Bad Luck & Debt Burden

Individuals, firms, or governments may end up with too much debt because of bad luck, bad decisions, or a combination of the two. If you get a mortgage but then lose your job, you have bad luck. If your debt becomes unsustainable because you borrowed too much to take long vacations or buy expensive appliances, your bad behavior is to blame. The same applies to corporate firms: some have bad luck and their business plans fail, while others borrow too much to pay their mediocre managers excessively.
Bad luck and bad behavior (policies) can also lead to unsustainable debt burdens for governments. If a country’s terms of trade (the price of its exports) deteriorate and a large recession persists for a long time, its government’s revenue base may shrink and its debt burden may become excessive. But an unsustainable debt burden may also result from borrowing to spend too much, failure to collect sufficient taxes, and other policies that undermine the economy’s growth potential. 

Read more at http://www.project-syndicate.org/commentary/nouriel-roubini-criticizes-recent-us-court-rulings-that-impede-orderly-restructuring-of-sovereign-debt#o8lHXZSeTqWUo9KE.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

Debt vultures endanger the world

by Nouriel Roubini, July 04 2014,

LIKE individuals, corporations and other private firms that rely on bankruptcy procedures to reduce an excessive debt burden, countries sometimes need orderly debt restructuring or reduction.
But the continuing legal saga of Argentina’s fight with holdout creditors shows that the international system for orderly sovereign-debt restructuring may be broken.
Individuals, firms, or governments may end up with too much debt because of bad luck, bad decisions, or a combination.
If you get a mortgage but then lose your job, you have bad luck.
If your debt becomes unsustainable because you borrowed too much to take long vacations or buy expensive appliances, your bad behaviour is to blame.
The same applies to corporate firms: some have bad luck and their business plans fail, while others borrow too much to pay their mediocre managers excessively.
Bad luck and bad behaviour (policies) can also lead to unsustainable debt burdens for governments. If a country’s terms of trade (the prices of its exports) deteriorate and a recession persists for a long time, the government’s revenue base may shrink and its debt burden may become excessive.
But an unsustainable debt burden may also result from borrowing to spend too much, failure to collect sufficient taxes, and other policies that undermine the economy’s growth potential.

Read More @ http://www.bdlive.co.za/opinion/2014/07/04/debt-vultures-endanger-the-world






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

Gouging the Gauchos

NEW YORK – Like individuals, corporations, and other private firms that rely on bankruptcy procedures to reduce an excessive debt burden, countries sometimes need orderly debt restructuring or reduction. But the ongoing legal saga of Argentina’s fight with holdout creditors shows that the international system for orderly sovereign-debt restructuring may be broken.

Individuals, firms, or governments may end up with too much debt because of bad luck, bad decisions, or a combination of the two. If you get a mortgage but then lose your job, you have bad luck. If your debt becomes unsustainable because you borrowed too much to take long vacations or buy expensive appliances, your bad behavior is to blame. The same applies to corporate firms: some have bad luck and their business plans fail, while others borrow too much to pay their mediocre managers excessively.

Bad luck and bad behavior (policies) can also lead to unsustainable debt burdens for governments. If a country’s terms of trade (the price of its exports) deteriorate and a large recession persists for a long time, its government’s revenue base may shrink and its debt burden may become excessive. But an unsustainable debt burden may also result from borrowing to spend too much, failure to collect sufficient taxes, and other policies that undermine the economy’s growth potential.

When the debt burden of an individual, firm, or government is too high, legal systems need to provide orderly ways to reduce it to a more sustainable level (closer to the debtor’s potential income). If it is too easy to default and reduce one’s debt burden, the result is moral hazard, because debtors gain an incentive to indulge in bad behavior. But if it is too difficult to restructure and reduce debts when bad luck leads to unsustainable debts, the result is bad for both the debtor and its creditors, who are better off when a reduced debt ratio is serviced than when a debtor defaults.
Read more at http://www.project-syndicate.org/commentary/nouriel-roubini-criticizes-recent-us-court-rulings-that-impede-orderly-restructuring-of-sovereign-debt#le0wPjYzJsVPMx2B.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

Roubini : I'm addicted to Twitter

Among the social media - I've tried them all - Facebook is a bit of a game, but Twitter is a productivity tool. I use it regularly and I'm addicted to it.


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

Boom Bubbles & Busts can lead to Crashes, Busts, & Panics

What we need to understand is, one, that there are market failures; and two, that there are things like asset bubbles and irrational exuberance. There are periods of booms, bubbles, and manias. These things, if left to themselves, can lead to crashes, to busts, to panics.



