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Nouriel Roubini and His Acolytes
Psychics and prophets have been in business since that other oldest profession. Like the more commonly referred to oldest profession, the secret to success for psychics and prophets is to turn many tricks.
As a lawyer by training, I have been rigorously conditioned to see the logical techniques employed in everything I hear and read the same way Neo from The Matrix sees the 1′s and 0′s underlying superficial reality. So, I am concerned when I watch self-proclaimed psychics and prophets use the equivalent of logical black magic to seduce their prey.
Wall Street has a laundry list of such charlatans. They tend to capture the spotlight during the heat of emotional peaks in the markets because emotion and reason tend to maintain an inverse relationship. During times of crisis we need something, sometimes anything, to reduce our pain and restore order to an uncomfortable new chaos.
During the height of the most recent economic crisis, the media offered the center-stage spotlight to NYU Economics Professor Nouriel Roubini to comfort us with his soma. At the peak of the crash, Roubini was as ubiquitous as Coca-Cola and cellphones. He was the go-to guy because his PR team branded him as “The Prophet of Doom.” A perfect fit when you need someone to call at an overwhelmingly bullish place like Wall Street.
Roubini is clearly an intelligent fellow who has produced some interesting works. However, just as clearly, he is not a prophet or anything close. More accurately, Roubini has disingenuously promoted himself as nailing the crisis, when truthfully he was wrong until other hard working analysts fixed his broken crystal ball.
Like any lawyer preparing to argue in front of the Supreme Court (of public opinion, in this case), I made sure to do my homework and collect my evidence boxes of smoking guns. Rather than bore you with a full recount, I have pulled the most important comments from each source and linked to the original material for your due diligence pleasure. So, without further ado, I respectfully address the court:
As we can see, in March 2005 Roubini started by predicting a crisis caused by Foreign Central Banks diversifying out of US Dollars. (See: ‘Does Overseas Appetite for Bonds Put the U.S. Economy at Risk?’) In February 2006, Roubini still solely focused on foreigners diversifying out of US Treasury debt and further incorrectly predicted that “our current patterns of spending above our incomes” would cause a crisis by 2013. (See: ‘Taste of the Future‘.) Given that the credit markets (which Roubini never mentions until others show him the light) imploded recently, I think we can conclude that “spending above our incomes” doesn’t have to do the crisis perp walk. During the same month as The Washington Post article, Roubini’s press releases peppered the New Yorker with his message: “Roubini is among those who fear that America’s profligacy will eventually create a crisis of confidence on the part of its creditors, leading to a run on the dollar, an upward spike in interest rates, and a deep recession.” (See: ‘Moneyman’ and ‘Ominous Warnings and Dire Predictions of the World’s Financial Experts’.)
At a transition point in August 2006 (most likely when Roubini realized he picked the wrong causes), he threw the entire kitchen sink into the center of the causation ring. The USA Today reported, “He [Roubini] spells out a long list of potential risks that could push the country into trouble. Among them: unregulated hedge funds, housing, foreign trade uncertainty, the need to finance the nation’s huge trade deficit, Middle East unrest and the potential for terrorism.” In another article, Roubini added to his laundry list by adding just about everything under the sun: “Among other factors, Roubini cites ‘trade protectionism and asset protectionism; hedgy and trigger-happy investors and rising geopolitical risks; the risk of a disorderly fall in the U.S. dollar; a slush of financial derivatives that are a black box that no-one understands … frothy markets where years of too easy money have created bubbles galore – the latest in housing – that are ready to burst; a bubble of thousands of new hedge funds with inexperienced managers … a housing market whose rout may trigger systemic effects …’” (See: ‘Is Economy Headed to a Soft Landing?’ ‘Surprise: Bears still growling about 1987′ and ‘Recession Isn’t My Greatest Fear’.) How about adding to that list butterflies flapping their wings on the other side of the world, or an attack of the flying space monkeys?
This specific tactic — expanding the “prediction” data set of possibilities — may be the most popular for false prophets and psychics. Usually, there will be a group willing to hang on to the one correct cause out of the many incorrectly asserted. Then, afterward, the charlatan works tirelessly to rewrite history or distract his victims from what was exactly said in the past. It’s like a fake shaman warning the villagers of rain (an inevitable fate) by means of angry gods when in fact the true cause was heavy cloud droplets. Yet, once the rain falls he quickly raises his voice about how he “predicted” the rain. Yes, rain followed the shaman’s warning, but this is not a “prediction” for obvious reasons.
