Nouriel Roubini stands tall as one of the few commentators to have accurately predicted the financial crisis. Of course, economic pessimists are hardly a rare breed; they interact with optimists to decide on economic equilibria in a variety of different markets. However, Roubini not only predicted the crisis, but he called where it would come from, citing similarities between the emerging markets of his early academic research and the credit bubble forming in the US housing market. He also predicted the spread to emerging economies and the Eurozone, and warned back in 2006 of the potential problems that a lack of reform on the part of some of the members of the Eurozone, namely Italy, Greece and Spain would have for their sovereign debt levels.
Quite a repertoire given the intrinsically unpredictable nature of the matter at hand.
Roubini was educated at Bocconi University, Milan, where he achieved a Bachelor of Arts in political economics, before going on to complete a postgraduate degree in international economics at Harvard. From there, he has served in numerous advisory capacities in both the public and private sector, having done work for the IMF, the World Bank, the Federal Reserve and the Bank of Israel. He also lectures at New York University’s Stern School of Business.
Roubini has also started his own consultancy firm called Roubini Global Economics (RGE) which provides clients with detailed market information in their specified fields.
Besides these commitments, Roubini still finds time to be a prominent participant in the global debate concerning the economic crisis, and has been an outspoken critic of government policies throughout the crisis.
In particular, Roubini argues that Greece should exit the Eurozone and readopt the Drachma in order to cure its currency problems. His argument, that the fundamental problems concerning the Greek economy in comparison with that of the Eurozone as a whole, namely that their businesses, in failing to remain competitive in comparison with the Eurozone’s stronger members, fail to keep pace with the single currency, and Euros earned in Greece are progressively being worth less and less. ECB bailouts and debt writedowns do no address this fundamental incompatibility, he argues.
In a wider sense, he thinks that “Dark, lowering financial and economic clouds are, it seems, rolling in from every direction…the global economy in 2013 could be a very difficult environment in which to find shelter.” Perhaps we should not be surprised at his negative outlook, having been nicknamed permabear by some sections of the US media, but his track record is dauntingly accurate.
If this Cassandra is to be believed, we should “batten down the hatches.”