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

Nouriel Roubini on the Economic Crisis

 NOURIEL ROUBINI: Popularly known as Dr. Doom, which was the title of a profile in The New York Times Magazine in August of 2008, Dr. Nouriel Roubini is known for his now-vindicated predictions of the current financial crisis. He speaks on the global economic outlook and its implications for financial markets and was named to Fortune Magazine's list of "10 new gurus you should know". Nouriel Roubini is a Professor of Economics and International Business at New York University Stern School of Business. He was also the Senior Economist for International Affairs at the White House Council of Economic Advisers from 1998-1999; then, the Senior Advisor to the Under Secretary for International Affairs and the Director of the Office of Policy Development and Review at the U.S. Treasury Department from 1999- 2000. He is the cofounder and Chairman of RGE Monitor, an innovative economic and geo-strategic information service with 30 economists on staff. With Robert J. Shiller, he contributes to a series for Project Syndicate called Finance in the 21st Century. He also maintains a blog at RGE Monitor. He is the co-author of the book, "Political Cycles: Theory and Evidence." In his latest book Crisis Economics: A Crash Course In The Future of Finance, Roubini argues that the United States must use the recent crisis as an opportunity to make deep and meaningful reforms to its financial system. His book, Bailouts or Bail-ins? Responding to Financial Crises in Emerging Economies, (with Brad Setser), was published by the Institute for International Economics in 2004.


 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: How I'd Invest $1 Million Right Now

(Bloomberg) -- The New York University economist Nouriel Roubini insists he's not 'Dr. Doom,' he's 'Dr. Realist' in his global macro investment outlook. Regardless of his nickname, here's how he would invest $1 million.




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 Global Economics Launches iPad App

NEW YORK, June 25, 2014 /PRNewswire/

-- Roubini Global Economics today announced the release of an iPad app that allows clients to read and save the firm's latest macroeconomic research on the go. Free to download, the app provides clients and trial subscribers with access to current and past content available on Roubini.com, including Research, Thoughts, Key Views and Global Outlooks.

"Markets don't wait, so we developed an app to put our research right at clients' fingertips, enabling them to react as soon as opportunities arise," said Scott Hall, Managing Director of Sales & Marketing. "We're constantly focused on developing new ways to engage, interact and collaborate with our clients, and we can't wait for them to start using our app."

The app lets users select their favorite research pieces, saving them to their devices for future reference—even when offline. When connected to the internet, the app automatically scans for new content and allows users to search through Roubini's entire collection of research for the insight they need.

http://www.marketwatch.com/story/roubini-global-economics-launches-ipad-app-2014-06-25



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

China headed for a Bumpy Landing

China headed for a bumpy landing. While he doesn't believe China is at risk of a crash, Roubini says growth in the world's second largest economy will probably "surprise to the downside."



He expects Chinese GDP to grow 7% this year then fall to 6.5% next year. It could slow further if policy makers fail to implement structural reforms aimed at making China's economic model sustainable, he added.  in CNN Money read more : http://money.cnn.com/2014/06/11/investing/economy-roubini-risks/



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 in Turkey Special Interview

SPECIAL INTERVIEW WITH Nouriel Roubini



Economist Nouriel Roubini Turkey are very optimistic for the economy. Bloomberg HT research, answering questions from the desk of Bu İyigündoğdu Roubini, including Turkey, where 6 with the economic performance of developing countries argued that the BRICS Ulek leave behind. 01.04.2013

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

Nouriel Roubini | The Great Global Backlash

Anaemic economic recovery has given populist parties an opening to blame foreign trade and foreign workers
by Nouriel Roubini

In the immediate aftermath of the 2008 global financial crisis, policymakers’ success in preventing the Great Recession from turning into Great Depression II held in check demands for protectionist and inward-looking measures. But now the backlash against globalization—and the freer movement of goods, services, capital, labour, and technology that came with it—has arrived. This new nationalism takes different economic forms: trade barriers, asset protection, reaction against foreign direct investment, policies favouring domestic workers and firms, anti-immigration measures, state capitalism, and resource nationalism. In the political realm, populist, anti-globalization, anti-immigration, and in some cases outright racist and anti-Semitic parties are on the rise. These forces loath the alphabet soup of supra-national governance institutions—EU (European Union), UN (United Nations), WTO (World Trade Organization), and IMF (International Monetary Fund), among others—that globalization requires. Even the Internet, the epitome of globalization for the past two decades, is at risk of being balkanized as more authoritarian countries—including China, Iran, Turkey, and Russia—seek to restrict access to social media and crack down on free expression.

Read more at: http://www.livemint.com/Opinion/ro89h9RPtLE7b4Xh72THCM/The-great-global-backlash.html?utm_source=copy



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

Nouriel Roubini on The Charlie Rose

Nouriel Roubini and Ian Bremmer; Colum McCann
Nouriel Roubini, Chairman of Roubini Global Economics and Ian Bremmer, president of the Eurasia Group on the world's economy. Irish author Colum McCann on his new book “Transatlantic.”