Moving along, in September 2006, Roubini spontaneously switched his focus onto a new cause: the housing market. However, as we can see, he still completely misses the most important detail that the cause of the crisis was the funding of houses in the credit markets — not basic economic fundamentals of the underlying housing market. (See: ‘The Descent’.) But can you really blame an economics professor for getting pigeon-holed by his lifelong macroeconomic framework? If Roubini were to have actually found the afikomen (Hebrew translation “dessert”), he would have needed an ear to the extremely niche, real-world Collateralized Debt Obligation (CDO) markets which he had no reason to follow at NYU.
Clearly, the evidence above indicates Roubini never understood that the CDO market was the largest buyer of Mortgage Backed Securities (MBS). Moreover, he never mentioned that once the Fed took away the punchbowl with consecutive rate increases, the ability to refinance crap loans would disappear like a breath in the wind. Rather, Roubini incorrectly attempted to predict that the collapse of the US Dollar would cause the Fed to raise rates, thereby causing “a sharp slowdown of the US and global economy.” (See: ‘Does Overseas Appetite for Bonds Put the U.S. Economy at Risk?’) So, we are left to conclude that Roubini was simply tossing generalities into the press as not to miss the call until too long after the media found another darling.
By this point it must be noted that other bright yet less media friendly economists and fund managers were chattering about the true details of what would ultimately cause the crisis. Thus, Roubini was at liberty to take others’ research and repackage it as his own to a journalist at the New York Times who did not do his fact-checking, Fourth Estate duties. (See: ‘Dr. Doom’.) Once Roubini was legitimized by The New York Times, subsequent journalists assumed the original facts were checked and lazily relied on The Times’ reputation rather than double-check.
I am not writing this article because I care about Roubini. Like countless others, he is a talking-head trying to make money in a capitalist system. I am writing this article because it is time to give out the medals to the true heroes who put their careers in jeopardy to uncover truths no one wanted to hear — especially the general plasma-screen engorged public, prospective clients, bonus-induced professionals on Wall Street and at real estate/housing related companies, and politicians with record tax collections in their purses.
So, this piece serves two purposes: 1) mainstream journalists need to start fact-checking before allowing one bit of bad journalism to become a false truth heard ’round the world, and 2) I am laying the groundwork and sweeping the streets for the true heroes’ parade. Stay tuned …
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To be fair, I don’t think ANYONE, economist, talking head, paid prognosticator or even Madame Marie had accurately predicted both the cause as well as effect of the current economic crisis.
I’ll tell ya why.
It’s because no one but Olbermann and Palast are willing to investigate or examine the activities of Phil Gramm.
And only Phil and his wife Wendy know the full story of America’s current economic demise.
I have a list of diligent people who correctly called the crisis for the correct reasons. Stay tuned …
I applaud you for your efforts to bring light to the subject of Roubini and his “Dr. Doom” fame.
I myself have noticed that his predictions about the housing downturn were rather generic and did not hone in on any specific causes. Ever since then, a number of media pieces have referred to him as “the man who predicted the financial crisis”, further cementing his claim.
After that, he has been simply riding on that one call and enjoying his 15 minutes of fame. As early as March of this year he was talking about a one-third chance of an L-shaped Japanese-style recession, with years of lost growth.
More recently, he has been changing his tune and become more positive. Wouldn’t be surprised if he starts talking about the end of the recession and resumption of economic growth this year once it becomes too obvious to be denied.
Pam, I am glad you are paying attention! I have had some great people contact me with even more details of Roubini’s flip-flopping. I will be posting that as well because apparently there are enough people who don’t want to accept the truth (see the rest of the comments above with zero fact-based rebuttals from anyone who has even read Roubini’s papers).
Good piece.
Most journalists are dolts and don’t dig.
Eric Tyson did an excellent piece on Roubini last fall:
http://www.erictyson.com/articles/20081024_1
Keep up your good work!
I will look into that. Thanks for the compliment and tip, Walker!
