Stock Market Rally, Asset Bubbles & Crash

“For the next year or so, as long as the economy grows 1.5-2 percent, and you have easy money, this market can go higher. Growth is slow. Earnings growth is also slowing down. Top line and bottom line are not as good as they used to be, but margins are high. They could correct, somehow, over time. This might lead to a generalized credit and equity and asset bubble in the next year or two, followed by a crash.”

Nouriel Roubini - Dr, Doom Nouriel Roubini - Nouriel Roubini Financial Crisis - Next Market Crash

Nouriel Roubini also known as Dr. Doom Nouriel Roubini,decided to ask James Rickards, author of "Currency Wars," why he advocates for a return to the gold standard in his book "currency wars," when it was this return to gold that was a direct cause of the Great Depression. James Rickards responded by pointing out that it was not the return to gold, but rather the return to gold at the pre-WWI price that necessitated deflation, which exacerbated the depression. Nouriel then went to town on Rickards with, what became, full out, personal insults. He called James Rickards "arrogant" and said that the Wizard of OZ is a better read for those who want to understand the gold debate than Currency Wars.

'Grexit not disaster' - Nouriel Roubini in exclusive interview to RT

'Grexit not disaster' - Nouriel Roubini in exclusive interview to RT


If the eurozone is to survive, monetary union is not sufficient, insists American economist Nouriel Roubini, who anticipated the collapse of the US housing market and and the global recession in 2008.

Roubini ‏: Japan Growth Figures add noise not clarity to sales Tax Debate

Nouriel Roubini ‏: To raise or not to raise; Abe's Hamletic dilemma "Japan growth figures add noise not clarity to sales tax debate" http://on.ft.com/13eaCjC - in twitter

Nouriel Roubini keynote speech @ IntAPBSpeakers

One of the most renowned economists of his generation, Dr. Nouriel Roubini is widely recognized for predicting the collapse of the US housing market and the global recession of 2008. An ardent researcher and strategist, Dr. Roubini is an expert on when and why economic crises happen, and was named one of Fortune's "10 new gurus you should know." He has served in a number of important positions, from senior economist for international affairs on the White House Council of Economic Advisors to director of policy development at the US Treasury Department, where he worked on the resolution of the Asian financial crisis of the late '90s and the reform of international financial architecture. The International Monetary Fund, the World Bank, and numerous other prominent public and private institutions have also drawn upon his consulting expertise.

Dr. Roubini is the co-founder and chairman of Roubini Global Economics, an independent global macroeconomic and market strategy research firm. The firm's website, Roubini.com, has been named one of the best economics web resources by BusinessWeek, Forbes, The Wall Street Journal, and The Economist. He is also a professor of economics at New York University's Stern School of Business.

He has published numerous theoretical, empirical, and policy papers on international macroeconomic issues and co-authored the books Political Cycles: Theory and Evidence; Bailouts or Bail-ins? Responding to Financial Crises in Emerging Markets; and Crisis Economics: A Crash Course in the Future of Finance. He has been the subject of an extended profile in The New York Times Magazine and was featured in The Financial Times.

In engaging keynotes, Dr. Roubini helps audiences make sense of the present economic situation by analyzing past collapses and emerging economies. He also shares his ideas on preparing for the future.

Dr. Nouriel Roubini received his undergraduate degree at Bocconi University in Milan, Italy, and a doctorate in economics at Harvard University. Prior to joining Stern, he was on the faculty of Yale University's Department of Economics.

For information on booking for an event, please visit his speaking page at:
http://www.apbspeakersinternational.c...

Nouriel Roubini: Two Futures for Europe

Nouriel Roubini: Two Futures for Europe
Nouriel Roubini is an American professor of Economics at New York University`s Stern School of Business and chairman of Roubini Global Economics

The Benefits Of The U.S. Oil Production Boom

"The domestic benefits of the U.S. oil production boom are well documented — everything from the creation of high-paying jobs to sending less money to foreign oil producers. Less well appreciated are the geopolitical benefits. U.S. oil production has already paid foreign policy dividends in at least one vital area: It has paved the way for stronger sanctions on Iran by helping to keep the global oil market well-supplied and minimizing oil price volatility. This development is timely and instructive." - in Reuters Blog (an excerpt from The oil boom’s foreign policy dividend By John Hannah and Nouriel Roubini)