 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 sides with the Bond Market

At an investment conference this week, Roubini said he sides with the bond market "I am still of the view that most economic growth might surprise to the downside," he said, MarketWatch reported.



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

The Rise of China is the biggest geopolitical challenge of our time , Not Iran or Ukraine

“Of course people worry about the Middle East, people worry about Iran, North Korea or they worry about what’s going on in Ukraine and Russia – but if you’re thinking about what is the biggest geopolitical challenge of our time, there is one that is bigger than all of them: it’s the rise of China and how to manage that peacefully,”

 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 ‏: In Bahrain Water more costly than Gasoline

Nouriel Roubini : In Bahrain water more costly than gasoline. Gasoline subsidized. Water costly as imported or produced with energy intensive desalinization - via twitter


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 Fed Will Have A Tricky Time Delivering A Clear Message As It Plays Musical Chairs

“You can’t tell the players without a program. Get your program here!” yelled the stadium vendors of my youth. In today’s Outside the Box I bring you an excellent piece of Fed watching by Nouriel Roubini and colleagues, a “program” of the new Fed members and where they rank on the hawk-dove scale. They point out that, with a new chairperson (Janet Yellen) and vice-chair (Stanley Fischer), and with higher than normal turnover on the Federal Open Market Committee (FOMC) – over the past year, 75% of the FOMC’s membership has changed – the Fed’s need for clear communications with regard to monetary policy and forward guidance is greater than ever.

Read more: http://www.businessinsider.com/roubini-fomc-musical-chairs-2014-6#ixzz35BdcXBZf

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

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

France Is Slipping Into A Recession

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

Related ETFs: iShares MSCI France Index ETF (EWQ)






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

Brazil Was Too Hyped

Two years ago at the Milken Conference, Eike Batista criticized me in our panel for saying that Brazil was too hyped. Today he is nearly bankrupt. - Via tweet



Related trading instruments: iShares MSCI Emerging Markets (ETF) (EEM), iShares MSCI Brazil Index (ETF) (NYSE:EWZ), SPDR Gold Trust (ETF) (GLD)



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

Money could flow from Canada to US

If the Fed starts to raise rates some time next year, and the Bank of Canada waits for a few months, if not quarters, then money is going to flow out of Canada into the U.S. and that is going to weaken the currency.


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

6 things that worry Dr. Doom

The economist known as Dr. Doom sounds relatively optimistic these days.

Nouriel Roubini says many of the risks to the global economy have abated and things are looking up.

Thanks to bold moves by the world's central banks, global economic growth this year should be closer to 2% rather than the "anemic" 1% of the past few years, Roubini said at an event hosted by Aberdeen Asset Management in New York.

But -- and there's always a but -- Roubini has a list of six things he believes could derail the economic recovery. It's worth remembering that Roubini correctly predicted the housing crisis and ensuing financial crash in 2008.
read more @ http://money.cnn.com/2014/06/11/investing/economy-roubini-risks/index.html





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

Economic Growth Might Surprise to the Downside

“I am still of the view that most economic growth might surprise to the downside,” Nouriel Roubini said. The economist added that if equities rise another 30% this year, as the S&P 500 index SPX did last year, we’d likely be in “frothy” territory. - in Marketwatch




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: There’s ‘schizophrenia’ between what stock and bond markets tell you

U.S. stocks and bonds have been giving different signals about the economy in what’s turning out to be a bit of “schizophrenia” for weary investors, according to renowned economist Nouriel Roubini. Stocks have been plodding higher in 2014, even after a momentous rally last year, suggesting a positive outlook on economy and corporate health. The Dow Jones Industrial Average DJIA -0.50% is poised to cross 17,000 if stocks continue their run. Meanwhile, bond yields have fallen sharply for much of the year, defying the expectations of most investors, who expected interest rates to rise as the economy improved. So which market is right? If ... (full story)

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

Managing a rising China wont be Easy

Of course people worry about the Middle East, people worry about Iran, North Korea or they worry about what’s going on in Ukraine and Russia – but if you’re thinking about what is the biggest geopolitical challenge of our time, there is one that is bigger than all of them: it’s the rise of China and how to manage that peacefully.





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

Nouriel Roubini: There’s ‘schizophrenia’ between what stock and bond markets tell you

U.S. stocks and bonds have been giving different signals about the economy in what’s turning out to be a bit of “schizophrenia” for weary investors, according to renowned economist Nouriel Roubini.
Stocks have been plodding higher in 2014, even after a momentous rally last year, suggesting a positive outlook on economy and corporate health. The Dow Jones Industrial Average DJIA +0.02% is poised to cross 17,000 if stocks continue their run. Meanwhile, bond yields have fallen sharply for much of the year, defying the expectations of most investors, who expected interest rates to rise as the economy improved.
read more @ http://blogs.marketwatch.com/thetell/2014/06/10/nouriel-roubini-says-theres-schizophrenia-between-what-the-stock-and-bond-market-tell-you/





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

Economic Failure could fuel further nationalist, xenophobic tendencies – and even trigger military conflict

Even in the US, the economic insecurity of a vast white underclass that feels threatened by immigration and global trade can be seen in the rising influence of the extreme right and Tea Party factions of the Republican Party. These groups are characterized by economic nativism, anti-immigration and protectionist leanings, religious fanaticism, and geopolitical isolationism.

