Italy`s Crisis – Dr Nouriel Roubini blog 09-28-13

Salient to Investors:

Nouriel Roubini at NYU writes:

  • Expect Italian elections in early 2014 but sooner is possible.
  • If there is no solution to Italy’s crisis, the spread will rise to 3 percent in a few days and the calm period for Italian stocks will end.
  • Bank stocks will be particularly hard hit and credit costs will continue to rise.
  • The sooner the elections, the worst the damage for bonds.

Read the full article at  http://drnourielroubini.blogspot.com/2013/09/italys-crisis.html

Click here to receive free and immediate email alerts of the latest forecasts.

Emerging Market Rout: There`s More To Come – Dr Nouriel Roubini blog 09-26-13

Salient to Investors:

Nouriel Roubini at NYU writes:

  • The rout in the emerging market asset classes is past midway but more is ahead as the recovering West points to Fed tapering.
  • Many stages in the shift in the US and global monetary and financial conditions are to come within the next 2 years, and then there is Syria escalating.
  • Capital thirsty countries like India will remain in the forefront of global market risk reduction.

Read the full article at  http://drnourielroubini.blogspot.com/2013/09/us-inequality-sharply-rising-again.html

Click here to receive free and immediate email alerts of the latest forecasts.

‘Dr. Doom’ Roubini: U.S. Growth Picture Is Sub-par – BloombergTV 09-06-13

Salient to Investors:

Nouriel Roubini at NYU said:

There has been a global recovery in the last year with the US recovery and reduced tail risks of a eurozone breakup and a hard landing in China.

The US economy recovery is very fragile, with barely 2% GDP growth expected in Q3, and the improvement in the labor market is partially due to a lower participation rate. US government spending is still falling, a fiscal drag, capital spending is weak, housing is softening, flat consumption in July, and net exports are worsening.

The Fed may taper in September but with the 10-year T-yield close to 3% so any further tightening will hurt the interest rate sectors like housing and capital spending. Any Fed tapering in September should be accompanied by a very dovish statement: a hawkish statement would push 10-yr T-yields well above 3% and choke the economic recovery.

The Eurozone is improving but the problems in the periphery remain unresolved: 5 of the 7 peripherals remain in recession. While the tail risks of a Greek exit and Italy and Spain losing market access have been significantly reduced, the fundamentals problems of the periphery have not been not resolved:  low potential growth because of slow reform, public debts well above 100% of GDP for Italy, Spain and other peripherals that will keep on rising, problems of competitiveness. and some improvement in current accounts that are cyclical due t the recession and not structural.

Italy government could collapse if Berlusconi’s threat to pull the plug on the government unless he gets a pardon or avoids prison is not a bluff, the government will collapse and there will be elections before year-end and the chances of a government lasting more than a year and structural reforms both of which the country needs are relatively low.

The Greek government could fall within 6 months. Portugal and Spain have political uncertainties. Europe has austerity fatigue in the periphery and bailout fatigue in the core.

If attack on Syria is surgical and last only a few days then the further effect on oil prices will be moderated: if the conflict escalates then oil prices would be longer and more persistent and significantly damaging for all oil importing countries.

Emerging markets have had the double whammy of Fed tapering and rise in bond yields and the slowdown of China which has led to a fall if not the end of the commodity super cycle.  India, Indonesia, Turkey, South Africa, Brazil all have current account deficits, fiscal deficits, falling growth, inflation above targets, and social and political problems and elections within the next 12 to 18 months, and ugly policy choices. However, most of these countries are in better shape than in previous emerging market crises in the past decade crises with more flexible exchange rates, war chest of reserves and less currency miss-match so do not expect a repeat of the massive yen crisis of 10-15 years ago.

Watch the video at  http://www.bloomberg.com/video/-dr-doom-roubini-jobs-signal-sub-par-u-s-growth-AJzLRJ1gTcGrHz47j0zFnA.html

Click here to receive free and immediate email alerts of the latest forecasts.

Fed’s Liquidity Injections Are Not Creating Credit For The Real Economy – Dr Nouriel Roubini Blog 07-23-13

Salient to Investors:

Nouriel Roubini writes:

QE is not creating credit for the real economy, but instead boosting leverage and risk-taking in financial markets. The issuance of risky junk bonds is increasing and the stock market is at new highs, despite the growth slowdown. Money is flowing to high-yielding emerging markets.

Read the full article at  http://drnourielroubini.blogspot.com/2013/07/be-sure-your-seat-belt-is-securely.html

 Click here to receive free and immediate email alerts of the latest forecasts.

Market Outlook: Gravitational Forces & Levitational Forces – Dr Nouriel Roubini Blog 07-21-13

Salient to Investors:

Nouriel Roubini writes:

  • Economic growth and earnings growth are slowing down, while both top and bottom lines are not what they were, though margins are high.
  • The gravitational forces of a slowing economy will lead to a correction, but the levitational forces of QEs, zero policy rates, and market inflows in the US,and other economies will levitate asset prices. As long as the economy grows 1.5% to 2% and there is easy money, this market can go higher.

Read the full article at  http://drnourielroubini.blogspot.com/2013/07/be-sure-your-seat-belt-is-securely.html

Click here to receive free and immediate email alerts of the latest forecasts.

Dr Nouriel Roubini says Rwanda is fascinating… – Dr Nouriel Roubini Blog 07-16-13

Salient to Investors:

Nouriel Roubini writes:

Rwanda has a visionary leader and very competent policy team. Its impressive economy has been growing close to 8% for many years albeit from a low base, and Kigali has good urban planning unlike other African cities

Read the full article at  http://drnourielroubini.blogspot.com/2013/07/dr-nouriel-roubini-says-rwanda-is.html

 Click here to receive free and immediate email alerts of the latest forecasts.