Dr. Keen, who writes the DebtWatch blog saw it coming based on his work studying the massive amount of debt relative to GDP and modeling Minsky’s Financial Instability Hypothesis.
http://www.debtdeflation.com/blogs/
http://www.debtdeflation.com/blogs/2009/07/15/no-one-saw-this-coming-balderdash/
I’ve been reading Roubini’s articles regularly this year. I find that he provides a calm, rational, broad overview that I don’t find anywhere else. Everyone else is myopically focused on one aspect or issue or short term knee jerk reaction. The MSM is just a shotgun blast of tidbits and irrational extrapolations and questions with no answers designed to keep everyone confused and coming back for more. It’s no wonder Coffee is the the second most purchased commodity after oil and that the number of people on tranquilizers in this country is astounding – up,down,up,down…
So I find his calm overview to be very useful information. I never did see him a prophet.
Jim, I agree that Roubini is a very logical and easy to follow economist. His skills as a professor undoubtedly aid him in this area. However, if you have been following him regularly you would have missed the 50% rally in the S&P because Roubini warned those who invested would be doomed. I didn’t even raise that point in my article. But, again, I don’t see how he adds value except as offering an opposing viewpoint to the mainstream. I believe there are much more talented (I didn’t say intelligent) and worthy people to listen to.
You are at least half correct that Roubini has articulated a series of issues on his site, some of which we have apparently avoided, some not.
However, on the issue of the housing bust and credit, while you may be correct that Roubini didn’t particularly laser in on the CDO piece, I was alerted to the risks related to subprime and related house valuation issues by a white paper published on his site in spring or summer of 2006. The paper laid out a pretty accurate analysis of over-valuing, the subprime piece, and over-supply caused by a combination of over-evaluation and oversupply. While some small pieces of the puzzle were missed (including CDO), this paper pretty much laid out the overall picture, enough to help rescue my portfolio. Roubini is not the new Messiah, which I take to be your point; on the other hand, this and several other pieces on his site were more helpful than most other public economists in helping readers like myself identify what were largely hidden reefs ahead in 2007, 2008. And he has been spot on it evaluating the extent of the credit bust, when most main stream voices began by dismissing it as “only subprime,” at least until Bear went down.
It helped that I had witnessed the oil bust and the bursting of the mini-bubble in Southern California in 1990; otherwise, I might not have paid much attention to articles on a housing bubble in 2006. But I think you are over-compensating in denying Roubini much credit.
On the 50% rally as “proof” of Roubini over-bearishness, we’ll see how long this rally persists. I hope earnings recover quickly. If not, pointing right now to a 50% rally–after the collapse we’ve witnessed–might prove a wee bit premature (just like the rise in spring/early summer 07 and then the rise in fall was used to dismiss concerns about housing/credit risks). I would prefer you to be right and me be wrong on this one, of course.
the thing about robini was he argued correctly that the sub prime crisis posed a systemic risk when most other economists (another exception: george magnus) and the ever chirpy financial press said it would be fine.
If you read the articles I linked, he didn’t get on that bandwagon until long after other pros were bringing it to his attention. Very soon I will be honoring those who correctly called the crisis for the correct reasons.
I don’t care about Roubini. He is like Cramer in many ways: he just surfed the wave. And I agree that it’s refreshing to have bears on TV to argue the other side and point out prospective issues. I just have a hard time when people take the spotlight undeservedly …
You refer to his PR people a lot. Does he really have a team like that?
Did you happen to catch him (co-hosting on CNBC) talking with Taleb the other day? It became pretty clear that he is, at heart, a traditional Keynesian economist (as you noted). More debt and stimulus are the answer.
Taleb showed his more Austrian beliefs, which is always refreshing on bubblevision. It’s funny how the two men are always lumped together, when they’re actually quite far apart policy-wise.
Yes. NR has a PR team.
Didn’t catch him on CNBC. Honestly, I hardly watch them anymore because it doesn’t add value to my portfolio or my intelligence level.
The media lumps all the bears together because they don’t take the time to differentiate them. Sad, really …
Thanks for the comment!
Beware the lawyer who starts out telling you how he is trained to see more clearly than “you” are; much like the psychic saying he has special powers of observation.
Roubini may not have gotten the sequencing right, and his macroeconomic/academic orientation do present handicaps, but he certainly made a number of good calls.
Which one? The one where he missed the entire 50% rally in the S&P? There will be another bull market and strong economy. Does that make me a great market guru?
I am not clairvoyant. But I do have rigorous training in the skill of logic. One is a science and can be learned. The other is a scam.