A variant of this dynamic can be seen in Russia and many parts of Eastern Europe and Central Asia, where the fall of the Berlin Wall did not usher in democracy, economic liberalization, and rapid output growth. Instead, nationalist and authoritarian regimes have been in power for most of the past quarter-century, pursuing state-capitalist growth models that ensure only mediocre economic performance. In this context, Russian President Vladimir Putin’s destabilization of Ukraine cannot be separated from his dream of leading a “Eurasian Union” – a thinly disguised effort to recreate the former Soviet Union.

In Asia, too, nationalism is resurgent. New leaders in China, Japan, South Korea, and now India are political nationalists in regions where territorial disputes remain serious and long-held historical grievances fester. These leaders – as well as those in Thailand, Malaysia, and Indonesia, who are moving in a similar nationalist direction – must address major structural-reform challenges if they are to revive falling economic growth and, in the case of emerging markets, avoid a middle-income trap. Economic failure could fuel further nationalist, xenophobic tendencies – and even trigger military conflict. - in project-syndicate.org


 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 : 10 questions the Senators failed to ask Janet Yellen at her confirmation hearing

 10 basic and key questions Senators were too naive to ask Yellen:

1. You wrote about optimal control (OC) ie allow inflation above target. Do you support OC?
2. You wrote a few times that inflation may have to go above target for a while to reduce labor slack. Do you support this optimal control?
3. Do you agree with Governor Stein that macro-pru will not be sufficient to control bubbles? Would you raise rates sooner to prick bubbles?
 4. While you say no bubble today what is the risk that slow QE exit & policy rate normalization (4 yrs) will cause bubbles down the line?
5 . If the current approach to too-big-to-fail will not work would you down the line support breaking up big banks to deal with TBTF?
6. What will be Fed losses of paying interest on excess reserves of $3 trillion+ when you will normalize policy rates to 4%? 120bn a year?
7. Fed criteria for taper is a cumulative improvement in labor mkt outlook. Aren't we there now given fall in Un Rate & 180K jobs per month?
8. After ZIRP, QE, CE, FG growth is still weak & mon pol ineffective? Wouldn't a better policy mix be more fiscal stimulus & less monetary?
9. What is risk of fiscal dominance as Fed is effectively monetizing public debt? Should mon pol be used to nudge congress to cut deficit?
 10. What is risk of debt dominance, ie Fed unable to raise rates fast enough as high public/household debt requires low debt service ratio?  - via twitter




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

U.S. Stock Market not in a Bubble Yet

In a Bloomberg interview, Roubini said central bank liquidity is not going to the economic recovery but into financial transactions “We are maybe not in bubble territory for the U.S. stock market, but if you look at housing around the world — Switzerland, Sweden, Norway, France, Germany, Israel, Brazil, Hong Kong, Singapore, China — we have frothiness if not outright bubbles in housing markets in many parts of the world,” he said. Also, the tech sector appears vulnerable with start-ups being overvalued based on forward revenue they haven’t even taken in yet. In addition, central bankers face a tough choice between killing off the recovery, or fueling growth at the risk of inflating the next financial crisis.



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

Economic Insecurity and the Rise of Nationalism by NOURIEL ROUBINI

Weak recovery has provided an opening for populist and protectionist parties to blame foreign trade and foreign workers for the prolonged malaise

In the immediate aftermath of the 2008 global financial crisis, policymakers' success in preventing the Great Recession from turning into Great Depression II held in check demands for protectionist and inward-looking measures. But now the backlash against globalisation – and the freer movement of goods, services, capital, labour, and technology that came with it – has arrived.
This new nationalism takes different economic forms: trade barriers, asset protection, reaction against foreign direct investment, policies favouring domestic workers and firms, anti-immigration measures, state capitalism, and resource nationalism. In the political realm, populist, anti-globalisation, anti-immigration, and in some cases outright racist and antisemitic parties are on the rise.
These forces loath the alphabet soup of supranational governance institutions – the EU, the UN, the WTO, and the IMF, among others – that globalisation requires. Even the internet, the epitome of globalisation for the past two decades, is at risk of being balkanised as more authoritarian countries – including China, Iran, Turkey, and Russia – seek to restrict access to social media and crack down on free expression.

read more @ http://www.theguardian.com/business/economics-blog/2014/jun/02/economic-insecurity-nationalism-on-the-rise-globalisation-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

Africa : The surprises have been on the upside rather than on the downside

This was your first trip to Nigeria. What were your impressions?

