More by the Same Author
2013-04-29 The Trapdoors at the Fed's Exit by Nouriel Roubini of Project Syndicate
It may be too soon to say that many risky assets have reached bubble levels, and that leverage and risk-taking in financial markets is becoming excessive. But the reality is that credit and asset/equity bubbles are likely to form in the next two years, owing to loose US monetary policy.
2013-04-01 The Global Economy on the Fly by Nouriel Roubini of Project Syndicate
In a fragile global environment, has America become a beacon of hope? While the US is experiencing several positive economic trends, Europe continues to stagnate, and China will be vulnerable to a hard landing in 2014 unless its new leaders accelerate the pace of reform.
2013-03-01 Ten QE Questions by Nouriel Roubini of Project Syndicate
Most observers regard unconventional monetary policies such as quantitative easing as necessary to jump-start growth in today's anemic economies. But questions about the effectiveness and risks of such policies have begun to multiply as well.
2013-01-22 The Economic Fundamentals of 2013 by Nouriel Roubini of Project Syndicate
The global economy this year will exhibit some similarities with conditions prevailing in 2012 no surprise there. But there will be some important differences, as fiscal austerity spreads to more advanced economies, the risk of a hard landing in China rises, and the threat of war in the Middle East grows.
2012-12-17 The Eurozone's Delayed Reckoning by Nouriel Roubini of Project Syndicate
The tail risks of a Greek exit from the eurozone or a massive loss of market access in Italy and Spain have been reduced for 2013. But the fundamental crisis of the eurozone has not been resolved, and another year of muddling through could revive these risks in a more virulent form in 2014 and beyond.
2012-11-19 The Year of Betting Conservatively by Nouriel Roubini of Project Syndicate
As consumers, firms, and investors become more cautious and risk-averse, the equity-market rally of the second half of 2012 has crested. And, given the seriousness of the downside risks to growth, the correction could be a bellwether of worse to come for the global economy and financial markets in 2013.
2012-10-12 Hard to be Easing by Nouriel Roubini of Project Syndicate
The US Federal Reserves third round of quantitative easing, or QE3, has many observers arguing that the effects on risky assets could be greater than in previous rounds. But, despite the Feds commitment to aggressive monetary easing, QE3's effects on the real economy and on US equities could well be smaller and more fleeting.
2012-09-13 Fiddling at the Fire by Nouriel Roubini of Project Syndicate
Worldwide, political leaders are putting off the economic reforms needed to avoid a painful, if not catastrophic, endgame. But, as everyone kicks the can down the road, the can is getting heavier and, in the major emerging markets and advanced economies alike, is quickly approaching a brick wall.
2012-08-23 Early Retirement for the Eurozone? by Nouriel Roubini of Project Syndicate
Germany and the ECB are now relying on the hope that large-scale liquidity will buy time to allow the adjustments needed to restore growth and debt sustainability in the eurozone periphery. But, if a eurozone breakup can only be postponed, delaying the inevitable would merely make the endgame worse much worse.
2012-08-15 Early Retirement for the Eurozone? by Nouriel Roubini of Project Syndicate
Whether the eurozone is viable or not remains an open question. But what if a breakup can only be postponed, not avoided? If so, delaying the inevitable would merely make the endgame worse much worse.
2012-07-20 American Pie in the Sky by Nouriel Roubini of Project Syndicate
For the last three years, the consensus has been that the US economy was on the verge of a robust and self-sustaining recovery that would restore above-potential growth. That turned out to be wrong, as a painful process of balance-sheet deleveraging implies that the recovery will remain, at best, below-trend for many years to come.
2012-06-15 A Global Perfect Storm by Nouriel Roubini of Project Syndicate
Dark, lowering financial and economic clouds are, it seems, rolling in from every direction: the eurozone, the United States, China, and elsewhere. Indeed, the global economy in 2013 could be a very difficult environment in which to find shelter. For starters, the eurozone crisis is worsening, as the euro remains too strong, front-loaded fiscal austerity deepens recession in many member countries, and a credit crunch in the periphery and high oil prices undermine prospects of recovery.
2012-05-17 Greece Must Exit by Nouriel Roubini of Project Syndicate
The Greek euro tragedy is reaching its final act: it is clear that either this year or next, Greece is highly likely to default on its debt and exit the eurozone.Like a doomed marriage, it is better to have rules for the inevitable breakup that make separation less costly to both sides.
2012-04-13 Europes Short Vacation by Nouriel Roubini of Project Syndicate
The honeymoon for the ECB's new president Mario Draghi has turned out to be brief. The trouble is that the eurozone has an austerity strategy, but no growth strategy and, without that, all it really has is a recession strategy that makes austerity self-defeating, because, if output continues to contract, deficit and debt ratios will continue to rise to unsustainable levels.
2012-03-15 Scary Oil by Nouriel Roubini of Project Syndicate
Todays fragile global economy faces many risks: the risk of another flare-up of the eurozone crisis; the risk of a worse-than-expected slowdown in China; and the risk that the US economy's recovery fizzles (again). But no risk is more serious than that posed by a further spike in oil prices.