BRICS Emerging Economies May Hit A Thick Wall

"Of course, some of the better-managed emerging-market economies will continue to experience rapid growth and asset outperformance. But many of the Brics, along with some other emerging economies, may hit a thick wall, with growth and financial markets taking a serious beating." - in The Guardian

Low Growth: Brazil, Russia, China & South Africa

"Brazil's GDP grew by only 1% last year, and may not grow by more than 2% this year, with its potential growth barely above 3%. Russia's economy may grow by barely 2% this year, with potential growth also at around 3%, despite oil prices being around $100 a barrel. India had a couple of years of strong growth recently (11.2% in 2010 and 7.7% in 2011) but slowed to 4% in 2012. China's economy grew by 10% a year for the last three decades, but slowed to 7.8% last year and risks a hard landing. And South Africa grew by only 2.5% last year and may not grow faster than 2% this year." - an excerpt from the article Is the emerging market boom over?

Gold Is Solely A Play On Capital Appreciation

"Unlike other assets, gold does not provide any income. Whereas equities have dividends, bonds have coupons, and homes provide rents, gold is solely a play on capital appreciation. Now that the global economy is recovering, other assets – equities or even revived real estate – thus provide higher returns." - in A World Of Ideas

Stock Market Rally, Asset Bubbles & Crash

“For the next year or so, as long as the economy grows 1.5-2 percent, and you have easy money, this market can go higher. Growth is slow. Earnings growth is also slowing down. Top line and bottom line are not as good as they used to be, but margins are high. They could correct, somehow, over time. This might lead to a generalized credit and equity and asset bubble in the next year or two, followed by a crash.”

Nouriel Roubini Speech at NYFA 2013

Nouriel Roubini : “A potentially a toxic nexus between on one side global climate change effects on Africa, and unfair use of natural resources that is occurring in this part of the world; and the interaction between these two things leading to social and political instability.”

Roubini : The supply of Oil and Energy is going to rise & demand is slowing down because China’s growth is slowing down

It is pretty safe to say that the commodity supercycle is dead? From your perspective, what was the reason or reasons for its end?

Nouriel Roubini : Well, I don’t think there is one reason. I would at least separate between four categories of commodities; each one of them has a different dimension of demand and supply. One is oil and energy; the second would be precious metals. The third one will be industrial and base metals, and the fourth will be soft commodities and agriculture.
There are several factors that imply the corrections. One is that China now has had a very sharp slowdown. Even other, well-advanced economies are growing weakly now. There is also the weakening of growth in many other emerging markets that is going to bear down on global growth and on various commodity prices.
Secondly, in the oil and energy sector, the shale gas and oil revolution implies a significant increase in supply. There’s lots of shale gas and oil, but of course also discoveries offshore and in oil fields from Brazil to Colombia to the oil that’s been discovered in Sub-Saharan Africa, from Sudan all the way down to Mozambique. The supply of oil and energy is going to rise. And demand is slowing down because China’s growth is slowing down, and you also have a variety of measures taken by many countries to save on energy and become more energy efficient.
The other thing is that when commodity prices were high, investments were made to increase supply, whether it was in energy or base metals or agriculture or you name it. All the new supply is coming to the market. So now the supply curve has become more elastic, and therefore the increase in supply for any given demand curve is pushing prices down lower. This is a bit of a delayed cycle, and it’s a combination of many different stories—the China story, the energy-saving story, the shale gas and oil revolution, the delayed increase in supply coming from previous high prices and so on. It’s not just one story. - in indexuniverse

Credit Crunch is still severe in Spain as policy cycle is procyclical

Nouriel Roubini ‏: Yesterday policy meetings in Madrid. Today policy meeting in Berlin. Credit crunch is still severe in Spain as policy cycle is procyclical - in twitter

GOLD is going down toward $1,000 an ounce by 2015

Another one of your firm’s accurate forecasts was gold’s slide that we certainly have been seeing over the last few months. Will gold fall more? Have we seen a little bit of a rebound over the last week or so?

