What would it mean if Roubini wasn’t worried? I wonder at which point in history we had nothing to worry about as equity investors? Maybe early in 1999?
Here is the article:
Nouriel Roubini is worried about the global economy. While that's nothing new for the man often referred to as Dr. Doom, what's maybe different this time is that, in addition to detailing the problems, he's packing a slew of solutions.
With Daniel Alpert of Westwood Capital and Cornell Law Professor Robert Hockett, Roubini has co-authored a new report entitled The Way Forward: Moving From the Post-Bubble, Post-Bust Economy to Renewed Growth and Competitiveness.
Wednesday night in New York City, the three spoke before a small gathering organized by The New America Foundation, which commissioned the report. Before discussing the trio's policy recommendations, Roubini laid out the 8 reasons why he's still so worried about the global economy (or is it "still" so worried?).
Here's a summation, which itself can be summed up as: There are several negative trends that could devolve into a "vicious cycle," pulling the global economy into another deep recession, or even something worse:
1) Tail Risks: In recent days, Wall Street has seemingly become optimistic Europe is on its way to solving its sovereign debt/banking crisis, but Roubini is dubious. "They have a plan to have a plan," he scoffs of the latest news from the Continent. (See: European Debt Crisis Reaches "the End of the Beginning": Martin Wolf )
The situation in Europe is "extremely troubling" and after attempting to "extend and pretend," policymakers now "have no luxury of waiting," he says. EU officials have weeks (not months) to develop and implement a plan that is "credible and front-loaded," Roubini says. Failure to do so could result in bank failures, sovereign defaults or even a "disorderly disintegration" of the EU, any of which could turn the potential for a "mild recession" into a global crisis "as severe as Lehman if not worse."
(Roubini also warned of the risk of a "hard-landing" in China but says that is probably a 2013 or 2014 story.)
2) Risk Aversion: Given the myriad global uncertainties, businesses see "there is value to wait," meaning less capital expenditures and less hiring. This dynamic can become "self-fulfilling" and lead to a "crisis of confidence," Roubini says.
3) Negative Feedbacks: Recent improvements in financial markets notwithstanding, Roubini worries about the "vicious cycle" of market volatility leading to poor economic activity leading to more market volatility, and so on and so on.
4) Joblessness in America: Last week's better-than-expected jobs report brought hope to some observers, but not Roubini, who notes U6, a.k.a. the "real" unemployment rate, rose to 16.5%, the highest level of the year. The risk, Roubini says, is the "cyclical" problem of joblessness "can become permanent" for those out of work for an extended period, and the ranks of the long-term unemployed rose to 6.24 million in September, or 44.6% of the total unemployed.
Link to remainder: http://finance.yahoo.com/blogs/daily-ticker/8-reasons-nouriel-roubini-still-worried-plan-save-114827352.html#more-id?sec=topStories&pos=9&asset=&ccode=
Here is the article:
Nouriel Roubini is worried about the global economy. While that's nothing new for the man often referred to as Dr. Doom, what's maybe different this time is that, in addition to detailing the problems, he's packing a slew of solutions.
With Daniel Alpert of Westwood Capital and Cornell Law Professor Robert Hockett, Roubini has co-authored a new report entitled The Way Forward: Moving From the Post-Bubble, Post-Bust Economy to Renewed Growth and Competitiveness.
Wednesday night in New York City, the three spoke before a small gathering organized by The New America Foundation, which commissioned the report. Before discussing the trio's policy recommendations, Roubini laid out the 8 reasons why he's still so worried about the global economy (or is it "still" so worried?).
Here's a summation, which itself can be summed up as: There are several negative trends that could devolve into a "vicious cycle," pulling the global economy into another deep recession, or even something worse:
1) Tail Risks: In recent days, Wall Street has seemingly become optimistic Europe is on its way to solving its sovereign debt/banking crisis, but Roubini is dubious. "They have a plan to have a plan," he scoffs of the latest news from the Continent. (See: European Debt Crisis Reaches "the End of the Beginning": Martin Wolf )
The situation in Europe is "extremely troubling" and after attempting to "extend and pretend," policymakers now "have no luxury of waiting," he says. EU officials have weeks (not months) to develop and implement a plan that is "credible and front-loaded," Roubini says. Failure to do so could result in bank failures, sovereign defaults or even a "disorderly disintegration" of the EU, any of which could turn the potential for a "mild recession" into a global crisis "as severe as Lehman if not worse."
(Roubini also warned of the risk of a "hard-landing" in China but says that is probably a 2013 or 2014 story.)
2) Risk Aversion: Given the myriad global uncertainties, businesses see "there is value to wait," meaning less capital expenditures and less hiring. This dynamic can become "self-fulfilling" and lead to a "crisis of confidence," Roubini says.
3) Negative Feedbacks: Recent improvements in financial markets notwithstanding, Roubini worries about the "vicious cycle" of market volatility leading to poor economic activity leading to more market volatility, and so on and so on.
4) Joblessness in America: Last week's better-than-expected jobs report brought hope to some observers, but not Roubini, who notes U6, a.k.a. the "real" unemployment rate, rose to 16.5%, the highest level of the year. The risk, Roubini says, is the "cyclical" problem of joblessness "can become permanent" for those out of work for an extended period, and the ranks of the long-term unemployed rose to 6.24 million in September, or 44.6% of the total unemployed.
Link to remainder: http://finance.yahoo.com/blogs/daily-ticker/8-reasons-nouriel-roubini-still-worried-plan-save-114827352.html#more-id?sec=topStories&pos=9&asset=&ccode=