Tell me counselor, did you simply fail to comprehend the articles you linked, or did you intentionally misrepresent them? In the March 2005 article you mentioned, Roubini does not, contrary to your assertion, predict a crisis caused by Foreign Central Banks diversifying out of US Dollars. He merely raises the possibility of Central Banks diversifying out of dollars. Being rigorously trained in logic, you do understand the difference right?
You then go on to state: In February 2006, Roubini still solely focused on foreigners diversifying out of US Treasury debt and further incorrectly predicted that “our current patterns of spending above our incomes” would cause a crisis by 2013. Wrong counselor, he said “If we continue with our current patterns of spending above our incomes, by 2013 the U.S. foreign liabilities could be as high as 75 percent of GDP and an increasing fraction of such liabilities will be in the form of equity,” he explains. “So, let us stop whining about the dangers of unfriendly foreigners owning our firms and assets and get used to it.” First of all, 2013 has not yet arrived, and secondly, the only one using the word “crisis” is you. Sorry counselor, you have failed to carry your burden of proof. Judgment for the defendant.
LOL. I am aware of the difference. Are you? Roubini wrote a paper in 2005 with Setser. Go read it. Roubini’s core thesis was the same until a few guys schooled him to what was happening outside his ivory tower. There are plenty of citations of Roubini’s thesis. He sang it everywhere like that song, “Living La Vida Loca.” I already did my research and presented the basics. There is much more to support my case if you care to do the work …
Next, google Roubini and Crisis and you will be reading for a long time. Please don’t say Roubini never used the word “crisis.” Call it whatever you want. Semantics are a fools game. I think Roubini’s favorite word is “collapse” — at least it is during his CNBC appearances. Please go watch them all. I have already seen them. If you want to leave the 2013 door open for the guru, then what are we living through now? You see, you want to make his assertions work in his favor rather than hold him to what he said and what truly unfolded. I just hope you weren’t short the market per his “Doom” while the S&P has rallied 50% …
Also, my case is corroborated by completely public information. It is extremely clear to any financial professional that Roubini did not understand what was the true brewing causes of the crisis until well after others starting ringing the alarm bells. You are missing my point: Roubini is not the prophet he brands himself as. Yes, he is intelligent. Yes, he knows a lot about economics. But the evidence is clear that he did not live up to his self-proclaimed status as the predictor of the crisis (as the NY Times incorrectly wrote).
I am well aware that many people love Roubini with the same zeal as those who love Cramer. Again, I don’t care about any of these guys. I am pointing out that they are another product of our PR and entertainment driven media. Hence the fact that the best analysts and fund managers who were at ground zero of the economic crisis did not have their faces plastered on CNBC. Rather, it was the guy with the savviest marketing team.
With all due respect, if you want to make a real rebuttal, go read all the articles and Roubini’s papers. Then, show me point by point why I am wrong. I’ve already been through it all, so I am all ears …
Really? The evidence you use to show that Roubini didn’t understand CDOs or the credit markets supporting the housing bubble is an interview with NYmag about local housing conditions? No wonder your law career is booming.
First, I never practiced law.
Second, Roubini did not discuss CDOs in any of the articles I cited OR his papers. Go read them. You will have a blast and know why we shouldn’t credit someone who predicts the rain because of “rain gods.”
If you read my article and my replies to the comments, you would have seen that OTHER PEOPLE had to teach Roubini about the CDO market because he did not understand it. You don’t need to talk with my sources, simply read Roubini’s published works and you will see the glaring omission. Again, I did the diligence. You are welcome to as well.
LOL. I am aware of the difference. Are you? Roubini wrote a paper in 2005 with Setser. Go read it. Roubini’s core thesis was the same until a few guys schooled him to what was happening outside his ivory tower. There are plenty of citations of Roubini’s thesis. He sang it everywhere like that song, “Living La Vida Loca.” I already did my research and presented the basics. There is much more to support my case if you care to do the work …
Next, google Roubini and Crisis and you will be reading for a long time. Please don’t say Roubini never used the word “crisis.” Call it whatever you want. Semantics are a fools game. I think Roubini’s favorite word is “collapse” — at least it is during his CNBC appearances. Please go watch them all. I have already seen them. If you want to leave the 2013 door open for the guru, then what are we living through now? You see, you want to make his assertions work in his favor rather than hold him to what he said and what truly unfolded. I just hope you weren’t short the market per his “Doom” while the S&P has rallied 50% …
Also, my case is corroborated by completely public information. It is extremely clear to any financial professional that Roubini did not understand what was the true brewing causes of the crisis until well after others starting ringing the alarm bells. You are missing my point: Roubini is not the prophet he brands himself as. Yes, he is intelligent. Yes, he knows a lot about economics. But the evidence is clear that he did not live up to his self-proclaimed status as the predictor of the crisis (as the NY Times incorrectly wrote).