Nouriel Roubini : There is a temporary rebound, but in spite of that, gold is still below $1,500, and it peaked at $1,900 in September 2011. Our forecast, medium term—meaning by 2015—is that gold is going down toward $1,000 an ounce, so from current levels, another 25-30 percent correction could occur. We have written extensively on the reasons for this:

1. Tail risks in the global economy are lower than they used to be. The world is not going to end.
2. In spite of the QEs, inflation is going to remain low because growth is weak, and therefore all this extra money is going into the reserves of the banks, as velocity is collapsing. If anything, inflation is now falling both in emerging and advanced economies. So buying gold as a hedge against inflation, in spite of all these QEs, is not a good investment.
3. There is a global economic recovery. There are now other assets that provide both an income and a capital gain—from equities to even real estate—while gold has always been a play on capital appreciation.
4. Real interest rates became very negative in the U.S. and globally. So at current levels, they can only go higher rather than lower because there is a strong relation in gold prices and real interest rates. However, slow as the normalization by the Fed is going to be, eventually there will be one, and the real rates are going to hurt things like gold.
5. In a world where other advanced economies are weak and emerging markets are soft, the dollar may tend to appreciate, affecting the dollar prices of commodities, including gold.

Those are some of the factors. There are a couple of other factors as well. The main ones suggest that gold prices may be trending lower rather than higher. It may rise for one week or a month, but it is not going to be a trend. The question is, What is a trend as opposed to short-term volatility? - in IndexUniverse

Nouriel Roubini : in the short run, Good News is good for the Equity Markets. And bad news is also good, because it leads to more and longer QE

Were you surprised at the GDP number that came out in late June? I saw you tweet previously that you thought it was actually under 1 percent. 

Nouriel Roubini : At Roubini Global Economics, we have been much more cautious than consensus and policymakers about the U.S. and global recovery. We’re saying year-to-year growth is going to be barely 1.7, 1.8 percent. And next year, where people expect 3 percent growth, we said 2.4 percent. Guess what: Consensus at the beginning of this year was 2.3 percent, 2.4 percent. Now it’s 1.8 percent. So regarding next year—where three months ago consensus was at 3 percent, and we were at 2.4 percent —now consensus is down to 2.7 percent, and I think it’s going to be revised further downwards.
We have been, for many reasons, of the view that while the U.S. is recovering, there will be lots of head winds, starting with the fiscal drag and gridlock in Congress and the variety of weaknesses, particularly the household sector. We have been proven right. But in the short run, good news is good for the equity markets. And bad news is also good, because it leads to more and longer QE. - in indexuniverse

Nouriel Roubini - The Coming China Crash?

Nouriel Roubini is back with the Doom and Gloom statements. His next prediction is a crash in China. I discuss whether Dr. Doom's assessment is correct.

Roubini : The issue with GOLD is always, Do you want to be market weight, overweight or underweight?

Do you see any diversification benefits of gold in a portfolio?

Nouriel Roubini : The question always with gold has never been black and white on whether you want to have gold in your portfolio. The issue with gold is always, Do you want to be market weight, overweight or underweight? In our view, in the past, there were reasons you wanted to be overweight. But now there are these five reasons to be underweight. It is because the gold prices are more likely to fall rather than rise.

OIL : we think the market can go slightly lower, say, toward $90 a barrel

What are your thoughts on other commodities?

Nouriel Roubini : We are concerned about base metals, because the slowdown of China may end up a hard landing, which implies that demand for things like copper and others could really sink. In the case of oil, we think the market can go slightly lower, say, toward $90 a barrel, but it’s probably not going much lower than $90, and $100 to $110 maximum; that’s the range for oil. Because demand is growing less and supply is increasing, you might have some softness in oil prices. But then there also is geopolitical risk. If there is a war between Israel and Iran, that could lead to an increase in the sale premium.
Soft commodities, especially agriculture and food, are slightly better supported and less cyclical. Emerging markets are still urbanizing and naturalizing, having high per capital income growth and having population growth with a few exceptions. Demand for food is going to rise over time.
Natural gas prices are going to go higher, as the U.S. starts exporting more. Prices are low in the U.S. and very high in the rest of the world. There’s a gap between very low U.S. prices and high global prices. That is going to be arbitraged. - in indexuniverse

Growth is going to accelerate in the second half and be very strong next year

What’s your forecast for growth going forward?

Nouriel Roubini : Growth is going to accelerate in the second half and be very strong next year. We believe that growth is going to be slightly better in Q2 [2013], and start to grow more in the second half. We expect tapering to start in December, with maybe the earliest start in September, and not being done next or late in the summer. Tapering could even start later than that if the economy in the second half of the year disappoints more than we expect. So it all stays contingent. - in indexuniverse

Roubini : We are concerned about Base Metals, because the slowdown of China

What are your thoughts on other commodities?

