How to Save a Friend from the False Prophet Nouriel Roubini

By Damien Hoffman

October 20 2009 Email

Intuitive Surgical Hits $393!

The Hoffman Brothers called ISRG at $152 and it ran to $393 for a 158% gain! See what the Hoffman Bros recommend you buy NEXT.

Click Here Now

In August I wrote an article “Is Nouriel Roubini a False Prophet?” Apparently, some people are so smitten with Roubini they actually ignored all the cited articles and said, “No.” Consequently, I teamed up with a bunch of people around the world on an open source project to continue our mission exposing false prophets and help unwash those well-meaning brains.

This video is a large collection of evidence proving Roubini has a horrendous record as a prognosticator. If you too know someone who has been listening to the seductive sounds of Roubini’s mantras, send them this helpful deprogramming message.

(Before posting baseless comments in support of someone who cannot even beat an Index ETF, please take the time — as we did — to read ALL of Roubini’s articles and all the other sources listed in the Bibliography. This is ALL public record. We are not making it up … Roubini did.)

Click here to Read “Is Nouriel Roubini a False Prophet?”

Bibliography

Read all Roubini’s papers and articles at http://ideas.repec.org/e/pro145.html

http://www.realclearmarkets.com/articles/2008/11/nouriel_roubini_and_the_folly.html

http://www.erictyson.com/articles/20081024_1

http://business.theage.com.au/business/economist-with-a-nose-for-trouble-20090909-fho8.html

http://www.institutional-economics.com/index.php/search/results/3745afeac994129ee0e431846d54b6d3/

http://www.businessinsider.com/newsflash-economists-like-roubini-arent-good-market-timers-2009-8

http://bloomberg.com/apps/news?pid=20601087&sid=aFs0mX7rBp0M

http://www.usnews.com/money/blogs/the-home-front/2009/04/09/nouriel-roubini-calls-jim-cramer-a-shameless-buffoon.html

http://www.calculatedriskblog.com/2008/02/roubini-testifies-to-congress.html

http://online.wsj.com/public/resources/documents/econoblog03292005.htm

http://www.washingtonpost.com/wp-dyn/content/article/2006/02/23/AR2006022301412.html

http://www.newyorker.com/archive/2006/02/06/060206ta_talk_cassidy

http://www.financialsense.com/fsu/editorials/baker/2006/0227.html

http://www.usatoday.com/money/economy/2006-08-23-recession-usat_x.htm

http://www.marketwatch.com/story/bears-still-growling-about-1987

http://www.businessweek.com/investor/content/aug2006/pi20060821_478985.htm?chan=top+news_top+news+index

http://nymag.com/realestate/features/21675/

http://www.nytimes.com/2008/08/17/magazine/17pessimist-t.html

http://query.nytimes.com/gst/fullpage.html?res=9D04E2D81338F930A35753C1A9629C8B63&sec=&spon=&pagewanted=all

http://www.newsweek.com/id/55276

http://www.nytimes.com/2004/12/19/business/yourmoney/19watch.html

Want the best possible analysis of US banks instead of hot dog filler? We are proud to have hand-selected Institutional Risk Analytics (IRA) as a partner to offer our audience products and services to become better investors. IRA offers advanced analytics for risk surveillance and investment research via subscription products such as the IRA Bank Monitor for Professionals covering the US banking industry and the IRA Corporate Monitor covering public companies. For a trial subscription or an on-line demonstration, please click here to register.

Economic Policy

Sharing Is Cool

Looking for Profits? Wall St. Cheat Sheet Premium subscribers have been crushing the markets with winning stock picks and a professional navigator in the hot gold and silver sectors. Let our team of professionals give you their best investing and trading ideas:

Click here now for your FREE trial to any of our acclaimed newsletters

Readers who liked this also enjoyed these posts:

AJ

You consider a call wrong just because it was not "immediately" right. He is a big picture person, not a qtr to qtr market call commentator (who are wrong 90% of the time). The fact that 2005 was an aberation in a longer term downward trend in the dollar was "correct" not wrong. Look at the dollar since 2005. Who cares if it got a "temporary relief" late in 2008. Where is it now? I bet you would call someone wrong if they started being pessimistic in 2005 right? But to a bigger picture investor it doesn't matter. Who would have turned out better? Someone who got defensive in 2005 and missed out on the 5% gain in 2005 and the 16% gain in 2006? Or the one who stayed the whole time and went back to 10 year ago+ levels? You focus on mole hiles instead of the mountains.
Damien Hoffman

In the long run, we are all dead. Does that make me a macro genius?