I am well aware that many people love Roubini with the same zeal as those who love Cramer. Again, I don’t care about any of these guys. I am pointing out that they are another product of our PR and entertainment driven media. Hence the fact that the best analysts and fund managers who were at ground zero of the economic crisis did not have their faces plastered on CNBC. Rather, it was the guy with the savviest marketing team.
With all due respect, if you want to make a real rebuttal, go read all the articles and Roubini’s papers. Then, show me point by point why I am wrong. I’ve already been through it all, so I am all ears …
“unregulated hedge funds, housing, foreign trade uncertainty, the need to finance the nation’s huge trade deficit, Middle East unrest and the potential for terrorism.”
“trade protectionism and asset protectionism; hedgy and trigger-happy investors and rising geopolitical risks; the risk of a disorderly fall in the U.S. dollar; a slush of financial derivatives that are a black box that no-one understands … frothy markets where years of too easy money have created bubbles galore – the latest in housing – that are ready to burst; a bubble of thousands of new hedge funds with inexperienced managers … a housing market whose rout may trigger systemic effects”
In this incredibly complicated mess where few people raised warning bells (relatively speaking), which one of these factors is wrong? One of the unique aspects of this recession is the complexity and overlapping of so many factors that caused it.
To blame everything under the sun for the financial crisis is simply unhelpful — and surely not worthy of any praise. There were exact causes, namely the securitization of crap debts which were branded as AAA (and later the unsecured insurance policies sold on those CDOs, i.e., Credit Default Swaps). That is when this problem spiraled out of control. The additional variables — cheap money, trade imbalances, etc. — added fuel to the fire, but the reason why we saw something unseen since 1929 is because of the CDO scam. This, unfortunately, was off Roubini’s radar until well after others alerted him and others already published works drawing our attention to the epicenter.
As a side point, Middle East unrest and the potential for terrorism did not lead to a chain of events ending with the nationwide television craze, “Flip that House!” When we ask what did, we find the exact reasons.
Speaking of missing the rally, whay do you think of Tyler Durden and his persistent bearishness from the very bottom?
According to him, everything is rigged and we’re going to zero.
You should ask him. I didn’t realize he made market calls.
Portfolio hinted at some of this in their Roubini profile.
There is a name for this dark art of clairvoyance, of creating an illusion of knowing more than you actually do.
It is called “cold reading”, and yes it is practiced by palm readers, astrologists and psychics. But it is also practiced, wittingly or nay, by economists, laywers, the media. Actually we’re all guilty of practicing and accepting it!.
Because objective reason is an illusion, if you stretch your mind far enough you might accept that we are all guilty of constructing irrational narratives to make sense of the universe in which we find ourselves.
Since we are yet to find an answer to Hume we might just as well given up on “causation”. But alas we have not, perhaps due to deep seated human desires for meaning, purpose and reason.
I’ve started a blog as an outlet for my rumination on such issues. So if you want to head deeper into the rabbit hole it check out [by clicking on my name above].
Thanks, Dan! You are now taking the conversation one step deeper in to the realm of epistemology, determination/free will, etc. I agree that each person should spend some time journeying into that special place. However, since we live in social reality, and that reality requires a modicum of meaning (illusion or not) to avoid chaos, then I’d like to focus on the relative, social reality. (see: “The Construction of Social Reality” by John Searle.)
But the point about cold reading is very interesting. I will follow up with you about that …
Wow. Just read this late tonight. Bleeding edge….loved it; brave, and clearly making a stand. Keep up the superb work
Great piece. I got sick or Roubini about five years ago with his constant predictions of a hard landing for the US dollar. Since I quit following their work I found it interesting that his former incorrect predictions were ignored and he was now a minor celeb. You have a great point about the work of psychics and other soothsayers who toss out a lot of random guesses until something sticks, a technique probably falling under the category of “cold reading.”
Thanks, Steve. I know a small group of people who have followed Roubini as closely as you and feel the same way. I appreciate you making the point.