2012-02-16 The Upticks Downside by Nouriel Roubini of Project Syndicate
Since late last year, a series of positive developments has boosted investor confidence and led to a sharp rally in risky assets, starting with global equities and commodities. But at least four downside risks are likely to materialize this year, undermining global growth and negatively affecting investor confidence and market valuations of risky assets.
2012-01-12 The Straits of America by Nouriel Roubini of Project Syndicate
Macroeconomic indicators for the US have been better than expected for the last few months. But, despite the favorable data, US economic growth will remain weak and below trend throughout 2012.
2011-12-15 Fragile and Unbalanced in 2012 by Nouriel Roubini of Project Syndicate
The outlook for the global economy in 2012 is clear, but it isnt pretty: recession in Europe, anemic growth at best in the US, and a sharp slowdown in China and in most emerging-market economies. Restoring robust growth is difficult enough without the ever-present specter of deleveraging and a severe shortage of policy ammunition.
2011-11-11 Down with the Eurozone by Nouriel Roubini of Project Syndicate
The eurozone crisis seems to be reaching its climax, with Greece on the verge of default and an inglorious exit from the monetary union, and now Italy on the verge of losing market access. But the eurozone's problems are much deeper. They are structural, and they severely affect at least four other economies: Ireland, Portugal, Cyprus, and Spain. With Italy too big to fail, too big to save, the endgame for the eurozone has begun. Sequential, coercive restructurings of debt will come first, and then exits from the monetary union that will eventually lead to disintegration.
2011-10-13 The Instability of Inequality by Nouriel Roubini of Project Syndicate
This year has witnessed a global wave of social and political turmoil and instability, with masses of people pouring into the real and virtual streets. While these have no unified theme, they express in different ways the serious concerns of the worlds working and middle classes about their prospects in the face of the growing concentration of power among economic, financial, and political elites. Any economic model that does not properly address inequality will eventually face a crisis of legitimacy.
2011-09-19 How to Prevent a Depression by Nouriel Roubini of Project Syndicate
The latest economic data suggests that recession is returning to most advanced economies, with financial markets now reaching levels of stress unseen since the collapse of Lehman Brothers. The risks of an economic and financial crisis even worse than the previous one-now involving not just the private sector, but also near-insolvent sovereigns-are significant. So, what can be done to minimize the fallout of another economic contraction and prevent a depression and financial meltdown? The best way to avoid the risk of repeating such a sequence is bold and aggressive global policy action now.
2011-08-15 Is Capitalism Doomed? by Nouriel Roubini of Project Syndicate
The massive volatility and sharp equity-price correction now hitting global financial markets signal that most advanced economies are on the brink of a double-dip recession. A financial and economic crisis caused by too much private-sector debt and leverage led to a massive re-leveraging of the public sector in order to prevent Great Depression 2.0. But the subsequent recovery has been anemic and sub-par in most advanced economies given painful deleveraging.
2011-07-18 The Eurozone’s Last Stand by Nouriel Roubini of Project Syndicate
The eurozone crisis is reaching its climax. Greece is insolvent. Portugal and Ireland have recently seen their bonds downgraded to junk status. Spain could still lose market access as political uncertainty adds to its fiscal and financial woes. Financial pressure on Italy is now mounting. By 2012, Greek public debt will be above 160% of GDP and rising. Alternatives to a debt restructuring are fast disappearing. A full-blown official bailout of Greece’s public sector would be the mother of all moral-hazard plays: extremely expensive and politically near-impossible.
2011-01-12 Malaysia's Middle-Income Malaise by Nouriel Roubini of Roubini Global Economics
Malaysia’s policy makers have been forced to confront the factors blocking the country’s rise to high-income status. Facing higher labor costs, the economy has been unable to maintain a growth model based on low-value-added manufacturing that was largely successful for the 30 years prior to the 1997 Asian financial crisis.
2011-01-05 Things Are Looking Up in LatAm by Nouriel Roubini of Roubini Global Economics
In our 2011 Outlook, we revised up our growth forecasts for Latin America, in anticipation of resilient domestic demand, improved external conditions and elevated commodity prices. We now envision annual growth rates of 4.7% in 2011 (compared to the forecast of 4.1% we set in September) and 6.1% in 2010 from 5.7% previously. If we are correct, 2010 will mark Latin America’s strongest economic performance of the last decade and its fastest growth since 1980.
2010-12-29 Policy Cures for China’s Post-Stimulus Hangover by Nouriel Roubini of Roubini Global Economics
Though Chinese policy makers will spend most of 2011 cleaning up after the effects of their fiscal stimulus measures and loose monetary policies, all the while they will be laying the foundation for financial reforms that will lead to increased use of price controls in lending decisions, further internationalization of the RMB and eventually the opening of the capital account.
2010-12-22 Will Egyptian Elections Scare Would-Be Investors? by Nouriel Roubini of Roubini Global Economics
In Egypt, although the National Democratic Party (NDP) has a solid grip on power, the election cycle is adding to policy uncertainty that could worsen prospects for the foreign investment needed to kick-start domestic investment and diversify growth away from consumption. As RGE notes in its 2011 Global Economic Outlook, policy implementation delays in Egypt could add market volatility and restrain inward FDI as investors monitor the country’s political risk.
