When Roubini returned to the I.M.F. last September, he delivered a second talk, predicting a growing crisis of solvency that would infect every sector of the financial system. This time, no one laughed. “He sounded like a madman in 2006,” recalls the I.M.F. economist Prakash Loungani, who invited Roubini on both occasions. “He was a prophet when he returned in 2007.”
On Sept. 7, 2006, Nouriel Roubini, an economics professor at New York University, stood before an audience of economists at the International Monetary Fund and announced that a crisis was brewing. In the coming months and years, he warned, the United States was likely to face a once-in-a-lifetime housing bust, an oil shock, sharply declining consumer confidence and, ultimately, a deep recession. He laid out a bleak sequence of events: homeowners defaulting on mortgages, trillions of dollars of mortgage-backed securities unraveling worldwide and the global financial system shuddering to a halt. The audience seemed skeptical, even dismissive. But Roubini was soon vindicated. |
clipped from www.nytimes.com
2 comments:
If you look at the actual transcript of what Roubini said at the September 2006 IMF meeting, you'll see how misleading the NY Times article is. For example, Roubini predicted a FALL in oil prices, not an oil shock, among other wrong predictions, which are now being glossed over. Here's the real transcript: http://www.businesscycle.com/news/press/1643/
Yes I did notice Roubini was off on the oil thing, and also his statement that he believes the US will avert a Great Depression is also off. I did quote his piece to say that essentially 'pessimism is more rational' right now. Thanks for your comment.
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