Nouriel Roubini : We are concerned about base metals, because the slowdown of China may end up a hard landing, which implies that demand for things like copper and others could really sink. In the case of oil, we think the market can go slightly lower, say, toward $90 a barrel, but it’s probably not going much lower than $90, and $100 to $110 maximum; that’s the range for oil. Because demand is growing less and supply is increasing, you might have some softness in oil prices. But then there also is geopolitical risk. If there is a war between Israel and Iran, that could lead to an increase in the sale premium.
Soft commodities, especially agriculture and food, are slightly better supported and less cyclical. Emerging markets are still urbanizing and naturalizing, having high per capital income growth and having population growth with a few exceptions. Demand for food is going to rise over time.
Natural gas prices are going to go higher, as the U.S. starts exporting more. Prices are low in the U.S. and very high in the rest of the world. There’s a gap between very low U.S. prices and high global prices. That is going to be arbitraged. - in indexuniverse

Roubini : Natural Gas prices are going to go higher, as the U.S. starts exporting more

What are your thoughts on other commodities?

Nouriel Roubini : We are concerned about base metals, because the slowdown of China may end up a hard landing, which implies that demand for things like copper and others could really sink. In the case of oil, we think the market can go slightly lower, say, toward $90 a barrel, but it’s probably not going much lower than $90, and $100 to $110 maximum; that’s the range for oil. Because demand is growing less and supply is increasing, you might have some softness in oil prices. But then there also is geopolitical risk. If there is a war between Israel and Iran, that could lead to an increase in the sale premium.
Soft commodities, especially agriculture and food, are slightly better supported and less cyclical. Emerging markets are still urbanizing and naturalizing, having high per capital income growth and having population growth with a few exceptions. Demand for food is going to rise over time.
Natural gas prices are going to go higher, as the U.S. starts exporting more. Prices are low in the U.S. and very high in the rest of the world. There’s a gap between very low U.S. prices and high global prices. That is going to be arbitraged. - in indexuniverse

Roubini : The issue with GOLD is always, Do you want to be market weight, overweight or underweight?

Do you see any diversification benefits of gold in a portfolio?

Nouriel Roubini : The question always with gold has never been black and white on whether you want to have gold in your portfolio. The issue with gold is always, Do you want to be market weight, overweight or underweight? In our view, in the past, there were reasons you wanted to be overweight. But now there are these five reasons to be underweight. It is because the gold prices are more likely to fall rather than rise. - in indexuniverse

Underdog in the Race for Fed Chair May Now Be the Frontrunner

Nouriel Roubini : "My new paper Larry Summers: Underdog in the Race for Fed Chair May Now Be the Frontrunner" - in Twitter

The Benefits Of The U.S. Oil Production Boom

"The domestic benefits of the U.S. oil production boom are well documented — everything from the creation of high-paying jobs to sending less money to foreign oil producers. Less well appreciated are the geopolitical benefits. U.S. oil production has already paid foreign policy dividends in at least one vital area: It has paved the way for stronger sanctions on Iran by helping to keep the global oil market well-supplied and minimizing oil price volatility. This development is timely and instructive." - in Reuters Blog (an excerpt from The oil boom’s foreign policy dividend By John Hannah and Nouriel Roubini)

Why Gold Will Crash To $1,000 Nouriel Roubini Price Prediction

Reason No. 1: Gold prices tend to spike when there are serious economic, financial, and geopolitical risks in the global economy. But, even though this may be the case in a real and continuing financial meltdown he feels that gold would still be a poor investment with margin calls forcing sales with the result that the gold price can be extremely volatile, up and down, even at the peak of such a crisis.

Reason No. 2: Roubini notes that gold performs best when there is a risk of high inflation, as its popularity as a store of value increases, but points out that despite the huge amount of monetary easing, inflation has remained low, and may actually be falling due to the velocity of money collapsing. Commercial banks are seen as hoarding the liquidity provided by the Central banks, while reduced purchasing power and low wage demands because of high unemployment are keeping inflationary pressures down.

Reason No. 3: The lack of earnings from gold argument -- While other forms of investment generate income, gold does not. So Roubini sees gold solely as a play on capital appreciation and that with the global economy, arguably, recovering, other assets are seen as generating higher returns. Indeed, QE-boosted US and global equities have vastly outperformed gold since the sharp rise in gold prices in early 2009.

Reason No. 4: The arguably more positive outlook about the US and the global economy implies that over time the Federal Reserve and other central banks will exit from quantitative easing and zero interest policy rates, which means that real rates will rise, rather than fall. With gold performing better in a zero or negative interest rate environment Roubini thus sees its attraction waning as interest rates start to rise.