2010-12-15 Assessing the Next North Korean Flare-Up by Nouriel Roubini of Roubini Global Economics
Claiming insight into what Pyongyang will do next is self-delusion. Judging from recent revelations by WikiLeaks, this frustration and confusion goes right up to the highest levels in China and the U.S., leaving their respective intelligence agencies to make educated guesses. The current heightened tensions between North and South Korea are unlikely to erupt into an all-out military confrontation, given the inherent human and economic costs as well as the shared interest of China and South Korea in avoiding a collapse of the North’s dictatorial regime.
2010-12-08 No Comfort in November for U.S. Employment by Nouriel Roubini of Roubini Global Economics
November data clearly calls for caution. The stall in the improvement in wages and the average workweek is especially concerning. Sustainable growth in aggregate consumption will be driven by wage growth, which needs to improve from its severely depressed levels. Most importantly, it is quite clear that future employment gains will be well below the levels required to make a meaningful dent in the unemployment rate, which will continue to be just shy of double-digit territory for some time.
2010-12-01 A Spanish Inquisition by Nouriel Roubini of Roubini Global Economics
Spain shares some of Ireland's key vulnerabilities, including a housing bubble more pronounced than that in the United States and large nonperforming loan overhang in the banking sector. Though Spain's housing bubble is less severe than Ireland's, and though the Spanish banks' commendable loan-loss provisioning system is providing a buffer, a comparison of price-to-rent ratios shows that the bulk of the housing price correction and loss recognition has not yet come. Thus, the pressure on the banking system is bound to increase going forward.
2010-11-24 Rescuing the Emerald Isle: A Q&A on the Irish Debt Crisis by Nouriel Roubini of Roubini Global Economics
RGE considers the extent of public and bank debt held by non-residents, as well as the external balance sheet of other sectors of the Irish economy, as these factors will influence negotiations and the ultimate burden sharing between domestic and foreign creditors.
2010-11-17 Shifting Politics, Tightening Policies in China by Nouriel Roubini of Roubini Global Economics
The Central Economic Work Conference in early December should signal an end to the 'moderately loose' monetary policy that has allowed the long cycle to dominate the short since late 2008. There will likely be little commentary about renminbi (RMB) flexibility at the conference; nevertheless, we expect that technocratic control of China's monetary policy should marginally increase the rate of RMB appreciation against the USD.
2010-11-10 Will GOP Gains Mean Ethanol Producer Losses? by Nouriel Roubini of Roubini Global Economics
Following the Republican Party’s capture of the House of Representatives in the midterm elections, U.S. policy on the use of biofuels for transportation could be about to change. Current policy is based on the use of "blender credits" to encourage the mixing of biofuels with gasoline and a US$0.54/gallon tariff levied on imports of ethanol, the most widely used biofuel. These policies are due to expire at the end of this year, and Republican deficit hawks do not want them renewed, though the ethanol industry generated US$2 billion-3 billion in tax revenues (net of subsidies) in 2009.
2010-11-03 Uncertainty Now, Stability Later for Argentina by Nouriel Roubini of Roubini Global Economics
The sudden death of former president Nestor Kirchner, widely considered Argentina's most powerful politician, has called into question the sustainability of the current administration's mandate. In the short term, Kirchner's death will fuel political uncertainty, especially regarding who will represent the Peronist Party in next October's presidential elections. In the medium term, however, the death of the man widely thought to be the power behind the current president - his wife Cristina Fernandez de Kirchner - opens the door to greater political stability.
2010-10-27 What's Ahead for the Fed? by Nouriel Roubini of Roubini Global Economics
Fiscal stimulus and the effects of the inventory-restocking cycle in 2010 will not only fade by next year, but will become a drag on growth. House prices are projected to correct downward in 2011, and consumer spending will remain anemic as consumers continue the process of deleveraging and repairing their balance sheets and the slack in the labor market depresses growth in wages. These factors point to slow growth and easing inflation in 2011.
2010-10-20 The Fed Debates: Is Unemployment Structural or Cyclical? by Nouriel Roubini of Roubini Global Economics
Federal Reserve Chairman Ben Bernanke weighed in on the unemployment debate in an October 15 speech, stating that the current elevated jobless rates are probably due more to the continued shortfalls in aggregate demand than structural reallocation of workers across industries and regions. With this pronouncement, along with the FOMC's reiteration that it will continue its efforts to return inflation to levels consistent with its mandate, Bernanke underscored the Fed's belief in additional monetary accommodation, and raised expectations for Fed actions as early as November.
2010-10-13 Currency Wars Heat Up as Growth Chills by Nouriel Roubini of Roubini Global Economics
As global growth stagnates, governments are increasingly focusing on monetary policy as a last resort to prop up ailing economies. The U.S. Federal Reserve recently signaled that it will refocus away from eventual exit strategies and toward the possibility of further intervention in the ailing U.S. economy. Between the Fed's second round of quantitative easing, the European Central Bank's stubbornness, and a new round of currency wars as countries fight each other for export growth, the path out of the recession remains unclear.
