[Rune]

Dr. Doom Makes Case FOR the US Economy

Nouriel Roubini may have made his name foretelling doom and gloom, but his tone has changed enough to reflect an improbable belief in a stronger U.S. economy.

In fact, the word "crisis" or any of its synonyms was missing almost entirely from a speech the head of Roubini Global Economics delivered Monday at IndexUniverse's Inside Commodities conference.

Roubini did use the term "anemic" on multiple occasions to describe the global economic recovery.

But he maintained that the U.S. will be better positioned than most of its global competitors, leading to an appreciation in its currency, no bond market crash and only a gradual increase in interest rate.

"The dollar is likely to become stronger rather than weaker," Roubini said. "The thing about the U.S. compared to other advanced economies...the fundamentals for the U.S. are much better."

Among the advantages he cited are growth in productivity and technology as well as continued easy money policies from the Federal Reserve, even though he expects the central bank to begin cutting back on its monthly bond-buying soon and to raise rates starting in 2015.

As for investing implications, he said he would be "overweight U.S. equities" and made a case for a stronger dollar as well.

"The U.S. is much more advanced and has much more success than other economies. The growth in the U.S. is going to be much faster than Europe, the U.K. and Japan," Roubini said. "Gradually the dollar is going to increase in value rather than collapse the way some dollar doomsday folks believe."

On a global perspective, he did caution against banking on a strong recovery in emerging markets, reasoning that China's growth is slowing and the so-called commodity supercycle is winding down, while U.S. central bank easing, and the liquidity it provides, is going to start evaporating.

On that score, Roubini maintains a bearish view on gold, believing that it is on its way down to $1,000 an ounce as inflation, for which gold is a traditional hedge, fades as a threat.

"Those worried about inflation worry about all the money printing leading to that inflation," he said. "Inflation in advanced economies is going to be the least of problems developed economies will face in the next two or three years."

Remember when Nouriel Roubini was all the rage here at po.com?

I don't read every thread but I haven't seen him mentioned much recently. Is he still doctor doom? And if so, what is he doomerish about these days? When did he fall off the doomerometer?

[dorlomin]

http://www.project-syndicate.org/commen ... el-roubini

You missed this.

[copious.abundance]

http://www.project-syndicate.org/commentary/the-eurozone-s-unaddressed-problems-by-nouriel-roubini

You missed this.

That's Europe. Rune's article was his views on the US.

[dorlomin]

That's Europe

Well spotted.

It says all we need to know about your desire for an honest discussion that you only want to cherry pick his predictions that suit your agenda and not take a look at everything he says.

[Rune]

He says that the threat of collapse of the european monetary union has diminished significantly but that underlying issues have not resolved. He says that bail-out fatigue has set in and everyone is sick of the situation. So this could be merely a calm between storms.

Well, that is not surprising. And we all knew it anyway.

But this level of doomerism is nowhere near what it used to be. And Roubini's comments 6 or 8 yers ago pertained to the US economy and were severe. That seems to have abated.

I was surprised actually. What with all the quantitative easing and massive debt accumulation in the US, I thought Roubini might have been forecasting misery here just as awfully as he ever had been.

Lately, I've been re-visiting subjects that were once popular here at po.com and seeing what has become of them. The dire prophet, Roubini, was one of those, I recall.

Another example, in economics, was the huge debate here about the causes of the 2008 financial crisis, and how peak oil or, at least, more expensive energy was at the root of it.

But that doesn't seem to have turned out to be true, as I have pointed out. I counted the number of books written about the crisis on amazon - nearly 60 of them - and couldn't find any that directly blamed oil scarcity or expensive oil. Although it has been blamed, in part, for the sluggishness of the recovery.

My observation is that no book has been published that has expensive energy as its main thesis or even as a primary contributor to the crisis.

I suppose I would have to go back and read some of Roubini's articles from 2004 onwards to see if his unique brand of doom had the ring of truth or was over-blown.

