Nouriel Roubini's Global EconoMonitor

RGE’s Weekly Roundup

Check out all of the RGE analysis and EconoMonitor contributions that were published this past week at

RGE Analysis [Available to RGE Clients Only]:

Nouriel Roubini and his team of analysts released RGE’s Q1 2010 Outlook, which examines trends in economic statistics, financial policy, and politics.  The Outlook contains RGE’s analysis of specific countries and regions; our global growth overview; special sections on commodities, global imbalances, and trade; and our macro forecast table outlining our GDP and CPI projections.  Please see Global Outlook Update: Q1 2010.

As concerns over Greece’s debt crisis continue to mount, along with the rest of the PIGS that face similar threats, European leaders are discussing possible courses of action that would stabilize the situation and minimize the risks of contagion and moral hazard. Without a deliberate and detailed plan, the risks are only heightened. Nouriel Roubini and Arnab Das describe their plan in the following RGE analysis; Will Europe’s PIGS Learn to Fly?

As to the jobs outlook in the U.S., there’s good news, and there’s bad news. The good news is that the leading indicators are pointing toward payroll gains, including average workweek and temporary employment. Also, manufacturing and several services are showing job gains. The bad news is that the economy is still shedding jobs, and the unemployment rate will increase going forward as discouraged workers reenter the labor force.  Read the following analysis and find out when RGE projects the unemployment rate to return to its structural rate.On the Verge of Job Creation by Christian Menegatti and Arpitha Bykere

Bertrand Delgado and Juan L. Maldonado analyze LatAm economic data.  Don’t miss:

Latin America: What’s Coming Up? By Bertrand Delgado

Latin America: Inflation on the Rise at the Beginning of 2010 by Bertrand Delgado and Juan L. Maldonado

Aluminum prices experienced a V-Shaped recovery in 2009 despite gross excesses in supply and production capacity.  Mikka Pineda forecasts aluminum pricing in 2010 and the long term in Aluminum Illuminations: Prices and Fundamentals.


On Nouriel Roubini’s Global EconoMonitor, Ian Bremmer and Nouriel Roubini note that many countries have serious debt issues and it is not isolated to Europe.  When the Federal Reserve raises interest rates to head off inflation, foreign investors and central banks will be willing to finance the U.S. only at higher yields, and this is where Sovereign Risk Meets Sovereign Reality.

Don’t miss Roubini Bloomberg Interview on Sovereign Debt and U.S. Outlook.


On the RGE Analyst’s EconoMonitor, Jennifer Kapila and Arnab Das react to an FT opinion piece by Bill Miller, which criticized investor preferences for bonds over equities by noting that there is Nothing “Perverse” about the Flight to Bonds.

Rachel Ziemba provides A Glimpse Inside the CIC’s Portfolio and presents some interesting trends that emerge from the data.

Mikka Pineda takes a look at Philippines first automated general elections and asserts that Automated Elections Do Not Automatically Make Philippines a Democracy.

Please see RGE’s Wednesday Note – Global Trade in Recovery by Arpitha Bykere


On the Finance & Markets Monitor, Barry Ritholtz separates primary and secondary factors, or causes  and exacerbators, for the current financial crisis.  Please read Causation Analysis: What “But Fors” Caused the Crisis?

In Bank Securitization Woes Only the Beginning, Yves Smith considers two unattractive choices: making the securitization market “less unsafe” or make it safe, which would require banks balance sheets to get bigger and would mean less lending overall.

In Another View: Looking Beyond the Volcker Rule, Daniel Alpert explains the Obama administration’s policy suggestions for financial regulation and offers a number of corollaries.

Also on the Finance & Markets Monitor:

Debunking Some AIG/FED/CDO Theories by Yves Smith

Who’s Killing Financial Reform? by Robert Reich

Goldman Sachs vs AIG by Barry Ritholtz


On the Global Macro EconoMonitor, while much of the world is focused on Greece’s solvency woes, Barry Ritholtz provides a sobering comparison with budget gaps in American States.  Please read Insolvent European vs American States.

In The Inflation Moderation, Rebecca Wilder concludes that the global inflation moderation is likely to continue.

In The New Banana Republics Antonio Carlos Lemgruber compares macroeconomic irresponsibility characteristic of Latin America in the second half of the last century with 20 countries today, and predicts that 2010 will see exchange rate “problems” coming back to the economic forefront.


On the U.S. EconoMonitor, David Altig wonders whether credit availability will become a more significant problem when demand begins to recover.  See Competing Histories.

In The National Anthem – And Why we Need Health Care Reform so Desperately, Robert Reich speaks of his own struggles with his health insurance policy.

In Limit Tax Expenditures, Jeffrey Frankel agrees with the general principle and discusses fixing housing policy, which he, as well as many economists, feels is a big problem, yet gets little attention.


On the Emerging Markets Monitor, Rebecca Wilder argues that the renminbi is at a “reasonable” value.  Please see I have to Side with China on this One.

