Over the last couple of years I have read Nouriel Roubini's blog off and on, currently on. If you saw him on Kudlow but don't read his blog you know that he is very bearish on the economy and is calling for a high likelihood for a severe recession, some measure of stagflation and that the Fed's next move will be to lower rates this coming fall or winter.
If you are going to read his blog, be prepared to roll up the sleeves there is a lot of meat on the bone.
In the post linked to above, my take is that he feels the Fed is slow to recognize the threat of recession with the immediacy that he sees. If they are behind the curve I'm not sure they would react to cut rates as soon as this fall and maybe not even this winter.
There are positives in the economy and while I don't think they outweigh the negatives, GDP could remain positive for the rest of the year if not a little longer (keep in mind I think there is visibility for a recession and have thought so for quite a while).
As for stagflation, it seems like he favors a "stagflation-lite" as having more probability than severe 1970's-like stagflation. He feels the trigger for a repeat of that last stagflation run could come about as a result of oil going much higher due to all the various current events impacting that market getting worse. Possible yes but not the most probable outcome.
The way his recent posts have hit on the term severe recession, I take it that is is more bearish than I am. I think his blog is important to read because it spells out a severely bearish scenario in a lot of detail. As I mentioned the other day it is not Ed Yardeni's forecast we need to worry about.
I have no idea if Dr. Roubini will correct, directionally or in terms of magnitude (I agree with direction not magnitude), but his work is a thorough exploration of what might go wrong.
Wikinvest Wire
3 comments:
"He who lives by the crystal ball will die from eating broken glass." - Old Chinese Proverb.
One perspective on Roubini and his failed forecasts at: http://tinyurl.com/mfc99
Also more broken glass to eat:
http://tinyurl.com/m82zh
I'm skeptical of all forecasters and wonder how some of them deal with confirmation bias, you can feed any view you have on the net these days.
How will this forecaster help me make money is a pertinent q for an investor to ask.
Cheers,
Andrew.
Looks like you flunk, Roger--you should have paid more attention in Prof. Roubini's class. So far, he's right--all the way.
you realize the post you commented on was posted in August of 2006 right?
He was WAY early on every aspect of his predictions and for now is not yet correct about the magnitude.
what we have thus far is not severe. he may turn out to be correct about the magnitude but your comment is quite peculiar.
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