Well Roubini was right about the wrong direction taken by the economy, and more specifically by the ever increasing debt on the US consumers , but NO ONE could have forecast the unbelievable behaviour of the US government which saved Bear Sterns from failure in march 08 and let Lehman go down the sink in september 08. This huge blunder ( Lehman ) in total contradiction with the rescue of Bear Sterns gave an electro shock to the whole financial markets who realized there was no more safety net, hence the panic which seized upon everyone. Concerning the demise of the US $ as reserve currency , Roubini was right but there is no wonder about that, everyone knows the $ is a FIAT currency ultimately holding its status because the € lacks a political will to hold it as international currency reserve. Long term the US $ has been steadily sliding since 1971 and will continue to do so.
The US Dollar is down 94% since 1933: http://wallstcheatsheet.com/?p=824. I would argue we are well into the “collapse.”
Thanks for the thoughtful comment. To go out on a limb (because there is no hard evidence), I suspect LEH was allowed to fail for a few reasons, but one being the Fed/Treasury needed to scare the shit out of everyone with an example that wouldn’t bring the entire system down like AIG for example. LEH was the legitimacy for every action thereafter. Food for thought …
First time reader here, loved the post and the blog. it’s funny how people react when you state facts about someone, then all of a sudden start making relative performance analysis. look forward to the next post. Lately, Roubini’s predictions has been changing faster than the maryland weather. I think he (like meredith whitney) has come to a point that he has no room for error; “career risk” i’d call it. why people pay you $$$ for 30 min speech if you are “wrong”?
Exactly. Great comment.
I also know that a lot of us truth-seekers like Nouriel because he was the anti-bull guy we could easily see. On some level, he was a face for something many people knew was brewing — and we liked seeing someone from our team with a megaphone. However, with that said, the people with blind support for Roubini have 1) obviously never read his erudite papers, 2) are taking it personally, and 3) miss my main point that the guy simply does not deserve to take all the credit and say he correctly called the crisis for the correct reasons.
I ask all the readers: if two guys tell you it will rain in the future, and one says it will rain because at some point the cloud droplets will accumulate and fall, while the other person says it’s the rain gods, which do you honor after the rain? In our case, we are giving the 1st Place Ribbon to the guy who clearly came in second place. That is my issue.
And for those who simply cannot let go of their dear Nouriel, I promise to replace him with the hard-working people who called the crisis for the correct reasons. Trust me — your portfolio will be much happier (unless you were happy to sit out the 50% S&P rally) …
A guy who called the housing bubble itself very early, and not randomly (instead based his argument on fundamentals) was Dean Baker at CEPR.
Thanks for the value add to the conversation.
Please, please, show, print the “laundry list” of Wall Street carlatans. I am waiting for your reply.
Madoff, Allen Stanford, Dick Fuld, the Enron crew, the AIG CDS guys, the WorldCom team, all the ibankers who abetted the crimes, etc.
There are plenty of books on these guys. I’m more interested in setting the stage to promote the good guys …
Roubini made his bones with a catchy article in 2/08, “13 Steps To A Systemic Crisis.” He “nailed” every progression of the meltdown that was to start just a few months later. No “expert” to that date was able to pull it all together into a coherent whole like 13 Steps. The story was picked up everywhere, most importantly on the Mauldin blog, which has a million readers. From there the MS press got it. 13 Steps kept a lot of people from being badly damaged. Roubini may not be the guy who got there firstest, but he got there with the mostest. Cut him a LOT more slack.
Eric, as I said to another person in these comments, I am happy for anyone who got out of the market because of Roubini. However, that’s not the issue at hand. There are a ton of people who got rich from Jim Cramer, but that doesn’t make him the best bull analyst — the Barron’s article about him goes over the stats.
The Roubini article in 2/08 is very late when compared to others who were already screaming fire in the CDO markets. My contacts at top global hedge funds were already long into the unwinding process by that point. For Roubini to have warned about anything at that time is nothing to write home about. Yes, on Wall Street there are not many bears, so Roubini was at least offering a warning counter to the MSM. But insofar as branding himself the prophet or doctor of doom, it’s disingenuous. For the NY Times to give him credit as the face of nailing the crisis is worse …
Jim Willie saw it all in 2003 at least. Other Gold-Bugs saw it as well. I’m glad that a few university professors came out with some real facts and took a chance with their job. I can’t believe that all those professors and trained economists didn’t see things coming. They either intentionally kept their eyes closed, or were brain dead from the Chicago virus, under the spell of Greenspan’s delusion, or just didn’t care.