I had low expectations because usually what you read in the US press about Nigeria is only bad news, violence, terrorism, lots of other bad stuff. I was actually positively surprised. You have a country that has one tenth of the power capacity of South Africa, one quarter or one fifth of the infrastructure of South Africa, and while South Africa is growing barely at 2%-2.5%, Nigeria is growing at around 7% or so.

Of course it’s an unfair comparison because South Africa is a middle-income country while Nigeria has a low per capita income, so usually low per capita income countries grow faster because there is a catch-up of growth. Nigeria has oil and gas and a lot of energy that helps its growth. Since they are doing so well with such little power and infrastructure, some people say that Nigeria could grow by 10% by making the right investment in infrastructure.

What was the highlight of your trip so far, other than the nightlife?

These are societies which are becoming urbanised. These are thriving urban environments where you have good restaurants, good clubs, music venues. You go to a club and hear the same kind of electronic dance music, top 40, that you hear in Ibiza.

And any surprises?

The surprises have been on the upside rather than on the downside. Of course there are tons of challenges in each of these countries but there’s an element of vibrancy that you see both in economies that are wealthier like South Africa or Nigeria but even in a place like Congo.

There is a long list of things that have to be improved in each one of these economies and you cannot take economic success in the future for granted.

I think sometimes there is a little bit of an excess of saying Africa is rising, everything is going well, but that depends on having good sound institutions, good policies, good leaders in the private and public sectors to make them work.

There’s always a risk of slippages and things turning wrong, so I would say one should not take the current success for granted, but overall the surprises have been on the positive. - via africanbusibnessmagazine





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

Hungary Showing Signs of Economic Growth

The Hungarian government’s policies show signs of state capitalism in certain areas, renowned economist Nouriel Roubini told a conference in Budapest on Tuesday.
Roubini mentioned Hungary as an example of state capitalist tendencies in Central and Eastern Europe, where the role of the state increases to the detriment of market-oriented reforms.
On the sidelines of the conference, organised by the Hungarian Venture Capital Association, Roubini told reporters that Hungary had been able to reduce the vulnerability of its economy in a number of areas and that also showed signs of economic growth, but added that the government had a “mixed” approach to foreign owners and suggested that its commitment to foreign investment was questionable.
read more @ http://www.politics.hu/20140604/renowned-economist-sees-signs-of-state-capitalism-in-hungary




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 on Nigeria vs. South Africa

This was your first trip to Nigeria. What were your impressions?

Nouriel Roubini : I had low expectations because usually what you read in the US press about Nigeria is only bad news, violence, terrorism, lots of other bad stuff. I was actually positively surprised. You have a country that has one tenth of the power capacity of South Africa, one quarter or one fifth of the infrastructure of South Africa, and while South Africa is growing barely at 2%-2.5%, Nigeria is growing at around 7% or so.

Of course it’s an unfair comparison because South Africa is a middle-income country while Nigeria has a low per capita income, so usually low per capita income countries grow faster because there is a catch-up of growth. Nigeria has oil and gas and a lot of energy that helps its growth. Since they are doing so well with such little power and infrastructure, some people say that Nigeria could grow by 10% by making the right investment in infrastructure. - in africanbusinessmagazine



 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 : Africa a Frontier Market has come as a positive suprise

African Business : Is Africa an emerging or a frontier market, and is this distinction important?

Roubini : Africa is frontier rather than emerging. I would make a difference between those economies that are emerging markets and those that are frontier and I would say in sub-Saharan Africa, other than maybe Nigeria and South Africa, which I would consider as being emerging, the others are more frontier economies by the standard of how people define different types of economies.

Does that mean they’re decoupled from the rest of the world?
There is partial decoupling – I would say it’s not full. The kind of pressure that you saw last year, and even recently in emerging markets, has affected to a smaller measure emerging markets or frontier economies in the region because they have less capital mobility, there is less portfolio investment – either in equity markets or bond markets by foreign investors – so there have been pressures but they’ve been modest.

The currency has fallen slightly in places like Nigeria but we didn’t see the kind of massive outflows that you see in some of the bigger emerging markets because it’s still more of a frontier economy scenario. The one country in which the financial flows should have been stronger is South Africa, where portfolio investments into financial current accounts are much larger and therefore outflows of bonds or equities has a bigger effect on currency, bond market, equity prices.

We have seen, in recent years, about a dozen countries in the region issue bonds in foreign currency. Therefore as investors move out, spreads can be pushed upward. However, even during the latest episodes of emerging market turmoil, spreads in sub-Saharan Africa have moved less than those of other emerging markets that are paradoxically deeper given they are in general more liquid markets.