Reason No. 5: Roubini argues that some of the Central banks of the more indebted nations may be tempted to liquidate part of their gold holdings and thus further depress the gold market. He points specifically to Cyprus where a report that it might sell a small fraction -- some €400 million ($520 million) -- of its gold reserves may have contributed to triggering a 13% fall in gold prices in April. Countries like Italy, which has massive gold reserves (above $130 billion), he says, could be similarly tempted, driving down prices further Roubini comments..

Reason No. 6: Here he blames some extreme political conservatives, particularly in the U.S. for overhyping gold in ways he considers to have been counterproductive. These 'fanatics', as he calls them, have suggested a return to some form of gold standard as being inevitable as they predict hyperinflation may ensue from the Central bank debasement of currency through Quantitative Easing. He goes on to say that given the absence of any conspiracy to expropriate citizens wealth, falling inflation, and what he sees as the inability to use gold as a currency, such arguments cannot be sustained. www.mineweb.com/mineweb/content/en/minew

­eb-gold-news?oid=192868&sn=Detail

Gold Is Solely A Play On Capital Appreciation

Nouriel Roubini : "Unlike other assets, gold does not provide any income. Whereas equities have dividends, bonds have coupons, and homes provide rents, gold is solely a play on capital appreciation. Now that the global economy is recovering, other assets – equities or even revived real estate – thus provide higher returns." - in A World Of Ideas

The Ongoing Weakness of America’s Economy

The ongoing weakness of America’s economy—where deleveraging in the private and public sectors continues apace—has led to stubbornly high unemployment and sub-par growth. The effects of fiscal austerity—a sharp rise in taxes and a sharp fall in government spending since the beginning of the year—are undermining economic performance even more.

France Is Slipping Into A Recession

"France is slipping into a recession that complicates the austerity & reform agenda." - in Roubini`s Official Twitter

Fed's Liquidity Injections Are Not Creating Credit For The Real Economy

The problem is that the Fed's liquidity injections are not creating credit for the real economy, but rather boosting leverage and risk-taking in financial markets. The issuance of risky junk bonds under loose covenants and with excessively low interest rates is increasing; the stock market is reaching new highs, despite the growth slowdown; and money is flowing to high-yielding emerging markets.

Be Sure Your Seat Belt Is Securely Fastened

“Be sure your seat belt is securely fastened, because nothing has really come to rest. We have entered the ‘New Abnormal’, a period in which...the wise investor is prepared to be surprised.”

Huge Gap Between Sentiment On Wall Street And The Main Street

"There is a huge gap between sentiment on Wall Street and the main street."

Market Outlook: Gravitational Forces & Levitational Forces

"It could go on for another year or two. Of course, there are two forces. Growth is slow. Earnings growth is also slowing down. Top line and bottom line are not as good as they used to be, but margins are high. They could correct, somehow, over time.
But you have the gravitational forces of slow economy leading eventually to correction, but then the levitational forces of QEs, zero policy rates, more money coming in the market – not just from the U.S., but from other economies – it's going to levitate asset prices.

So, as I pointed out, this might lead to a generalized credit and equity and asset bubble in the next year or two, followed by a crash. But for the next year or so, as long as the economy grows 1.5-2 percent, and you have easy money, this market can go higher. "- in Business Insider

Roubini : The Commodity super-cycle may be over

....., The commodity super-cycle that helped Brazil, Russia, South Africa, and many other commodity-exporting emerging markets may be over. Indeed, a boom would be difficult to sustain, given China's slowdown, higher investment in energy-saving technologies, less emphasis on capital- and resource-oriented growth models around the world, and the delayed increase in supply that high prices induced. - excerpt from a Nouriel Roubini article in the Guardian

Nouriel Roubini vs. James Rickards

Nouriel Roubini also known as Dr. Doom Nouriel Roubini,decided to ask James Rickards, author of "Currency Wars," why he advocates for a return to the gold standard in his book "currency wars," when it was this return to gold that was a direct cause of the Great Depression. James Rickards responded by pointing out that it was not the return to gold, but rather the return to gold at the pre-WWI price that necessitated deflation, which exacerbated the depression. Nouriel then went to town on Rickards with, what became, full out, personal insults. He called James Rickards "arrogant" and said that the Wizard of OZ is a better read for those who want to understand the gold debate than Currency Wars