Just spotted this excellent article via Trader's Narrative Blog (thanks Babak!). http://wallstcheatsheet.com/?p=1321 Is Nouriel Roubini a False Prophet? Written by Damien Hoffman Posted on 19 August 2009 Tags: Crisis, Dr. Doom, Economy, Nouriel Roubini 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 1âs and 0âs 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 âThe Prophet of Doom.â 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. Keep reading the article at http://wallstcheatsheet.com/?p=1321
Hmmm I remember when he was suggesting that we would have a sovereign default like the Ireland, the UK or even Switzerland. Still think he has a point that this is a crisis of solvency not liquidity, we shall see when they try to unwind the stimulus measures. If its liquidity everything will be just fine, if not and they do it too soon we take another dip, if they do it too late we go to roaring inflation.
Article now commented on Seeking Alpha http://seekingalpha.com/article/157456-roubini-not-exactly-a-prophet
I appreciate you posting that. I like to hear opposing points. I do believe the author falls into a common trap though. Trying to find a single cause which created a crisis. People always want to point to something and say it was because of that single event. It's not it's a combination of factors. What I am saying is that I don't fault Roubini for pointing out multiple causes but I do have a problem with him constantly adding " to the laundry list". Think about this for a moment. No one I have seen can predict the future with much certainty at all. Not on the markets, the economy, etc. But whether its 5 years later, Great Depression, or 5 bars later they can explain why it happened after the fact.