Do you think countries like Nigeria and South Africa should be defending their currencies and propping them up?
Not necessarily. If there are currency pressures, this can be due either to global factors such as a slowdown in China, falling commodity prices, tapering and tightening in the US; or it could be due to poor economic policies that are more internal.
If the currency pressure is due to global shocks, then maybe it’s debatable how much you want to resist it, especially if you do have a current account deficit like South Africa.

But do you let the currency fall gradually – an orderly fall is part of the adjustment process – or risk letting the currency go into free-fall – which will be risky?
I would not use the reserves to prop up the currency. If you want really to slow down the rate of currency depreciation, probably tighter monetary policy is the more appropriate response rather than wasting precious reserves to try to prop it.
But in a country like South Africa where growth is already very low, excessive monetary tightening is probably undesirable.

To add to the problem, interest rates generally in Africa are already extremely high, which makes life very difficult for SMEs and those who want to invest. Yes, access to finance is an issue throughout the continent especially for SMEs. Larger corporates have access to international capital markets.

These high interest rates reflect higher inflation but they also reflect some risk and they reflect a not-very-well-developed banking system and capital market so the cost of financing tends to be high, especially for small and medium-sized enterprises throughout the region. - in African Business


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

Populist Parties to take power in Europe If income & Job Growth do not pick up soon

If income and job growth do not pick up soon, populist parties may come closer to power at the national level in Europe, with anti-EU sentiments stalling the process of European economic and political integration. Worse, the eurozone may again be at risk: some countries (the United Kingdom) may exit the EU; others (the UK, Spain, and Belgium) eventually may break up.

Read more at http://www.project-syndicate.org/commentary/nouriel-roubini-likens-the-rise-of-nationalism-today-to-that-of-authoritarian-regimes-during-the-great-depression#VDXsrcLhBMColD8J.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

The Great Backlash by Nouriel Roubini

NEW YORK – In the immediate aftermath of the 2008 global financial crisis, policymakers’ success in preventing the Great Recession from turning into Great Depression II held in check demands for protectionist and inward-looking measures. But now the backlash against globalization – and the freer movement of goods, services, capital, labor, and technology that came with it – has arrived.

This new nationalism takes different economic forms: trade barriers, asset protection, reaction against foreign direct investment, policies favoring domestic workers and firms, anti-immigration measures, state capitalism, and resource nationalism. In the political realm, populist, anti-globalization, anti-immigration, and in some cases outright racist and anti-Semitic parties are on the rise.
These forces loath the alphabet soup of supra-national governance institutions – the EU, the UN, the WTO, and the IMF, among others – that globalization requires. Even the Internet, the epitome of globalization for the past two decades, is at risk of being balkanized as more authoritarian countries – including China, Iran, Turkey, and Russia – seek to restrict access to social media and crack down on free expression.
The main causes of these trends are clear. Anemic economic recovery has provided an opening for populist parties, promoting protectionist policies, to blame foreign trade and foreign workers for the prolonged malaise. Add to this the rise in income and wealth inequality in most countries, and it is no wonder that the perception of a winner-take-all economy that benefits only elites and distorts the political system has become widespread. Nowadays, both advanced economies (like the United States, where unlimited financing of elected officials by financially powerful business interests is simply legalized corruption) and emerging markets (where oligarchs often dominate the economy and the political system) seem to be run for the few. Read more at http://www.project-syndicate.org/commentary/nouriel-roubini-likens-the-rise-of-nationalism-today-to-that-of-authoritarian-regimes-during-the-great-depression#2Lweo7dIoof5vJg6.99






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

Ukraine : The Cold War could become a Hot War

Schatzker: Yes. We’ve got to take the opportunity. Let’s go global. Nouriel, right now it would seem to most people like the situation that’s unfolding in Ukraine, especially as it concerns Russia, presents the single biggest risk, but maybe it isn’t. I want you to share with us your view of what’s happening there, how you think it’s going to unfold, and whether we’re missing something bigger.

Roubini: Certainly among the global tail risks, the one coming from Ukraine is the most important one. There is the beginning now of a new cold war between the West and Russia, and this cold war could actually become a hot war if it’s possible Russia were to effectively destabilize and invade the eastern provinces of Ukraine, in which case things would escalate. You could have another episode of global risk aversion. If this were to become a real war, (inaudible) even a situation in which the supply of gas to Europe may be cut off from Russia. The European economy is barely now recovering from a recession. That could tip back the eurozone into a recession.

Ruhle: From a risk management from a 1 to 10 scale, how concerned are you that things could get catastrophic there?

Roubini: Well today I would say the risk is around 7 and raising because the situation is (inaudible) one in which Russia seems to be really very aggressive in Ukraine. They want to try to take over Ukraine, and therefore an escalation is likely to occur.

Schatzker: Okay, but an escalation in what form? You talked about the possibility that this might become a hot war, which – which I take to mean the use of force on both sides.

Roubini: Yes. Yes. (Inaudible).

