Continue reading Roubini: Troubled European Nations Must Follow Through with Budget Cuts

Roubini: Troubled European Nations Must Follow Through with Budget Cuts originally appeared on BloggingStocks on Mon, 10 May 2010 16:30:00 EST. Please see our terms for use of feeds.

Financial guru, Nouriel Roubini foresees rising sovereign debt leading to defaults.

Roubini predicted the U.S. financial collapse at least a year before it happened. Now he is predicting sovereign defaults for European Union (EU) nations.

Continue reading Roubini: Rising Sovereign Debt Will Lead to Defaults

Roubini: Rising Sovereign Debt Will Lead to Defaults originally appeared on BloggingStocks on Sun, 02 May 2010 15:40:00 EST. Please see our terms for use of feeds.

Which way is the stock market headed, up or down? That question is on the minds of many investors these days.

We've a 50% run up since the January lows. Nouriel Roubini said: "Markets have gone up too much, too fast." I see the risk of a correction, especially when the markets now realize that the recovery is not rapid and V-shaped, but more like U-shaped.

Continue reading Roubini: Markets are up 'too much, too fast'

Roubini: Markets are up 'too much, too fast' originally appeared on BloggingStocks on Mon, 05 Oct 2009 11:00:00 EST. Please see our terms for use of feeds.

Continue reading Before the bell: Stock markets taking a breather

Before the bell: Stock markets taking a breather originally appeared on BloggingStocks on Wed, 26 Aug 2009 08:30:00 EST. Please see our terms for use of feeds.

What are Roubini's new predictions? This time the noted economist is future casting the price of commodities. He is looking for the global economy to move toward growth in the later part of 2009 into 2010.

When the world moves into greater production, the need for raw materials rises. Roubini, sees commodity prices moving up during this expansion stage.

Already China's $585 billion stimulus package has spurred lending and sent share prices skyrocketing. China's economic growth surged 7.9% from a year earlier and is well on the way to meeting its target of 8% growth this year. China's purchasing manager's index stood at 53.3 in July, up from 53.2 in June. A reading above 50 indicates expansion in the the economy.

Continue reading Roubini sees higher commodity prices

Roubini sees higher commodity prices originally appeared on BloggingStocks on Mon, 03 Aug 2009 13:20:00 EST. Please see our terms for use of feeds.

Continue reading Closing Bell: Roubini saves the day (CIT, STP, MOT, JPM)

Closing Bell: Roubini saves the day (CIT, STP, MOT, JPM) originally appeared on BloggingStocks on Thu, 16 Jul 2009 16:00:00 EST. Please see our terms for use of feeds.

People are not seeing job creation or an improvement in the economy. Consumer sentiment is deteriorating. The stock market is falling again. Specifically they cite:

• Consumer confidence fell to 49.3 in June from 54.8 in May.
• The economy shrank 5.5% in the first quarter.
• The savings rate reached 6.9% in May, the highest since 1993.
• Home prices in seven metropolitan areas fell .7% in April.

Continue reading Gurus Roubini and Shiller see the need for more stimulus

Gurus Roubini and Shiller see the need for more stimulus originally appeared on BloggingStocks on Fri, 10 Jul 2009 15:20:00 EST. Please see our terms for use of feeds.

Nouriel Roubini, professor of economics at New York University, was one of the first to predict the collapse of the U.S. banking system and the current financial crisis. Well, he's back in the news with his forecasts.

What does he see in our future? More bad news. The bear market is not over, says Roubini. The stimulus package will slow the rate of contraction, but that will take time. Macro news, earnings reports and financial shocks will be worse than expected.

Continue reading Roubini the bear is forecasting more of the same, banking shocks and bad news

Roubini the bear is forecasting more of the same, banking shocks and bad news originally appeared on BloggingStocks on Wed, 08 Apr 2009 12:10:00 EST. Please see our terms for use of feeds.

Late last year my colleague Joseph Lazzaro posted a story about NYU's 'Dr. Doom' Roubini: Stocks may fall another 20% during recession. That has to make one take pause when considering an investment in the stock market today, even after a major drop retesting November lows this week. On the other hand, Warren Buffett went out of his way to encourage the investing public and money managers alike that it was safe to go back into the market.

However, today it has been widely reported that Buffett sold off half of his holdings in Johnson & Johnson and trimmed his stake in Procter & Gamble.

Continue reading Buffett says buy, then sells, Roubini says wait -- what's an investor to do?

Buffett says buy, then sells, Roubini says wait -- what's an investor to do? originally appeared on BloggingStocks on Wed, 18 Feb 2009 12:55:00 EST. Please see our terms for use of feeds.