2010-10-06 Discounting China's Demographic Dividend by Nouriel Roubini of Roubini Global Economics
China's population will reach an inflection point in 2011: The increase in the number of retirees will start to outpace the growth of the labor pool. Roubini Global Economics projects that the rising cost of labor should translate into a higher Chinese inflation rate of 4 percent, which in turn will push up the cost of capital. As investment gradually decelerates, China's GDP growth rate should decline by about two percentage points over the next five years, with potential growth down to about 8 percent in 2015.
2010-09-29 Multiple Risks From a Multispeed Eurozone Recovery by Nouriel Roubini of Roubini Global Economics
Although the euro zone's recovery from recession has been better than initially envisaged, there are still external and domestic pressures - some persistent, some new - as potential threats to 2011 growth. The standout performance of the core and Northern European economies, particularly Germany, alongside renewed weakness in the periphery is giving rise to a multi-speed recovery. This adds a new set of risks - such as the implications of one-size-fits-all monetary policy - to the existing list.
2010-09-22 Too Soon to Call for Asian Decoupling by Nouriel Roubini of Roubini Global Economics
Even without a double-dip, weak U.S. and EU recoveries will cause export-dependent Asian economies to grow below their 2003-07 trends in the coming years. Nonetheless, widening growth differentials with the G7 countries and healthy public- and private-sector balance sheets - along with rising incomes and expanding middle classes - will drive economic growth and foreign investment in Asia and increase intra-Asia and EM trade and investment.
2010-09-15 A Balancing Act For the Bank of Canada by Nouriel Roubini of Roubini Global Economics
The Bank of Canada adopted a hawkish tone at its September 8 policy meeting, despite signs of slowing growth. Less need for balance sheet repair should indeed allow Canada to continue to outgrow most of the G7. The country cannot decouple from U.S. growth, however, in part because most Canadian exports are U.S.-bound. These dynamics and a moderate core inflation rate call for the Bank of Canada to maintain the current, accommodative interest rates for the rest of 2010, despite its concerns about excessive debt practices.
2010-09-08 Brazil's Economy Exhales by Nouriel Roubini of Roubini Global Economics
Brazil's cooling economic growth in the second quarter resulted from the withdrawal of excess accommodation, a less benign global backdrop and a high base. Looking into the second half 2010, the country's growth could temper further if July's industrial output figures and the purchasing managers' index for August are any indication. Although demand drivers such as labor conditions, credit and consumer confidence remain resilient, they are easing, which suggests economic activity will keep settling into more sustainable levels.
2010-09-01 No Chance of a V-Shaped Recovery by Nouriel Roubini of RGE Monitor
Given political and fiscal constraints and banks' unwillingness to lend, it is doubtful that policy can prevent a double-dip. Even if a new round of monetary and quantitative easing can provide limited stimulus, the real issue facing the U.S. is the need for balance sheet deleveraging and repair, and that will be a multi-year process. The U.S. must brace itself for a long period of below-potential growth.
2010-08-25 Mind the (Current Account) Gap by Nouriel Roubini of RGE Monitor
Turkey's current account deficit is unlikely to show a sustainable decrease without significant reforms. This means country needs to keep attracting sufficient capital flows from abroad to finance the shortfall. Increasing short-term capital flows, however, are raising Turkey's vulnerability to sudden shifts in global risk appetite. The danger is that an increase in risk aversion could place upward pressure on interest rates to attract the necessary external financing.
2010-08-18 FOMC Warms Up the Helicopter by Nouriel Roubini of RGE Monitor
The Fed has been laying the verbal groundwork for further monetary stimulus. The August 10 announcement by the Federal Open Market Committee appears to be another signal of a gradual policy shift. On its own, the latest move is likely to have limited implications for the broader economy. More importantly, however, the decision to reinvest the repayments in Treasury bonds reflects the preference many FOMC members have expressed for an expeditious return to the Fed's traditional Treasury security-only portfolio.
2010-08-11 The Sick Man is Europe by Nouriel Roubini of RGE Monitor
Something other than leaves will fall in Europe this autumn. American attention, no doubt, will focus on Barack Obama's date with an angry electorate this November. Yet across the pond, governments of the right, left and center in Europe appear ready to crumble, their positions eroded by a wave of austerity and high unemployment and government debt, plus a smattering of nasty corruption scandals.
2010-08-04 How the Other Half Looks by Nouriel Roubini of RGE Monitor
The global adjustment process has been delayed. In order to support growth and income generation, the over-saving investment- and export-driven nations - China, emerging Asia, Germany and Japan - continue to look to the overspending countries following an Anglo-Saxon model. There is a risk of a weak recovery of global aggregate demand relative to supply, which could contribute to deflationary pressures. As such, the recovery will continue to be multi-speed and rocky, exit strategies will remain uncoordinated and the risk of policy gridlock is high.
