The financial markets’ Prince of Darkness is making a lot of headlines today with some more gloomy forecasts.
In his own pen over at the Financial Times, he comes close to writing an obituary for the euro-zone. While he offers some half-hearted caveats, he clearly thinks the euro-zone is headed for a bad break-up.
“Paradoxically the halo effect of early interest rate convergence allowed a greater divergence in fiscal policies. A reckless lack of discipline in countries such as Greek and Portugal was matched only by the build-up of asset bubbles in others like Spain and Ireland.”
Just a matter of time before it all goes pear-shaped.
Bloomberg and Reuters report on comments made by Mr. Roubini at a Singapore investing conference over the weekend.
“A ‘perfect storm’ of fiscal woes in the U.S., a slowdown in China, European debt restructuring and stagnation in Japan may converge on the global economy, Mr. Roubini said. He adds that there’s a ‘one-in-three chance the factors will combine to stunt growth from 2013.’”
Bloomberg (and Reuters) note that Roubini gained notice for predicting the global financial crisis.
But give the Bloombergers their due, they also note that Roubini’s crystal ball has struggled for soothsaying clarity more recently.
“Some of his other predictions haven’t panned out, including his call on July 4, 2010, for ‘market surprises on the downside’ in ensuing months and a weakening in economic growth. The MSCI World Index rallied 23 percent in the second half of last year, while U.S. gross domestic product gains accelerated to 2.6 percent in the third quarter and 3.1 percent in the fourth quarter from 1.7 percent in the April-to-June period.”
Over at Reuters, Roubini grabs for the anecdotal to explain his darkening views about China.
“I was recently in Shanghai and I took their high-speed train to Hangzhou,” he said, referring to the new Maglev line that has cut traveling time between the two cities to less than an hour from four hours previously.
“The brand new high-speed train is half-empty and the brand new station is three-quarters empty. Parallel to that train line, there is a also a new highway that looked three-quarters empty. Next to the train station is also the new local airport of Shanghai and you can fly to Hangzhou,” he said.
“There is no rationale for a country at that level of economic development to have not just duplication but triplication of those infrastructure projects.”
Mr. Roubini has remarked on China’s coming difficulties before.
In his own pen over at the Financial Times, he comes close to writing an obituary for the euro-zone. While he offers some half-hearted caveats, he clearly thinks the euro-zone is headed for a bad break-up.
“Paradoxically the halo effect of early interest rate convergence allowed a greater divergence in fiscal policies. A reckless lack of discipline in countries such as Greek and Portugal was matched only by the build-up of asset bubbles in others like Spain and Ireland.”
Just a matter of time before it all goes pear-shaped.
Bloomberg and Reuters report on comments made by Mr. Roubini at a Singapore investing conference over the weekend.
“A ‘perfect storm’ of fiscal woes in the U.S., a slowdown in China, European debt restructuring and stagnation in Japan may converge on the global economy, Mr. Roubini said. He adds that there’s a ‘one-in-three chance the factors will combine to stunt growth from 2013.’”
Bloomberg (and Reuters) note that Roubini gained notice for predicting the global financial crisis.
But give the Bloombergers their due, they also note that Roubini’s crystal ball has struggled for soothsaying clarity more recently.
Over at Reuters, Roubini grabs for the anecdotal to explain his darkening views about China.
“I was recently in Shanghai and I took their high-speed train to Hangzhou,” he said, referring to the new Maglev line that has cut traveling time between the two cities to less than an hour from four hours previously.
“The brand new high-speed train is half-empty and the brand new station is three-quarters empty. Parallel to that train line, there is a also a new highway that looked three-quarters empty. Next to the train station is also the new local airport of Shanghai and you can fly to Hangzhou,” he said.
“There is no rationale for a country at that level of economic development to have not just duplication but triplication of those infrastructure projects.”
Mr. Roubini has remarked on China’s coming difficulties before.
