{"id":7575,"date":"2010-02-03T15:30:56","date_gmt":"2010-02-03T20:30:56","guid":{"rendered":"http:\/\/www.thedisciplinedinvestor.com\/blog\/?p=7575"},"modified":"2016-09-20T06:03:51","modified_gmt":"2016-09-20T10:03:51","slug":"roubini-is-bullish-jk","status":"publish","type":"post","link":"https:\/\/thedisciplinedinvestor.com\/blog\/2010\/02\/03\/roubini-is-bullish-jk\/","title":{"rendered":"Roubini is Bullish (JK!)"},"content":{"rendered":"

Did I say Bullish? That was not what I meant at all. In fact, he is pretty sour on the whole idea that the U.S economy is recovering. Unless words like dismal, poor and trouble mean something other these days.<\/p>\n

No, Dr. Doom is still negative and why not…it pays! No one is interested in hearing about positive outcomes from him anyway. Let’s face it, bad new sells. If he was an actor, he would be considered permanently typecasted.\"\"<\/a><\/p>\n

Yes, we have had a hard time booking him for our podcast<\/a> as he does not answer his cell phone, or return phone or text messages. Perhaps I should sweeten the offer?<\/p>\n

None the less, he makes some good points in the latest commentary and rant about how bad the U.S. economy is, even if the headlines look like all is well.<\/p>\n

Below is the article from Bloomberg with my<\/strong><\/em> highlights.<\/p>\n

From Bloomberg.com<\/a>:<\/p>\n

Nouriel Roubini, the New York University professor who anticipated the financial crisis, said the U.S. growth outlook remains \u201cvery dismal<\/strong>\u201d\u009d and White House economic adviser Lawrence Summers said the economy is still mired in a \u201chuman recession.\u201d\u009d<\/strong><\/p>\n

Speaking at the World Economic Forum\u2018s annual meeting in Davos, Switzerland, after the U.S. reported the fastest growth in six years, their comments underscored concern that that emergency measures to rescue banks and fight the recession may be withdrawn too soon.<\/p>\n

\u201cThe headline number will look large and big, but actually when you dissect it, it\u2018s very dismal and poor,<\/strong>\u201d\u009d Roubini said in a Jan. 30 Bloomberg Television interview following a U.S. Commerce Department report that showed economic expansion of 5.7 percent in the fourth quarter. \u201cI think we are in trouble.<\/strong>\u201d\u009d<\/p>\n

Roubini said more than half of the growth was related to a replenishing of depleted inventories and that consumption was reliant on monetary and fiscal stimulus. As these forces ebb, the rate will slow to 1.5 percent in the second half of 2010.<\/p>\n

Roubini, who chairs New York-based Roubini Global Economics LLC, has become famous for his pessimistic projections. In 2007, he correctly predicted a \u201chard landing\u201d\u009d for the world economy. He said last year that the global recession would shrink through 2009, only for growth to resume in the middle of the year.<\/p>\n

He says now that while the world\u2018s largest economy won\u2018t relapse into recession, U.S. unemployment will rise from the current 10 percent amid \u201cmediocre\u201d\u009d growth<\/strong>.<\/p>\n

`Feel Like Recession\u2018<\/p>\n

\u201cIt\u2018s going to feel like a recession even if technically we\u2018re not going to be in a recession,\u201d\u009d he said in the interview.<\/p>\n

Also speaking in Davos, Summers, director of the White House National Economic Council, said that the statistical recovery won\u2018t mask a \u201chuman recession.\u201d\u009d<\/strong><\/p>\n

The U.S. expansion in the October-December period resulted from manufacturers cranking up assembly lines and companies increasing investment in equipment and software. The rebuilding of stocks contributed 3.4 percentage points to gross domestic product, the most in two decades.<\/p>\n

The rebound followed the Federal Reserve\u2018s decision to cut its benchmark interest rate to near zero in December 2008 and President Barack Obama\u2018s $787 billion stimulus package. The jobless rate has the central bank promising to keep borrowing costs low and Obama making new proposals to create jobs.<\/p>\n

`Pretty Attractive\u2018<\/p>\n

Carlyle Group LP co-founder David Rubinstein countered Roubini\u2018s concerns. He said that even after a rally in global stocks that drove the MSCI World Index up more than 60 percent from March 2009, it\u2018s a \u201cpretty attractive\u201d\u009d time to invest.<\/p>\n

\u201cThere are a lot of great opportunities we see in the United States and abroad,\u201d\u009d Rubenstein told a Jan. 27 panel. \u201cSometimes generals fight the last war, economists fight the last recession.\u201d\u009d<\/p>\n