Continue reading NYU's 'Dr. Doom' Roubini: Global stock markets to fall 20% more, due to China's recession

NYU's 'Dr. Doom' Roubini: Global stock markets to fall 20% more, due to China's recession originally appeared on BloggingStocks on Fri, 23 Jan 2009 11:30:00 EST. Please see our terms for use of feeds.

Continue reading NYU's 'Dr. Doom' Roubini: The worst is still ahead of us

NYU's 'Dr. Doom' Roubini: The worst is still ahead of us originally appeared on BloggingStocks on Thu, 08 Jan 2009 12:47:00 EST. Please see our terms for use of feeds.

Nouriel Roubini, the once obscure New York University economics professor who two years ago predicted the current global financial crisis, now says the world's largest economy will need a large fiscal stimulus from the federal government to avoid a serious economic downturn.

Further, failure by Congress to pass a large fiscal stimulus, as well as undertake other measures, will lead to a 18 to 24 month recession, which will push unemployment above 9%, Roubini said on his website, the RGE Monitor.

Sees need for large fiscal stimulus

"Much more needs to be done including further monetary policy easing, a large fiscal stimulus program to boost demand at the time when private aggregate demand (consumption and investment) are sharply falling; and a plan to reduce the mortgage debt burden of millions of distressed households," Roubini said.

Further, Roubini said the U.S. government will have to double its purchase of bank stakes and require these banks to eliminate dividends to save them from bankruptcy. He also now sees bank/financial institution credit losses stemming from the collapse of the subprime mortgage market of about $3 trillion, up from his earlier estimate of $1-2 trillion.

The above statistics paint a sobering prospect/picture of economic contraction, but Roubini does see a ray of light:

Continue reading NYU's 'Dr. Doom,' Nouriel Roubini, says U.S. recession could last 18-24 months

NYU's 'Dr. Doom,' Nouriel Roubini, says U.S. recession could last 18-24 months originally appeared on BloggingStocks on Sat, 18 Oct 2008 18:40:00 EST. Please see our terms for use of feeds.

Nouriel Roubini, a professor at New York University, has recently been profiled in both Barron's and The New York Times. There may be nothing special about his training or methods, but what is fairly unique is his opinion that we are on the brink of a modern version of the Great Depression.

It is hard to say why the media wants to give his analysis voice, but he has become the object of almost endless fascination.

The foundation of his view of the economy is that the current housing disaster will get much, much worse and that banks will end up writing off almost $1.5 trillion in mortgage-related paper. That is about three times what they have taken as charges so far. The New York Times quotes Roubini as saying, "A good third of the regional banks won't make it."

While a number of experts believe that the recession could last a year, Roubini would he called an extremist by most measures. He foresees a downturn lasting 18 months.

The media does not like Roubini because he may be right. They like him because predictions of great economic collapse and mayhem sell papers. That is too bad. The public deserves a more balanced view.

Douglas A. McIntyre is an editor at 24/7 Wall St.

The most negative economist in the world originally appeared on BloggingStocks on Sun, 17 Aug 2008 14:40:00 EST. Please see our terms for use of feeds.

Bloomberg News reports that banks' subprime write-downs have hit $500 billion. The last time I checked, that figure was $400 billion. Bloomberg reports that New York University economist Nouriel Roubini forecasts such losses will ultimately total $2 trillion. I wonder if he would revise his estimate upwards.

Recently banks have been taking write-downs for their Auction Rate Securities (ARS). Bloomberg reports about $1.9 billion has been set aside so far to cover ARS losses. It notes that UBS AG (NYSE: UBS) set aside $900 million to cover potential losses and Citigroup, Inc. (NYSE: C) and Wachovia (NYSE: WB) each estimate that their ARS buybacks will cost $500 million.

Write-downs have been going hand in hand with capital raising. But banks and brokers have not been able to raise enough capital to offset the losses. Bloomberg calculates that they've raised "$353 billion of capital to cope with the write-downs. The gap between the losses and capital infusions, which stands at $148 billion, has regularly narrowed to about $80 billion as capital raising follows write-down announcements."

Can banks and brokerages raise another $1.7 trillion to keep up with the write-downs that Roubini forecasts? I sincerely doubt it.

Peter Cohan is President of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter. He owns Citigroup stock and has no financial interest in the other securities mentioned.

Subprime write-downs total $500 billion -- just $1.5 trillion to go originally appeared on BloggingStocks on Tue, 12 Aug 2008 16:46:00 EST. Please see our terms for use of feeds.