Schatzker: That assumes that NATO will act -

Roubini: Suppose that Russia at this point decides to effectively either to destabilize, invade the eastern province of Ukraine. Two things will happen. The stance (ph) of the West will have to become more Russia and Russia could have (inaudible) going as far as limiting the supply of gas not just to Ukraine but also to Western Europe. Secondly, the NATO, even if they’re not going to have a military intervention, they’ll have certainty provide some military support to the government in Kiev. And that means that this war could escalate for quite a while. And therefore from a financial market point of view, there may be contagion deriving two (ph) advanced economy’s financial market, especially in the eurozone.

Schatzker: But could it really escalate for quite a while? Because we know that if Putin wants to exercise force in a big way, he can. And there’s really nobody capable of responding to it other than the United States.

Roubini: Well, the situation is such that even if he wanted to use force there (inaudible) first of all. Secondly, he’s not going to invade all of Ukraine. And you don’t know for how long a military conflict of this sort is going to continue, especially if the US and Europe were then to support militarily the government in Kiev. This war could continue and last for a while. So I’m saying this is not my baseline, but there is certainly downside risk that that will happen. But even a baseline (inaudible) remains lingering for a while, at some point investor may become worried about it.

Ruhle: What does all this mean for the European economy?

Roubini: Well the eurozone right now is recovering. There’s been a severe recession. There’s the beginning of an economic recovery, but this is a recovery that’s fragile, it’s anemic, it’s uneven, especially in the periphery of the eurozone. I would say the last thing that the eurozone can afford and need right now is another shock coming from an increase in gas prices and or even a cut off of supply of gas coming from Russia to the Western European economies. That would tip the European economies back into a recession if that were to occur.

- in Bloomberg





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

Russia & Ukraine could affect The European Recovery

Ruhle: What does all this mean for the European economy? 

 Roubini: Well the eurozone right now is recovering. There’s been a severe recession. There’s the beginning of an economic recovery, but this is a recovery that’s fragile, it’s anemic, it’s uneven, especially in the periphery of the eurozone. I would say the last thing that the eurozone can afford and need right now is another shock coming from an increase in gas prices and or even a cut off of supply of gas coming from Russia to the Western European economies. That would tip the European economies back into a recession if that were to occur.

Nouriel Roubini of Roubini Global Economics, discusses how Russia and Ukraine could affect the European recovery, market preparedness for a potential slowdown in the Chinese economy and why he sees a less dovish Federal Reserve in the near future from the 2014 Milken Global Conference on Bloomberg Television’s “Market Makers.” 



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 on returning to Normal Interest Rates

CHFA Roubini Trailer : Roubini Thoughts on returning to Normal Interest Rates



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: Fiscal Drag Is Damaging U.S. Growth

Roubini: Fiscal Drag Is Damaging U.S. Growth Nov. 7 (Bloomberg) -- On today's "Chart Attack," NYU Stern School of Business Professor Nouriel Roubini and Bloomberg's Matt Miller look at how the government is weighing on economic growth. They speak on Bloomberg Television's "Street Smart." (Source: Bloomberg) Nouriel Roubini is an American professor of Economics at New York University`s Stern School of Business and chairman of RGE Roubini Global Economics


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

Ukraine War could Continue & Last for a while

Roubini: Suppose that Russia at this point decides to effectively either to destabilize, invade the eastern province of Ukraine. Two things will happen. The stance (ph) of the West will have to become more Russia and Russia could have (inaudible) going as far as limiting the supply of gas not just to Ukraine but also to Western Europe. Secondly, the NATO, even if they’re not going to have a military intervention, they’ll have certainty provide some military support to the government in Kiev. And that means that this war could escalate for quite a while. And therefore from a financial market point of view, there may be contagion deriving two (ph) advanced economy’s financial market, especially in the eurozone.

Schatzker: But could it really escalate for quite a while? Because we know that if Putin wants to exercise force in a big way, he can. And there’s really nobody capable of responding to it other than the United States.

Roubini: Well, the situation is such that even if he wanted to use force there (inaudible) first of all. Secondly, he’s not going to invade all of Ukraine. And you don’t know for how long a military conflict of this sort is going to continue, especially if the US and Europe were then to support militarily the government in Kiev. This war could continue and last for a while. So I’m saying this is not my baseline, but there is certainly downside risk that that will happen. But even a baseline (inaudible) remains lingering for a while, at some point investor may become worried about it. 
- in www.businessinsider.com



 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: A New Cold War Has Begun, And It's At Risk Of Becoming A Hot War

"There is the beginning now of a new cold war between the West and Russia," Roubini said in an interview with Bloomberg TV's Eric Schatzker and Stephanie Ruhle. "And this cold war could actually become a hot war if it’s possible Russia were to effectively destabilize and invade the eastern provinces of Ukraine."