2010-07-28 Still Stressed After Tests by Nouriel Roubini of RGE Monitor
According to the Committee of European Bank Supervisors, only seven of the continent's banks failed to pass muster out of the 91 assessed in recent stress tests. These tests contained a crucial flaw, however: the absence of a sovereign default scenario. Optimistic commentators point to the rebound in U.S. markets after the Supervisory Capital Assessment Program, which faced significant criticism, as Europe's equivalent is now. However, while the U.S. SCAP tests modeled the key concern of the market - future property risk - and forced banks to recapitalize, the European tests did neither.
2010-07-21 No Golden Ticket by Nouriel Roubini of RGE Monitor
Why aren't we giddy about gold? In the abstract, gold is most attractive as a hedge in one of three extreme scenarios: high inflation, persistent deflation, or when the risk of global financial meltdown is large. Once national balance sheets are repaired through a protracted and gradual deleveraging of households and governments following the relatively rapid deleveraging of the financial sectors, particularly in the United States, excessive deflation and inflation fears will subside.
2010-07-15 Emerging Asia's On/Off Switch by Nouriel Roubini of RGE Monitor
In 2009 and the first half of 2010, low interest rates and an uncertain global outlook led to strong, volatile capital inflows into some of Asia's most promising economies. Policymakers in these places - which include, among others, Hong Kong, Taiwan, Singapore, South Korea, Indonesia and India - need to tighten monetary policy sooner rather than later. New inflows from the rest of the world might prove problematic, but at present low or negative real interest rates seem to be fueling speculative investment by domestic players, and that too is a dangerous dynamic.
2010-07-07 Gloomy News on U.S. Employment by Nouriel Roubini of RGE Monitor
The most recent U.S. employment report was even worse than we thought it would be, less because headline employment retreated (this was expected due to Census layoffs) than because weekly hours worked, average hourly earnings, and private sector payroll gains all took a plunge. The second half of the year should bring even weaker growth as personal consumption growth aligns with income growth, inventory growth aligns with final sales (still a weak spot) and fiscal stimulus turns neutral or becomes a drag on growth.
2010-06-30 Will Debt Problems Metastasize to ‘Core’ European States? by Nouriel Roubini of RGE Monitor
One of the major issues is whether the problems of the PIIGS will metastasize from the eurozone periphery into the “core” countries of the continent. This commentary focuses specifically on Belgium, which has the third highest debt-to-GDP ratio in Europe. It is uncertain how Belgium’s necessary belt-tightening measures can be implemented, particularly given the dim prospects of a durable political consensus.
2010-06-23 What a Flexible Yuan Means for the Economy by Nouriel Roubini of RGE Monitor
Even if the Chinese authorities allow two-way movement of the yuan against the dollar to reduce speculation, Chinese policies could support the U.S. Treasury market, commodities and risky assets more generally - especially if other emerging market countries take a cue from China and allow only gradual depreciation. However, a sharp appreciation against the euro and dollar without other policies to support Chinese consumption could contribute to much slower global growth and higher inflation as increased Chinese production costs are transmitted to G10 consumers.
2010-06-16 The Economics of the World Cup by Nouriel Roubini of RGE Monitor
Although the short-term gains from hosting the World Cup are rather limited, if the event goes well and the country avoids labor strikes and other destabilizing events, it could provide a chance for South Africa to showcase its institutional development and help cement its longer-term recovery. There are, however, several structural challenges to overcome, such as limited access to services, transportation bottlenecks, worsening demographics and extensive inequality, which could hamper the country's potential output growth.
2010-06-09 Hungary Suffers from Foot-in-Mouth Syndrome by Nouriel Roubini of RGE Monitor
While Hungary may not be 'another Greece,' the country's government announced an economic action plan last week aimed at reining in public finances amidst growing investor concern. The plan includes a special bank tax, public sector spending cuts, a cut in the corporate tax rate, and a recommendation to ban foreign exchange-denominated mortgage lending. It's unclear, however, that this plan will be enough for Hungary to reduce its deficit to meet this year's 3.8 percent of GDP target agreed upon with the IMF.
2010-06-02 Whither the Regulatory Winds? by Nouriel Roubini of RGE Monitor
While reforms like eliminating the 'too-big-to-fail' card and adopting Glass-Steagall-like regulations to unbundle different types of financial activity are necessary to ward off asset bubbles and combat systemic risks, they might not be feasible for political reasons. In the event of a Glass-Steagall type separation, we would expect a divergence in credit spreads between banks with and without insured deposits, but expect the cost of credit for depository institutions to be very close to sovereign risk. On the flip side, dilution risk would be concentrated in depository institutions.
2010-05-26 Renewed Risks and Multi-Speed Global Recovery to Restrain World Trade Flows by Nouriel Roubini of RGE Monitor
Global trade growth is unlikely to reach its pre-recession highs in the short term, with exports of several trade-dependent economies, particularly emerging markets, growing at a slower pace due to weaker import demand in the U.S. and EU amidst consumer deleveraging, fiscal austerity and slow recoveries in labor markets and household wealth. In the medium term, however, structural reforms in emerging markets and surplus countries to increase domestic demand will boost trade among emerging markets, as well as global trade flows, changing their direction and composition.
