wayneL
VIVA LA LIBERTAD, CARAJO!
- Joined
- 9 July 2004
- Posts
- 25,821
- Reactions
- 13,032
A bit of a tangent, but just had to put this somewhere:
Who actually predicted this Financial Crisis?
- Thread starter Knobby22
- Start date
Trembling Hand
Can be found on the bid
- Joined
- 10 June 2007
- Posts
- 8,852
- Reactions
- 205
Wayne LOL 
- Joined
- 6 June 2007
- Posts
- 1,314
- Reactions
- 10
I went and saw Prof. Nouriel Roubini speak last night (at the CFA Society of Melbourne). An amazing intellect - he spoke for an hour without using slides or notes. His eloquent argument and razor-sharp recall of current economic data will stay with me.
His key-note message: 'green shoots amongst the yellow weeds'.
In a nutshell:
1. He expects a U or W global recovery at best with anemic US GSP growth of >1% p.a. for the next few years. His outlook is even more bearish for Europe and Japan;
2. He expects US unemployment to peak at 11%; also he commented on the rise of part-time workers and how this is not reflected in the head-line unemployment rate.
3. He expects US housing to have a 'peak-to-trough' fall of 40%!! (We are currently at 27% so still more pain). At the trough, roughly 50% of US home owners will be in a negative equity positition. (Points 2 & 3 are his chief 'big yellow weeds' that spells further saving and less consumption by US consumers.)
4. He noted the impact of China and India but notes that the combined Chinindian population of 2.2b still only accounts for 1/6th of global consumption. Without US/Europe/Japan global growth will splutter along.
5. He noted the risk of stagflation has increased with the ever growing US-budget deficit (expected to be 14% of US-GDP in 2010!!!!!!).
6. He notes that while Australia's household indebtedness is in fact greater than the US, we have escaped the housing melt-down due to the fact that we do not have non-recourse mortgages (i.e. jingle mail). Also we are the 'lucky country' in terms of resources but watch out for Chinese stockpiling.
7. He also mentioned the massive supply-side stimulus in China and how this could lead to a bubble or two in the future! This would be an untested scenario for Chinese banking.
However the good news is the post-Lehman depression indicators (i.e. drop off in industrial production, factory orders, commodities etc) have passed and hence the rally in the share market.
These are my main recollections. As I said, Roubini is a keen intellect! The Dr. Doom media rubbish is a bit much given his original predictions of a US housing crash proved quite bullish in the end.
PS: his key message to budding young economists: invest in your education!!
Cheers
B'man
His key-note message: 'green shoots amongst the yellow weeds'.
In a nutshell:
1. He expects a U or W global recovery at best with anemic US GSP growth of >1% p.a. for the next few years. His outlook is even more bearish for Europe and Japan;
2. He expects US unemployment to peak at 11%; also he commented on the rise of part-time workers and how this is not reflected in the head-line unemployment rate.
3. He expects US housing to have a 'peak-to-trough' fall of 40%!! (We are currently at 27% so still more pain). At the trough, roughly 50% of US home owners will be in a negative equity positition. (Points 2 & 3 are his chief 'big yellow weeds' that spells further saving and less consumption by US consumers.)
4. He noted the impact of China and India but notes that the combined Chinindian population of 2.2b still only accounts for 1/6th of global consumption. Without US/Europe/Japan global growth will splutter along.
5. He noted the risk of stagflation has increased with the ever growing US-budget deficit (expected to be 14% of US-GDP in 2010!!!!!!).
6. He notes that while Australia's household indebtedness is in fact greater than the US, we have escaped the housing melt-down due to the fact that we do not have non-recourse mortgages (i.e. jingle mail). Also we are the 'lucky country' in terms of resources but watch out for Chinese stockpiling.
7. He also mentioned the massive supply-side stimulus in China and how this could lead to a bubble or two in the future! This would be an untested scenario for Chinese banking.
However the good news is the post-Lehman depression indicators (i.e. drop off in industrial production, factory orders, commodities etc) have passed and hence the rally in the share market.
These are my main recollections. As I said, Roubini is a keen intellect! The Dr. Doom media rubbish is a bit much given his original predictions of a US housing crash proved quite bullish in the end.
PS: his key message to budding young economists: invest in your education!!
Cheers
B'man