In Jamaica: Start Jammin, Walter Molano considers Jamaica’s economic situation.


On the Asia EconoMonitor, Victor Shih looks into the debt level of local government investment entities and concludes that China did not accomplish the impossible.  Please read Looming Problem of Local Debt in China – 1.6 Trillion Dollars and Rising.

In Post-War Sri Lanka: Will the Economy Take Off? Tilak Abeysinghe notes that without political stability and good governance, the Sri Lankan economy is unlikely to see a sustained growth trajectory.


On the Europe EconoMonitor, Michael Arghyrou and John Tsoukalas describe their plan for the EMU in The Option of Last Resort: A Two-Currency EMU.

Don’t miss:

How Far Will the PIIGS Fly by Paolo Manasse

Reigniting Growth in Emerging Europe by Marek Belka

6 Responses to “RGE’s Weekly Roundup”

PeterJBFebruary 12th, 2010 at 6:36 pm

Well, er, speaking of things that should be of interest to all those that think that their opines count for something:”The conscious and intelligent manipulation of the organized habits and opinions of the [public] is an important element in democratic society. Those who manipulate this unseen mechanism of society constitute an invisible government which is the true ruling power of our country.” Edward BernaysWow…”Let us never tolerate outrageous conspiracy theories concerning the attacks of September the 11th; malicious lies that attempt to shift the blame away from the terrorists, themselves, away from the guilty.” George W. BushGee Whiz”It is also important for the State to inculcate in its subjects an aversion to any “conspiracy theory of history”; for a search for “conspiracies” means a search for motives and an attribution of responsibility for historical misdeeds. – Furthermore, an attack on “conspiracy theories” means that the subjects will become more gullible in believing the “general welfare” reasons that are always put forth by the State for engaging in any of its despotic actions. A “conspiracy theory” can unsettle the system by causing the public to doubt the State’s ideological propaganda.” Professor Murray N. Rothbard -Really…and,”The three aims of the tyrant are, one, the humiliation of his subjects; he knows that a mean-spirited man will not conspire against anybody; two, the creation of mistrust among them; for a tyrant is not to be overthrown until men begin to have confidence in one another — and this is the reason why tyrants are at war with the good; they are under the idea that their power is endangered by them, not only because they will not be ruled despotically, but also because they are too loyal to one another and to other men, and do not inform against one another or against other men — three, the tyrant desires that all his subjects shall be incapable of action, for no one attempts what is impossible and they will not attempt to overthrow a tyranny if they are powerless.” AristotleWhat is above is not the human nature of the individual who thinks for him/herself and which interacts with knowledge in a dynamically energetic manner, that is, in a complicit manner, butit is the nature of the collective; the club, the Party, the Government, the paradigm, the cocktail party, the meeting, etc., etc, or that place and hideous beast to which individuals have, a priori, sacrificed some of their soul and their morality, the important and vital bits, so that this beast controls every emotion and thought of all those individuals that eagerly wish to sacrifice more – of themselves, just so that they too, can be sacrificed; this is termed under-standing; nothing new here as this practise is hoary with antiquity!Courtesy of The Information Clearing House.A real and reliable Super Computer can never derive its data from consensual and sanitized data; it must feed upon anomalous data input, a priori. And Yes, a computer can easily obtain full and superior conciousness but the real question is, can a computer, no matter how superior, obtain the spirit of the heart of the individual or that man of the wild; not the domesticated ones , that is, that unique man who stands alone and thinks for himself. I think not. Stomachs and Man.Keywords: stupid | sacrifice | stupid | “leadership” | Aristotle | Bernays | Bullsh&t | profound |Ho hum

PeterJBFebruary 12th, 2010 at 8:53 pm

I have received this morning, since this last post, a question as to who comprises this “invisible government” (see Bernays above):These “invisible governments” are compromised of everybody; everybody, that is, that sacrifice their individuality and join the consensus; Yes, in everything. Everybody that isn’t a “heretic” where, a “heretic’ is one that questions everything!The “invisible governments” take on their own consensual belief system which is also unique and not common to any human individual. This “invisible government” acts out the role of its own developed paradigm, which suits nobody but those that wish to serve by sacrificing themselves, er, unknowingly.And, the Supreme Court was right in legitimizing a new species of human being by proxy, by default and by consensus; a corporation which is by definition a collective, BUT the Supreme Court is wrong scientifically (obviously, surely?) and based its decision on opine, that is, the opine of the “invisible government”, or nobody in particular but everybody specifically.Why? Because collectivism IS a Universal Principle while being human, is, like the metal or mineral chain, Gold, is the end and culmination of a unique Cause, like the Apex of the Pyramid, albeit not yet complete; an Effect, where each is an unique complicit creation.Man is a qualitative complicit singularity arising from a quantitative and qualitative complexity where collectivism is merely collectivism, albeit an Universal Principle and certainly not ever unique!Collectivism are those of Plato’s Cave with warms, tinglies and gnats; where Man holds the potential of a God and this is a scientific fact!And Obama is wrong where he described these corporate Heads as entrepreneurs. They are not entrepreneurs, they are servants and stooges and trained seals. They are the willing and obedient tools of the “invisible government” which comprise a social fungal parasite that permeates human society which can only be exhausted and then eradicated by human beings becoming “HERETICS”.Ho hum