Policy makers may be undermining their effort to spur hiring by attacking banks, Blackstone Group LP Chief Executive Officer Steven Schwarzman said in a Jan. 28 interview in Davos. One in four of chief executive officers worldwide surveyed by PricewaterhouseCoopers LLP for the Davos conference already plans to cut jobs this year.<\/p>\n

\u201cFinancial institutions will feel under siege and they will retreat,\u201d\u009d Schwarzman said. \u201cTheir entire world is being shaken and they\u2018re being attacked personally,\u201d\u009d he said. \u201cWe don\u2018t need those financial institutions insecure.\u201d\u009d<\/p>\n

`Moderate\u2018 Growth<\/p>\n

Summers, a former U.S. Treasury secretary, predicted growth will continue \u201cat least at a moderate rate.\u201d\u009d The median forecast of economists surveyed by Bloomberg News is for the U.S. economy to grow 2.7 percent this quarter.<\/p>\n

\u201cWhat is disturbing is the level of unemployment<\/strong>,\u201d\u009d said Summers.<\/p>\n

\u201cOne in five men in the U.S. between the ages of 25 and 54 is not working right now,\u201d\u009d he told a Jan. 30 panel discussion. Even after a \u201creasonable\u201d\u009d recovery, it will be \u201cone in seven or one in eight.\u201d\u009d That compares to the mid-1960s, when 95 percent of men in that age range were working and \u201csuggests quite profound issues that will ultimately impact on politics and decisions that businesses make,\u201d\u009d he said.<\/strong><\/p>\n

A report scheduled for release by the Labor Department on Feb. 5 may show the U.S. gained jobs in January for the second time in three months. Payrolls probably rose by 13,000 workers last month according to the median forecast of 62 economists surveyed by Bloomberg. The unemployment rate may have held at 10 percent for the third month.<\/p>\n

`Right Direction\u2018<\/p>\n

Nobel Prize-winning economist Joseph Stiglitz said Obama\u2018s previous efforts to bolster the economy are only \u201ca step in the right direction.\u201d\u009d<\/p>\n

\u201cI\u2018m a bit worried that again it\u2018s not enough,\u201d\u009d Stiglitz said in a Jan. 28 Bloomberg Television interview in Davos. \u201cHe has to take a much more active\u201d\u009d approach. \u201cIt has to be a second round in stimulus, focusing in particular on investment.\u201d\u009d<\/p>\n

International Monetary Fund Managing Director Dominique Strauss-Kahn, who two years ago used the Davos stage to lobby governments to increase spending, said policy makers in the U.S. and elsewhere risk narrowing their options if they withdraw emergency measures too soon and the recovery falters.<\/p>\n

\u201cIf you exit too early then the risks are much bigger,\u201d\u009d Strauss-Kahn told the Swiss gathering. If the economy relapses \u201cI don\u2018t know what we could do as most of the things we had in the toolkit have been used.\u201d\u009d<\/p><\/blockquote>\n

___<\/p>\n

Disclosure: Horowitz & Company<\/a> clients may hold positions of securities mentioned as of the date published.<\/p>\n","protected":false},"excerpt":{"rendered":"

Did I say Bullish? That was not what I meant at all. In fact, he is pretty sour on the whole idea that the U.S economy is recovering. Unless words like dismal, poor and trouble mean something other these days. No, Dr. Doom is still negative and why not…it pays! No one is interested in<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_et_pb_use_builder":"","_et_pb_old_content":"","_et_gb_content_width":"","footnotes":""},"categories":[5,12],"tags":[481],"class_list":["post-7575","post","type-post","status-publish","format-standard","hentry","category-economy","category-markets","tag-economy","et-doesnt-have-format-content","et_post_format-et-post-format-standard"],"acf":[],"_links":{"self":[{"href":"https:\/\/thedisciplinedinvestor.com\/blog\/wp-json\/wp\/v2\/posts\/7575","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/thedisciplinedinvestor.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/thedisciplinedinvestor.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/thedisciplinedinvestor.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/thedisciplinedinvestor.com\/blog\/wp-json\/wp\/v2\/comments?post=7575"}],"version-history":[{"count":0,"href":"https:\/\/thedisciplinedinvestor.com\/blog\/wp-json\/wp\/v2\/posts\/7575\/revisions"}],"wp:attachment":[{"href":"https:\/\/thedisciplinedinvestor.com\/blog\/wp-json\/wp\/v2\/media?parent=7575"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/thedisciplinedinvestor.com\/blog\/wp-json\/wp\/v2\/categories?post=7575"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/thedisciplinedinvestor.com\/blog\/wp-json\/wp\/v2\/tags?post=7575"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}