[Rune]

Charles Maxwell, veteran oil analyst with Weeden & Co., is still on the peak oil doom podium, but the frequency of his articles has really dropped off.

He was forecasting a peak in the 2015 - 2020 timeframe. And if he had to pick a year, it would be 2017.

Maxwell's articles were a regular feature here, and it doesn't appear that he has changed his mind, but I haven't seen much from him on the subject for a few years now.

I don't think anyone can really forecast it well at all and certainly cannot forecast the length of the supposed plateau or rate of decline.

Remember Ken Deffeyes "Home of Hubbert's Peak"? - "Join us as we watch the crisis unfold".

Well, perhaps Deffeyes is thoroughly retired now and let the man be in peace in his old age, but one would think that he would write some bit now and then about his forecast of peak oil in - what was it? - August of 2005? How incredibly accurate he tried to be with his model.

[kiwichick]

2005 was the peak in conventional oil

exports from opec have been declining since 2006

the US and high wage countries like australia , are going to hit harder than developing countries imho

[kiwichick]

if you want doom try guy mcpherson

[copious.abundance]

That's Europe

Well spotted.

It says all we need to know about your desire for an honest discussion that you only want to cherry pick his predictions that suit your agenda and not take a look at everything he says.

FWIW, I give little or no credence to what Roubini says, gloomy or sunny. He's one of those guys who has become famous in spite of (or because of?) his sketchy track record of predictions. I was merely pointing out his prediction, as posted by Rune, was specific to the US. Perhaps he'll be wrong again, or maybe he'll be right for once. In either case I think the best thing to do would be to simply ignore him.

[Loki]

Remember when Nouriel Roubini was all the rage here at po.com?

Wait, so you're telling me the Great Recession didn't actually happen after all? Well that's a relief.

"Gradually the dollar is going to increase in value rather than collapse the way some dollar doomsday folks believe."

Yes, it's called deflation. Roubini is arguing against the notion that the Fed's "money printing" will cause significant inflation. He is correct, in my opinion. The "doomsday folks" he's referring to are the gold bugs, right wingers (mostly) who are convinced the goobermint is "debasing the currency." They are incorrect, in my opinion.

That's he's saying the US will fare better than Europe or Japan is akin to picking the tallest midget to play on your basketball team.

FWIW, I give little or no credence to what Roubini says, gloomy or sunny. He's one of those guys who has become famous in spite of (or because of?) his sketchy track record of predictions.

Which one of the cornucopian economists you read predicted the Great Recession? None? And that doesn't make their track record "sketchy"?

And for the record, I don't actively follow Roubini, though I have read a number of his articles. I prefer Steve Keen myself, he's done a good job of explaining the dynamics of debt deflation. Keen also predicted the Great Recession

[copious.abundance]

Which one of the cornucopian economists you read predicted the Great Recession? None? And that doesn't make their track record "sketchy"?

I have yet to find any single economist/analyst-type I mostly agree with. There are several who I regularly read, and who I find offer interesting insights on one thing or another, but as soon as I read one thing I think he/she gave an interesting viewpoint on, he/she will next write something that tells me they don't always know what they're talking about.

If I was forced at gunpoint to cite one person I would recommend, I'd probably say Bill McBride (the Calculated Risk guy). He has a pretty good track record. But I don't always agree with him on everything, either.

[dorlomin]

FWIW, I give little or no credence to what Roubini says, gloomy or sunny. He's one of those guys who has become famous in spite of (or because of?) his sketchy track record of predictions.

We are full of your posting predictions about the economy and oil production, when they agree with you.

Now

gloomy or sunny. He's one of those guys who has become famous in spite of (or because of?) his sketchy track record of predictions.

You are trying to pretend that you take some kind of broad approach. Its not even close. You simply cherry pick what you want to hear with zero concern for track record.

[copious.abundance]

So far, I have been right about oil production, and more right than any doomer here about the economy. So anyone here who criticizes me about track records, is, putting it bluntly, either an idiot, jealous, or in denial.