The Trapdoors at the Fed’s Exit

The ongoing weakness of America’s economy – where deleveraging in the private and public sectors continues apace – has led to stubbornly high unemployment and sub-par growth. The effects of fiscal austerity – a sharp rise in taxes and a sharp fall in government spending since the beginning of the year – are undermining economic […]

The Global Economy on the Fly

In the last four weeks, I have traveled to Sofia, Kuala Lumpur, Dubai, London, Milan, Frankfurt, Berlin, Paris, Beijing, Tokyo, Istanbul, and throughout the United States. As a result, the myriad challenges facing the global economy were never far away.   In Europe, the tail risk of a eurozone break-up and a loss of market […]

Preparing for a Perfect Storm

The global economy this year will exhibit some similarities with the conditions that prevailed in 2012. No surprise there: We face another year in which global growth will average about 3 percent, but with a multispeed recovery—a subpar, below-trend annual rate of 1 percent in the advanced economies, and close-to-trend rates of 5 percent in […]

Nouriel at Davos: Global Tail Risks Remain

Speaking with CNN’s Poppy Harlow at Davos, RGE Chairman Nouriel Roubini reiterated the biggest outlying risks to the global economy: U.S. fiscal woes, the eurozone sovereign debt crisis, a potential China hard landing, and geopolitical risk in the Middle East. Nouriel argued that the worst scenario need not materialize to achieve a meaningful impact on […]

The Year Ahead in the Eurozone: Lower Risks, Same Problems

Financial conditions in the eurozone have significantly improved since the summer, when eurozone risks peaked because of German policymakers’ open consideration of a Greek exit, and the sovereign spreads of Italy and Spain reached new heights. The day before European Central Bank President Mario Draghi’s famous speech in London in which he announced that the […]

U.S. Has Been Let Down by Its Leadership

The deal reached in Washington on New Year’s day prevented the US economy from falling off the so-called fiscal cliff. However, given the dysfunctional nature of the American political system, it won’t be long before there is another crisis. Two months, in fact. If no action is taken by March 1, $110bn of spending cuts will commence. […]

Nouriel: Politics Will Define 2013

Speaking with Christine Freeland of the New York Times, Nouriel Roubini described the shift from a market focus on risk in 2012 to a worldwide recognition that political action—European elections, partisan U.S. fiscal battles, Middle East unrest, Chinese and Japanese political transitions—will shape the economic and financial landscape in 2013, contingent on unconventional policy responses […]

The Year of Betting Conservatively

The upswing in global equity markets that started in July is now running out of steam, which comes as no surprise: with no significant improvement in growth prospects in either the advanced or major emerging economies, the rally always seemed to lack legs. If anything, the correction might have come sooner, given disappointing macroeconomic data […]