2010-05-19 Currency Considerations at the U.S.-China Summit by Nouriel Roubini of RGE Monitor
The U.S.-China Strategic and Economic Dialogue will recommence in Beijing on May 24, 2010. Behind closed doors, Chinese leaders will repeat their complaints about the U.S. dollar's role as a reserve currency and their concerns about the safety of their massive $1 trillion U.S. Treasury holdings given the eroding U.S. fiscal position. Meanwhile, the U.S. will struggle to prove it has a workable long-term plan to reduce the fiscal deficit. These constraints will soften the U.S. approach to the renmibi.
2010-05-12 Has the EMU Skirted Disaster? by Nouriel Roubini of RGE Monitor
Although many operational questions remain unanswered, the €750 billion headline number for this week's euro area stabilization mechanism - in addition to the European Central Bank liquidity facilities and quantitative easing - should help fight contagion. It is now up to euro area periphery countries to fulfill the fiscal consolidation requirements. In addition, the relatively high interest rates on joint loans should serve as an incentive for euro area members to put their fiscal houses in order without recurring to the facility.
2010-05-05 Greek Contagion Spreads—Time for Plan B by Nouriel Roubini of RGE Monitor
The euro continued to plunge this week, and long-term government bond yields in Greece and in the periphery countries, including Italy, spiked upward again after a short rally before the recent International Monetary Fund-European Union rescue agreement. The market’s lukewarm reaction to the financing package confirms RGE’s view that a traditional financing package, extended at unsustainable interest rates, will not allay solvency fears, but rather will lead to a disorderly outcome and contagion.
2010-04-28 Focusing in on Latin America by Nouriel Roubini of RGE Monitor
Latin American economies will expand in 2010 after contracting more than 2 percent in 2009. Better global growth prospects and solid commodity prices will support growth in the region. Inflation will grow, but will remain within central bank target ranges, except in Mexico. Current account deficits will widen and surpluses will narrow as growth in domestic demand outpaces external demand. Wider growth and interest rate differentials, as well as a relatively weak U.S. dollar and solid commodity prices, will continue to support currencies.
2010-04-21 Reading the Tea Leaves for Q2 and Beyond by Nouriel Roubini of RGE Monitor
While the second half of 2009 brought signs of stabilization in growth rates and industrial production for many economies and early 2010 has brought continuing strong global trade and improvement in output, the path to a self-sustaining recovery is not yet clearly shaped, at least in advanced economies. The recovery will be multi-speed. Most advanced economies, weighed down by debt, excess capacity and slack in labor markets will grow well below potential and in many cases, their potential output growth has fallen.
2010-04-14 What are the Political Implications of Poland's Tragedy? by Nouriel Roubini of RGE Monitor
The April 10 plane crash that killed Polish president Lech Kaczynski and a number of other top public figures, including the head of Poland's central bank, has caused major distress in the Polish political landscape. However, the country's constitutional mechanisms should facilitate a smooth institutional transition and ensure long-term stability. The event is unlikely to cause major geopolitical tensions, and RGE thinks speculation in some media outlets about increased tension with Russia is overdone.
2010-04-07 Iraqi Oil: A Riddle in the Sands by Nouriel Roubini of RGE Monitor
Iraq has the potential to be a major source of new oil in the next 5 to 10 years, but the process of scaling up production faces many obstacles. Modernizing and expanding the country's energy infrastructure will be costly, given Iraq's fiscal position, and this may tempt the government to extract as much revenue as it can in order to meet the country's fiscal vulnerabilities. And as Iraq's oil production gradually climbs, it will face pressure from OPEC to adhere to quotas. Given these uncertainties, Iraq's plans to more than double output within 5 years seem very optimistic.
2010-03-31 The Perils of Name-Calling by Nouriel Roubini of RGE Monitor
In mid-April, the U.S. Treasury is expected to publish its biannual report on foreign currency arrangements, and there is a higher probability than ever before that China will be branded as a currency manipulator. Such a move could start a trade war and force Chinese officials to clam up even further on the currency issue while stubbornly maintaining the peg to save face. Things have gotten so bad, however, that even traditional supporters of free trade are now saying it is time to get tough with explicit threats of trade sanctions.
2010-03-24 No Greece in the American Machine by Nouriel Roubini of RGE Monitor
Sovereign debt risk recently graduated from an emerging economy hitch to an advanced economy problem. The Greek debt crisis occupies center stage of the political and economic debate, and Greece's problems could soon spread to Portugal, Spain, Italy and Ireland. Comparisons between these countries and troubled U.S. states are in vogue. Implicit and explicit backstopping from the federal government, however, should prevent state and municipal debt crises from reaching levels faced by European governments.
2010-03-17 U.S.-China Tensions: Codependency Pains by Nouriel Roubini of RGE Monitor
Tensions between the U.S. and China have become increasingly exposed in recent weeks, with rhetorical barbs exchanged over trade, exchange rates and various political and strategic issues. These tensions seem to stem from attempts by both powers to find a 'new normal' in political and economic relations following the financial crisis. RGE expects the two countries to avoid a full-blown confrontation, but uncertain tit-for-tat trade policies still threaten to constrain global growth.