Or all of the above.
so a wannabe journalist with a law degree is going to use his pen and financial acumen to save us all going forward…yippee
Thanks, Mr. Broker-Dealer. And, for the record, I have ibanking experience and worked on Wall Street. Sorry you don’t find it helpful that I’m exposing some of the BS going on. If an uneducated homeless person provides facts, they are still facts. I guess I should strive for a more noble career … Thanks for the blanket judgment. Your comment has nothing to do with the article. It is just a personal attack on me — who you don’t know. Your thoughts have been noted in the great ether …
Roubini is focused on the economy, he is not a stock market forecaster. Many people believe the stock market is the measuring rod of the economic strength. Bear market rallies such as we are in now suggests the stock market is a lousy measuring rod. Roubini may have missed the recent 50% rally but his advice also got you out of the stock market before it plunged 50%. It takes a 200% rally to overcome a 50% drop. That’s if people sell before market lows are revisited. What gets me is why nitpick Roubini when so many so-called experts and all of CNBC were very bullish at the top and very bearish at the bottom? Again, Roubini is doing his best to educate people that our economic problems are not over despite what the stock market might believe. The only one who might have a gripe would be someone who ignored Roubini before the big drop then exited at the bottom and missed this bear market rally. Is that really Nouriel’s fault? If you listened to him from the start you would be way ahead of most. Again, why pick on one of the very few who got it right when it counted the most?
I have been very critical of the permabulls too. (In January 2008 I wrote an article “KudSiegStein: The Bagholder Bulls“.)
The thesis is to remind people to stop following so-called pundits who can’t corroborate their claims with causation-based data. Otherwise, it’s simply an illusion: they are simply riding the tide yet calling themselves the moon. This is the case when Cramer makes people rich on the way up and Roubini on the way down.
As I have noted in several other comments, I am using Roubini as an example. I am also glad people got out of the market if Roubini caused them too. However, Roubini is a serial flip-flopper who holds himself out as “nailing” the crisis. It’s simply disingenuous, and I don’t care if he’s a bull or a bear. I have an entire folder FULL of emails from people sending me crap Roubini said over the years and he was completely wrong. Once I have time, I will write another post so we can further see why the only profits we should worry about are the ones our investments yield …
One thing Roubini had that most other economic analysts didn’t have then…credibility. Most of the analysts you heard SCREAMED about how things were fine and dandy. You had some analysts touting Lehman Bro right before it collapsed.
Wall St and the financial world in general was full of horseshit.
Roubini…wasn’t.
Ron,
I respectfully disagree. Please read all Roubini’s works as cited in the Bibliography. Roubini is the bearish Jim Cramer.
This is not about other analysts. Yes. They suck too. It’s about giving undo credit to someone who has a horrible trackrecord. These are the facts. They speak for themselves.
My goal is to save people at home from investing when they hear a “prophet” is talking. Clearly, unless you caught Roubini at the right moment, you would have made some awful investments. Watch the video. Read all the cited material. I provided links because it’s a very REAL criticism.
It’s hard to let go of people we look up to. Here are some substitutes who deserve the spotlight:
Josh Rosner
http://wallstcheatsheet.com/knowledge/medal-of-honor-top-analyst-josh-rosner-nailed-the-crisis/?p=1959/
Chris Whalen
http://wallstcheatsheet.com/knowledge/medal-of-honor-banking-analyst-chris-whalen-best-at-breaking-down-banks/?p=2549/
“Roubini still solely focused on foreigners diversifying out of US Treasury debt and further incorrectly predicted that “our current patterns of spending above our incomes” would cause a crisis by 2013.”
So its 2013 now?
Wow how time flies when you are reading some idiotic buullshiit.
Lets see where we are with the debt frenzy in 2013 before we accuse the guy of making incorrect predictions, shall we
Fair enough. But let’s be harsh for ALL his predictions that have been incredibly wrong.
You may find interesting another review on Construction of Social Reality by John Searle
http://sensit.wordpress.com/2009/12/04/construction-of-social-reality-by-john-searle/
Lakers will piss on Miami straight up, they can not even beat bulls and celtics regularly, Now Kobe gets to Kill Three Birds with one stone and place Lebron, Wade, & Bosh’s Scalps on his belt