"Certainly among the global tail risks, the one coming from Ukraine is the most important one. There is the beginning now of a new cold war between the West and Russia, and this cold war could actually become a hot war if it’s possible Russia were to effectively destabilize and invade the eastern provinces of Ukraine, in which case things would escalate. You could have another episode of global risk aversion. If this were to become a real war, (inaudible) even a situation in which the supply of gas to Europe may be cut off from Russia. The European economy is barely now recovering from a recession. That could tip back the eurozone into a recession". - in www.businessinsider.com



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

Nouriel Roubini vs. Peter Schiff -- CNBC Fast Money 05-14-2014

original air date: May 14, 2014. Schiff debates Roubini on inflation, consumer response to falling prices/expectations of lower prices in the future. Schiff challenges Roubini to name one thing he's put off buying because he believed the price would come down in the future, and Roubini can't name one. Original air date CNBC Fast Money May 14, 2014.




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

US Banks Are Even-Bigger-To-Fail

"Five years after Lehman's collapse US banks are even-bigger-to-fail given consolidation: J.P. Morgan taking over Bear Stearns, Bank of America taking Countrywide & Merrill Lynch, Wells Fargo taking Wachovia." - in Twitter
Related stocks: Bank of America (BAC), J.P. Morgan (JPM), Wells Fargo (WFC)
Nouriel Roubini is an American economist. He teaches at New York University's Stern School of Business and is the chairman of Roubini Global Economics.


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

Nouriel Roubini -- Double Dip Recession 5 20 2010 CNBC

 Nouriel Roubini, aka "Dr. Doom," said he sees stocks going down another 20 percent and that cash is the safest place to be





 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 : QE tapering to have positive impact on S. Korea

Future tapering of the U.S. quantitative easing (QE) would influence the South Korean economy positively, a New York University economics professor said Monday. "QE tapering will be positive to Korea," Nouriel Roubini said in Seoul at a meeting with South Korean Finance Minister Hyun Oh- seok, noting that the QE tapering would mean a recovery of the U.S. economy, on which South Korea heavily depends for trade, according to the Finance Ministry. Interest rate hikes in the U.S. would lead to strong U.S. dollar, having a positive impact on exports, which account for around half of the South Korean economy, said Roubini. In addition, Roubini also said that South Korea held a positive position in terms of fiscal balance and sovereign debts, assessing that the April supplementary budget was appropriate and contributed to the country's recovery.


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

US Economy : Despite of QEs There is going to be a Recovery

 "I thought I was 'Dr. Doom until I met Peter," NYU economist Roubini said Wednesday. "Compared to him, I'm 'Dr. Boom.' He has been predicting a collapse of the dollar, gold going through the roof and inflation rising sharply. I just see the opposite. I see the U.S. economy—which, in spite of QE1, QE2, QE3—there's going to be an economic recovery."
"The real point of the argument and the panel was over inflation, over whether it was good or bad. Nouriel's point is that he believes that economies need a certain amount of inflation to grow, and that somehow consumers are better off if the prices of the things that they need and want go up every year," he said.- in CNBC



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 : We Are in the beginning of Credit Bubble

“All the risky things that were happening back in ’06 and ’07 are back again to the same level, if not more,” Roubini told Fox Business Network (FBN). “So we are in the beginning of a credit bubble, but just the beginning. A year or two from now, with the policy rate still barely above zero, the risk is that it becomes a full-fledged bubble.”
Roubini warned that if the Fed ends its easing initiatives then a bond market crash could occur and eventually destroy the economy: “If you exit too late, you create a financial bubble. That’s the biggest challenge for the Fed in the next three to four years.”


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 Warns Canada’s Housing Bubble about to Burst

‘Dr. Doom’ warns Canada’s housing bubble about to burst | It’s the doctor versus the governor in the ongoing debate over the direction of Canada’s housing market. On the pessimistic side there’s
Nouriel Roubini, the man known as “Dr. Doom” for his pessimistic outlook on the global economy. He recently pinpointed Canada’s housing market as a bubble set to pop.
Canada is in the company of other housing markets that Roubini (known as one of the few to correctly predict the U.S. housing crash) says are showing “signs of frothiness, if not outright bubbles,” including Switzerland, Sweden, Germany, Australia and New Zealand. - in ca.finance.yahoo.com


 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 on China's coming Slowdown

But a hard landing becomes more likely as the stimulus fades, nonperforming 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. - in Irish Times

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 : I totally disagree with Peter Schiff

"Falling prices do not threaten consumers," he said. "Consumers benefit from falling prices."
"What you're saying about deflation is nonsense," Roubini told Schiff as the two sat next to each in front of thousands of hedge fund managers and investment pros.
"I totally disagree with Peter. His arguments about deflation are nonsense," Roubini continued. "We had deflation with the Great Depression…We had 20 years of deflation in Japan where there was no economic growth."






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