I posted ALL the links to all the citations. Read all of Roubini's papers. It is very clear he is not nearly as good an economist as he holds himself out to be. As I've stated many times before, if an innocent person at home saw Roubini on TV they would have lost tons of money unless they caught him when the broken clock was correct. If you were short from 2005 through 2007, it would have been hell. Two years is macro in my book.
Derrick Carlo

I just came across your website and read your article. Have you for one moment thought to give Mr. Roubini credit for, in essence, being mostly correct. The fundamentals of the economy are horrendous and have been for a while. The real story is the utter market manipulation by Black Box trading. How do you think any economist would be entire correct on ANY prediction when the market is not allowed to adjust (up or down) naturally. Give me a break. If you want to be selective on picking apart his predictions or economic analysis, factor in the manipulation and and adjust accordingly.

Lastly, if over the past few years Goldman and others did have direct access to the backdoor fed window, and massive tax payer bailout funds, Mr. R would be spot on.
Damien Hoffman

His record is horrible. Plain and simple. What should he get credit for? Being bearish starting in 2005? If you invested in Roubini each time he made a call, you would have lost a TON of money. Read all the articles in the bibliography, mark the dates, and go long or short based on his call.

Moreover, he has been 100% wrong since March of this year AND said oil would stay below $40 a barrel all year. Again, if you invested based on his calls you would not be defending him. His net return is far worse than investing in an ETF. All the facts are public knowledge. Reading and watching them all will take a fair investment in your time. But the truth is all there.
Alex

I agree with you his record like most forecasters (minus Grantham of course) is not as good as one would think listening to the bubble heads.

However, most of the guys who saw this coming, who were "right", were somewhat to massively early. And you cant really blame them, the big picture was written on the wall for years just like in the late 90's but bubbles can persist.

Furthermore, the one call you claim he got right was by far a bigger score. think of all the big bank forecasters who say market is going up 10% this year, they are right right right then dead wrong. Paulson and Prem Watsa are good examples of guys who were early with one huge trade but cashed in handsomely because of how big a score it was. One only needed to have deep out of the money puts for one month in 1987 to rack of a career's worth of performance.

Im less defending Roubini and more saying rating macro gurus objectively is very hard to do, especially in a bubble environment where the "right" long term result was highly delayed.
Damien Hoffman

Alex,

Thanks for the thoughtful comment. I wish Roubini would make it even harder and simply stick to economics and give up the forecasting. Economics and forecasting do not mix. LOL.

All the best,

Damien
Will Ortel

you've done a lot of admirable work here, but I really wish you had concocted your arguments more professionally without resorting to arguing that Roubini pulls his arguments out of his bunghole.
Damien Hoffman

Will, I will keep that in mind for future production. He told the IMF he pulled them out of his nose, so I figured he was simply substituting a more appropriate body part while addressing a major institution. I was simply trying to translate. However, you are correct and I will remove that in the future.

My aim is not to offend, only shine the light on the real record for those who may see a "prophet" on TV and invest based on his/her advice.

Thanks for the support!
Broker Sense

Wow, well done video!
Wendy M.

Excellent work!

Let me make an important point here. Roubini's image is not merely
sustained by cult worshippers. Roubini is given a major boost by
people of a leftist persuasion whose motive is to blur a proper
description of the financial crisis and to give people the impression that no solid, self-consistent, scientific explanation of economic events is possible. By rambling from one vacuous explanation to another, they are attempting to divert attention and dismantle scientific thinking.

They benefit from this because it allows them to make any statement
they wish, no matter how ridiculous and devoid of connection to
reality, and still retain reputation, influence, and political power. After all, if no solid, non-wishy-washy explanations are possible, then their "explanations" are as good as anyone else's, in fact, better, because by their rambling, they cover all the bases, which they can then point to, while the honest have nothing they can point to as proof to others that they have a better grasp of things.

Roubini's ilk try to give people the impression that we live in a
Heraclitean universe, that understanding causal chains is a hopeless process, and thus only those people with some mystical "It" factor can divine the future. Roubini and his ilk are the new witch doctors.
Jake L.

Job well done with the video, Damien. It's about time smart people like yourself go deeper than what the mainstream media projects.
Damien Hoffman

Thanks, Jake! I posted the full Bibliography as well so people can read it all themselves. It will be there forever. I love the Information Age!
LT

Damien, would you please do a similar video for David Tice? David has been crying wolf for a long time and by chance his prediction came true in 2008- early 2009 but he continues with his bad calls.
Damien Hoffman

Sure. Can you send me some links?
Thanks, LT!
LT

Damien, here is a link with more predictions of Roubini:

http://www.bloomberg.com/avp/avp.htm?N=av&T...

Let's keep the scoreboard on!
Damien Hoffman

Thanks, LT!! We have a big scoreboard surprise on the way ;)
LT

Look forward to seeing it!