2010-03-10 V, U and W by Nouriel Roubini of RGE Monitor
Debate continues to rage over whether the U.S. economy will have a V-shaped recovery with a rapid return to above-potential growth, a U-shaped recovery with below-trend growth for the next two years, or a W-shaped double-dip recession. Poor economic data released over the past two weeks suggests a U-shaped recovery at best. Consumer confidence, home sales, construction and employment suggest significant downside risk even to the current anemic levels of growth. The eurozone debt crisis, meanwhile, presents the risk of a double-dip recession in Europe that could also drag down the U.S.
2010-03-03 Will Silver Sparkle in 2010? by Nouriel Roubini of RGE Monitor
Silver may never reach the price level of gold, but silver could gain relative to gold in the short term. The price volatility of silver compared to gold opens up short-term opportunities for higher capital gains. Silver has wider industrial applications than gold, and is therefore better positioned to benefit from the recovery in global industrial production. In the long run, however, silver is 16 times more abundant than gold, and has enjoyed increased mining production since 1999, and so gold probably always remain more precious than silver.
2010-02-24 Still No Tightening in China by Nouriel Roubini of RGE Monitor
A credit-fueled investment boom propelled China's 8.7 percent growth rates in 2009, but cheap money also drove up asset prices, especially in property markets. Loose money may now become inflationary, particularly if China's potential growth rate has come down. China's monetary policy has shifted toward a neutral stance in recent months, but may tighten to contain inflation and the property bubble.
2010-02-17 The Greek Picture Complicates Further: Is the IMF the Solution? by Nouriel Roubini of Roubini Global Economics
A credible IMF program that combines financial support with the progressive achievement of fiscal and structural reform goals, though risky, may be the right solution to the Greek debt crisis. Such a program may also minimize the moral hazard presented by guaranteed loan programs.
2010-02-10 Global Trade in Recovery Mode by Nouriel Roubini of Roubini Global Economics
In an update to its Q1 2010 global economic outlook, Roubini Global Economics says that world trade will grow by between 4.5 percent and 5 percent in 2010, led by fiscal stimulus spending, inventory restocking and slight improvements to global demand. Global trade volumes shrunk by an estimated 13 percent in 2009 in the first decline since 1982 and the sharpest in the post-war period.
2010-02-03 Obama's Recent Regulatory and Fiscal Proposals by Nouriel Roubini of RGE Monitor
Roubini supports the Obama administration’s regulatory policies (e.g, the Volcker Rule) and says the proposed budget will lead to a “sluggish and jobless” recovery. “Obama simply lacks the political support to implement aggressive fiscal reforms,” he says, adding that Obama’s political capital is likely to deteriorate after the 2010 elections.
2010-01-20 Political Potholes for Europe's IMF Borrowers by Nouriel Roubini of RGE Monitor
Amid the global financial crisis, several European countries faced serious economic distress and turned to external creditors, including the EU and IMF, for emergency financing. This multilateral supp
2010-01-13 Sovereign Debt: The Developed World's Next Big Problem? by Nouriel Roubini of RGE Monitor
2010-01-06 The Carry Trade in 2010 by Nouriel Roubini of RGE Monitor
2009-12-30 10 for 2010 by Nouriel Roubini of RGE Monitor
2009-12-16 Deja Vu: Will the U.S. Undergo a Reprise of 1937? by Nouriel Roubini of RGE Monitor
2009-12-09 The Economics of Copenhagen by Nouriel Roubini of RGE Monitor
2009-12-02 After Dubai by Nouriel Roubini of RGE Monitor
2009-11-25 Roubini Global Economics - Holiday Season Kick-off by Nouriel Roubini of RGE Monitor
2009-11-18 Obama Tours Asia with a Full Agenda by Nouriel Roubini of RGE Monitor
2009-11-11 Monetary Policy Outlook by Nouriel Roubini of RGE Monitor
2009-11-04 Too-Big-To-Fail: Regulatory Reforms of Systemically Important Institutions by Nouriel Roubini of RGE Monitor
2009-10-28 Are Capital Controls in Fashion Again? by Nouriel Roubini of RGE Monitor
2009-10-21 Eastern Europe: Out of the Danger Zone? by Nouriel Roubini of RGE Monitor
2009-10-14 Latin America Economic Outlook by Nouriel Roubini of RGE Monitor
2009-10-07 Does Asia's Economic Rebound Signal the Return to Stellar Growth? by Nouriel Roubini of RGE Monitor
2009-09-30 For Obama's Diplomacy, the Going Gets Tough by Nouriel Roubini of RGE Monitor
