

Nouriel Roubini : " I am in Europe for the next two weeks for policy and business meetings. First stop today/tomorrow is Zurich " in twitter

Roubini : Recession Deepens in Italy

Nouriel Roubini ‏: " I am in Rome today for meetings. Italian spreads defrosting as Merkel supports Monti & ECB ready to intervene. But Italy's recession deepens " - in twitter

Roubini : Europe Risks irreversible Balkanization of the Banking System and Financial Markets

Nouriel Roubini : Thus, Germany and the eurozone core have increasingly outsourced official financing of the eurozone’s distressed members to the ECB. If Italy and Spain are illiquid but solvent, and large-scale financing provides enough time for austerity and economic reforms to restore debt sustainability, competitiveness, and growth, the current strategy will work and the eurozone will survive. In the process, some form of fiscal and banking union may also emerge, together with some progress on political integration. But, however important the fiscal and banking union elements of this process may be, the key is whether large-scale financing and gradual adjustments can restore sustainable growth in time. This will require considerable patience from governments and publics in the core and periphery alike – in the former to maintain large-scale financing, and in the latter to avoid a social and political backlash against years of painful contraction and loss of welfare. Is this scenario plausible? Just consider what must be overcome: economic divergence and deepening recessions; irreversible balkanization of the banking system and financial markets; unsustainable debt burdens for public and private agents; daunting growth and balance-sheet costs in countries that pursue internal devaluation and deflation to restore competitiveness; asymmetrical adjustment, with moral-hazard risks in the core and insufficient financing in the periphery fueling incompatible political dynamics; fickle and impatient markets and investors; austerity fatigue in the periphery and bailout fatigue in the core; the absence of conditions for an optimal currency area; and serious difficulties in achieving full fiscal, banking, economic, and political union. - in Project-syndicate

Roubini: My Perfect Storm Scenario Is Unfolding Now

Nouriel Roubini : " EZ/UK in deeper recession; China growth faltering;other BRIC slowing rapidly; US slowing sharply & facing the cliff; Iran-Israel tensions up " - in twitter

Nouriel Roubini : There are 2 Options for Europe & the Eurozone

Nouriel Roubini on Eurozone future : either Europe moves forward or there is going to be disintegration " There are two options for Europe and the Eurozone either you move forward or you move backward , moving forward means to implement policies that are gonna restore growth restore competitiveness restore external balance restore debt sustainability and gradually bring greater integration ..."

Roubini : The only thing that can lift markets is Fireman BenBernanke liquidity hose in Jackson Hole

Nouriel Roubini : " The only thing that can lift markets is Fireman Ben's liquidity hose in Jackson Hole & expectations of more QE by BoE/ECB/BoJ/PBoC/other CBs " - in twitter

Roubini : A Euro Breakup now would be very costly

Nouriel Roubini : ....Of course, a breakup now would be very costly, requiring an international debt conference to restructure the periphery’s debts and the core’s claims. But breaking up earlier could allow the survival of the single market and of the EU. A futile attempt to avoid a breakup for a year or two – after wasting trillions of euros in additional official financing by the core – would mean a disorderly end, including the destruction of the single market, owing to the introduction of protectionist policies on a massive scale. So, if a breakup is unavoidable, delaying it implies much higher costs.
But politics in the eurozone does not permit consideration of an early breakup. Germany and the ECB are relying on large-scale liquidity to buy time to allow the adjustments necessary to restore growth and debt sustainability. And, despite the huge risk implied if a breakup eventually occurs, this remains the strategy to which most of the players in the eurozone are committed. Only time will tell whether betting the house to save the garage was the right move. - in project syndicate

Roubini : Markets Should go Down after lousy Capex Report

Nouriel Roubini :" Dismal capex report: core capital goods orders are falling at a 9.3% 3months over 3months SAAR rate. Capex is contracting at very rapid pace "
"U.S. Capital Goods Orders Decline Most Since November http://bloom.bg/QyphZy . Given global/US uncertainties there is a major capex strike "
"EZ in deeper recession; China growth faltering; US slowing down. Market down yesterday;they should be lower today after lousy capex report " - in twitter

Roubini : The Gold Standard contributed to the 1st Depression

Nouriel Roubini :" "Republicans eye return to gold standard" & to another Great Depression as the gold standard contributed to the 1st one http://bit.ly/QwNDTs "

Roubini ‏: Growth hope is now dashed

Nouriel Roubini ‏:" Markets have rallied in hope that US/EZ/China growth will not falter &/or that CBs will open their QE fire hoses. Growth hope is now dashed " - in twitter

Greece Exiting the Eurozone near certain by 2013

Nouriel Roubini :" Indeed Grexit is near certain by 2013 w/o a transfer union @steve_hawkes: Citigroup says 90% chance of "Grexit" in September or October " - in twitter

Eurozone & UK Deeper in Recession

Nouriel Roubini ‏:" Eurozone & UK deeper in recession, China's & other EM growth stalling, US recovery faltering (regional ISM, Unemp benfts,capex,fisc cliff) " in twitter

One-third probability to get a Global Perfect Storm next year

Nouriel Roubini : Well, I think that the Goldilocks scenario in which everything becomes much better over the next, say, 18 months, between now and the end of next year, has a 10 percent probability. A world in which we continue to have a euro-zone recession but you don’t have a breakup, but things remain ugly; you have growth in the U.S. close to stall speed, but not a recession; slow growth in China and the emerging markets; and we avoid a war in the Middle East but we still have tension is maybe, you know, a 55 percent probability scenario. Then the rest of it is 35 percent. So, I would say there is a one-third probability to get a global perfect storm next year. - in Bloomberg Business Week