ROUBINI: 'Short-Term Bullish, Long-Term Catastrophe'

[thenews]

NYU economist Nouriel Roubini – known to many by his nickname, "Dr. Doom" – is getting bullish.

Roubini has been pretty negative over the past few months, despite the rally in asset prices and a general turn in sentiment toward the economy and markets on the Street.

Now, it seems like Roubini is finally coming around to the consensus view. In a way.

Coincidentally, his latest interview – with Yahoo! Finance's Aaron Task – comes hot on the heels of the biggest sell-off this year, and as Task notes, people like Dennis Gartman are now rushing for the sidelines.

Roubini told Task in the interview:

It's not going to be that we are going to get a rout in the bond market, because the Fed knows that when they exit, they have to exit slowly – and they can hold to maturity.

So, if you're not going to have goods inflation – if you're not going to exit fast enough – then the risk is like during the cycle of 2003-2006, where we're exiting very slowly. It was a measured pace – 25 basis points every six weeks, and we got what? An asset bubble. A credit bubble. A housing, a sub-prime bubble.

So, like Jeremy Stein at the Fed says, we are at the beginning of another credit bubble, because we are going to exit so slowly that the financial excess is not going to go into goods inflation; we're not going to have a bond market rout.

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[joe blogs]

Probably best to continue selling up then?

contrary to his own beliefs - the market usually does the opposite of what he says,

except the one time every man and his dog said the markets were in trouble

by the looks of the interview he does nt seem to really have a clue whats going on

credit bubble (what credit)

and no inflation, not where i live

must be nice to be paid to speak bollocks all day, where do i sign up?

agree though there does look to be something bad on the way

but then most can also see this,

what we need is a different direction from the powers that be

as there old plan does nt seem to be working too well

[Mladen Rakic]

NYU, Stern School of Business - teacher

WR1:
Probably best to continue selling up then?

contrary to his own beliefs - the market usually does the opposite of what he says,

except the one time every man and his dog said the markets were in trouble

by the looks of the interview he does nt seem to really have a clue whats going on

credit bubble (what credit)

and no inflation, not where i live

must be nice to be paid to speak bollocks all day, where do i sign up?

agree though there does look to be something bad on the way

but then most can also see this,

what we need is a different direction from the powers that be

as there old plan does nt seem to be working too well

[seekers]

Who knows, works. Who doesn't know, administers. Who doesn't know to administer, teaches