Dr. Doom, Nouriel Roubini
Posted on 04/21/2011 2:06:23 AM PDT by bruinbirdman
Dr. Doom Nouriel Roubini gave his views on S&P’s recent outlook downgrade for U.S. government debt, considering it a “reminder” to Washington to do the right thing on Wednesday. Noting that short-term fiscal balance can be restored fairly easily, while long-term fiscal restructuring will require strong political will and will probably have to wait until after the 2013 elections.
Dr. Doom, Nouriel Roubini
It is not every day that perma-bear Nouriel Roubini sounds relatively optimistic on macroeconomic matters. Yet the renowned NYU economist said that “a bond market revolt is not at all easy to engineer in the United States” as “there is no safer asset destination on the planet than the United States, which has the third-longest-running system of government in the world, despite being a young nation.”
With the Dow Jones Industrial Average and the S&P 500 suffering their worst one-day performance in over a month on April 18, there is no doubt that S&P’s landmark downgrade rattled markets. That was no more than a “knee-jerk risk-off wave” that will “pass as people begin to recognize that this rating move will make little if any difference.”
Writing along with RGE Monitor’s Arnab Das, Roubini explains that it is natural that after a massive leveraged asset bubble a country’s public debts would rise substantially, as Keynesian consumption-smoothing mechanisms, financed by borrowing against future revenues and growth, are deployed to redistribute resources among economic actors. “But the flip side of this short-term recovery may be reduced post-recovery potential and actual growth: The larger public debt portends a future rise in taxes on wealth and/or income, which in turn weighs on growth and thereby on fiscal balance,” wrote the economist. (Read Heather Struck’s take Key Question For S&P: Can U.S. Be More Like Europe?).
Interestingly, Roubini says
(Excerpt) Read more at blogs.forbes.com ...
The 2013 elections? Which ones are those?
I suppose he assumes that Obama will win in 12 and then declare new elections in 13 to make him King. Naturally, in cases like these, he is the only one who gets a vote in the matter.
I don’t like or trust this guy. He seems to be a hack for the MSM and is rarely correct in his predictions.
in other words, unlike Bear Stearns, the US is really too big to fail, in his humble opinion.
in other words, unlike Bear Stearns, the US is really too big to fail, in his humble opinion.
Post his big call of the CMO’s in Oct of 07 and how it would destroy housing/banking, No. He has been a bit off his game. That one he called and I remember it being posted here, the market was smoking past 13k...
Schiff is my go to guy on these things.
The failure of the US is assured and unavoidable... name one thing working to stop our death... just one?
LLS
"Remain calm, everything is under control".....
I’m sure he mean the 2012 elections — whereby the new congress and President begin work January 2013. Roubini is no MSM hack, no apologist for liberalism at all. And his point is that the US is still safer than a lot of the world’s economies, who have been socialist for a lot longer than we have.
He may or may not be right in this prediction, but he has a good track record.
If we’re out of business, your natural resources aren’t worth half as much. Freedom is self-correcting. We’re the strongest economic engine there is.
LLS
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