2009-09-23 The G20’s Crowded Agenda by Nouriel Roubini of RGE Monitor
2009-09-15 Lehman Anniversary - What's Different? What's the Same? by Nouriel Roubini of RGE Monitor
2009-09-09 Is Resource Nationalism Back? by Nouriel Roubini of RGE Monitor
2009-09-02 Q2 Performance in Western Europe by Nouriel Roubini of RGE Monitor
2009-08-26 The China Effect by Nouriel Roubini of RGE Monitor
2009-08-19 U.S. Economic Outlook Update: Stop Asking When the Recession Will End by Nouriel Roubini of RGE Monitor
2009-08-12 Credit Markets Update: Fundamentals Driven or Too Much Liquidity? by Nouriel Roubini of RGE Monitor
2009-08-05 Are There Bright Spots Amid the Global Recession? by Nouriel Roubini of RGE Monitor
2009-07-29 Europe Economic Outlook by Nouriel Roubini of RGE Monitor
2009-07-22 Can Japan Avoid Another Lost Decade? by Nouriel Roubini of RGE Monitor
2009-07-16 Statement on U.S. Economic Outlook by Dr. Nouriel Roubini by Nouriel Roubini of RGE Monitor
2009-07-15 China Economic Outlook by Nouriel Roubini of RGE Monitor
2009-07-08 U.S. Economic Outlook: Q2 2009 Update by Nouriel Roubini of RGE Monitor
2009-07-01 Will the Global Warming Bill Cool the Global Economy? by Nouriel Roubini of RGE Monitor
2009-06-24 Regulatory Reforms in G7 Financial Centers by Nouriel Roubini of RGE Monitor
2009-06-17 BRICs in the Monitor by Nouriel Roubini of RGE Monitor
2009-06-10 Is Eastern Europe on the Brink of an Asia-Style Crisis? by Nouriel Roubini of RGE Monitor
2009-06-03 Assessing Obama’s ‘Smart Power’ Approach to Foreign Policy Making by Nouriel Roubini of RGE Monitor
2009-05-27 The State of Real Estate Around the World: No Signs of Stabilization? by Nouriel Roubini of RGE Monitor
2009-05-20 Are Commodity Prices Getting Ahead of Fundamentals? by Nouriel Roubini of RGE Monitor
2009-05-13 Green Shoots or Yellow Weeds? by Nouriel Roubini of RGE Monitor
2009-05-06 The Impact of the Chrysler Bankruptcy by Nouriel Roubini of RGE Monitor
2009-04-29 Navigating Towards Bretton Woods 3? by Nouriel Roubini of RGE Monitor
2009-04-22 2009 Global Economic Outlook (Q1 update) by Nouriel Roubini of RGE Monitor
2009-04-15 Banks in the Spotlight by Nouriel Roubini of RGE Monitor
2009-04-08 China’s Economy in 2009 and Beyond by Nouriel Roubini of RGE Monitor
2009-04-01 Focus on the G20 by Nouriel Roubini of RGE Monitor
2009-03-25 The Public-Private Partnership Investment Program (PPIP) - Will It Work? by Nouriel Roubini of RGE Monitor
2009-03-18 Reversal of Capital Flows in the Emerging World by Nouriel Roubini of RGE Monitor
2009-03-11 2009 U.S. Economic Outlook: Q1 2009 Update by Nouriel Roubini of RGE Monitor
2009-03-09 Stock Market To Go Much Lower by Nouriel Roubini of RGE Monitor
2009-03-04 The Re-Emergence of Global Protectionism: A Newer Version of Smoot-Hawley? by Nouriel Roubini of RGE Monitor
2009-02-25 Eastern European Tinderbox: How Explosive Could It Get? by Nouriel Roubini of RGE Monitor
2009-02-18 Meeting the U.S. Financing Needs by Nouriel Roubini of RGE Monitor
2009-02-11 Treasury's Financial Stability Plan: Will It Work? by Nouriel Roubini of RGE Monitor
2009-02-04 Vulnerabilities in the Emerging World by Nouriel Roubini of RGE Monitor
2009-01-28 Davos Debate: Reshaping the Future of the Global Financial System by Nouriel Roubini of RGE Monitor
2009-01-21 Obama's Presidential Honeymoon Faces Daunting Economic and Geo-Political Tasks by Nouriel Roubini of RGE Monitor
2009-01-14 Navigating the First Global Economic Recession by Nouriel Roubini of RGE Monitor
2009-01-07 2009 U.S. Economic Outlook by Nouriel Roubini of RGE Monitor
2008-12-31 What are the Key Questions for 2009? by Nouriel Roubini of RGE Monitor
2008-12-17 Focus on Currencies by Nouriel Roubini of RGE Monitor
2008-12-10 Will Aggressive Monetary and Fiscal Measures Prevent Stag-deflation in 2009? by Nouriel Roubini of RGE Monitor
2008-12-03 A Wakeup Call for the New Foreign Policy Team? by Nouriel Roubini of RGE Monitor
2008-11-26 Focus on the US Economy by Nouriel Roubini of RGE Monitor
2008-11-19 Commodity Headwinds by Nouriel Roubini of RGE Monitor
2008-11-12 Roadmap for the G20 by Nouriel Roubini of RGE Monitor
2008-11-05 Barack Obama, the 44th President of the United States by Nouriel Roubini of RGE Monitor
2008-10-29 Global Stag-Deflation in Sight by Nouriel Roubini of RGE Monitor
2008-10-22 Emerging Markets: Who is at Risk? by Nouriel Roubini of RGE Monitor
2008-10-16 Is the Worst Behind Us? by Nouriel Roubini of RGE Monitor
2008-10-10 The World is at Severe Risk of a Global Systemic Financial Meltdown by Nouriel Roubini of RGE Monitor