PeterJBFebruary 13th, 2010 at 4:11 pm

When “leadership” is stupid and inept, you must always expect to pay the premium for their services:”Widespread poverty and human misery is now seen on a massive scale in the so-called developed world. Some 40 million Americans, for example, are subsisting on food stamps. The distinction between “developed” and “developing” economies (always a myth anyway) is blurred. The ranks of the world’s long-suffering poor are swelled with dispossessed blue and white-collar workers and their families from across the US and Europe. Together more than ever, they stand shut out from those gated havens of obscene wealth for a global minority.””Similar historic junctures have been witnessed before when capitalism floundered from its inexorable tendency to make the rich richer and the poor poorer. Disturbingly, the release valve for the system and its bankruptcy has always been war. Death and destruction is the lender of last resort to an economic system that – despite itself – inevitably polarises wealth to an unworkable degree. The First and Second World Wars – claiming more than 70 million over a period of less than 10 years lives – were effectively the ultimate, grotesque bailouts.”You also have to ask the question ‘is this the only option, really?’, just because they are dumb and intellectually challenged, remembering that you voted for them because they were “cute” and spake nice warm lies!”Recall former British Prime Minister Margaret Thatcher’s arrogant assertion: “There is no alternative”. Likewise, US President Barack Obama insists on throwing billions more dollars at the banks and financiers on Wall Street.”Or, if you like – from the hustings it should have gone as follows: ‘If you vote for me I promise that if I cannot solve the problems, which I can’t because I am really stupid, I will immediately give all your money to the Banks and go and kill a few million kids and the mothers and those old folks, you know, somewhere in the World, which is convenient at the time,’ (read: roars, screams and cheers and applause), continuing (in loud and resonant rhetoric), it is time to bring the unfortunate World down to our level of stupidity (screams continuing). really gets it, do they?Keyword: stupid | “leadership” | stupid | incompetent | stupid |Ho hum

PeterJBFebruary 13th, 2010 at 4:51 pm

Wow: A new PC term: really? er, [“constructive ambiguity”]”There was an element of bluff in Thursday’s accord, as if the EU leaders hope to muddle through with “constructive ambiguity”, fingers crossed that their vague political pledge will never be tested. Bluff is a valid tool of statemanship, but in this case their bluff could be called very soon”Sure, h’mmmm, er, and then, “…political will”.”Euro area member states will take determined and co-ordinated action, if needed, to safeguard financial stability in the euro area as a whole. The Greek government has not requested any financial support,”SOL (and, wetting my pants from laughing so hard;-)>'Global Economic Collapses’ are just so damned entertaining, fascinating comedy and really, great fun… solHo hum

PeterJBFebruary 13th, 2010 at 8:35 pm

Warning – Warning – WarningSadly to say that the push to control and censor the Internet by “leadership” throughout the World, in an affirmative consensus, is gaining strength and velocity, by the hour.This is your “invisible government at work. These are the folks that brought you the Global Economic Collapse, the wars in Europe, Vietnam, Japan, Korea, Iraq, Afghanistan and just about everywhere; Misery Inc., (where misery just loves company to feed upon) – these wars to release the stresses brought about by their default inability to comprehend ‘governance’, the ineptitude in their understanding of socio-economics, their embarrassment arising from their incompetence and stupidity making it into the public domain. Or, “leadership” knows itself to be incompetent and stupid but they don’t want you to know.It is time for the revolution:It is time for every man, woman and child to become a Heretic and question every thought, every word, every motion, every act, every book, every statement and ponder why?There can NEVER be ANY Ideology! Life is an irrational dynamic.Only believe your own heart!It is time for all men to arise to his/her potential, to his/her intellect, with humility and compassion, to Man-hood, as it is so written, in words, hoary with antiquity.It is the time for the peaceful transition from the wholesale insanity of slaughter, murder and destructive policies of popularized morons and crazed ideologues, to the realities of the capacity of self and the creative and innovative abundance that applied intellect will bring to mankind.It is the time to become the Heretic, or IOW, Man.Do your own research (Google ‘war Internet UN Censorship’) your mileage will vary, because you are each an unique intellectual phenomenon by creation.Ho hum

PeterJBFebruary 13th, 2010 at 9:04 pm

The control and dumbing-down of the global population through censorship of the Internet by Misery Inc., your “invisible government”:”Under the guise of “protecting Americans” and choosing itself in so-called “national security,” the current Obama administration wants to be able to control the ability of people and organizations to access the Internet.””This concept on its face seems very harmless and in the best interest of the country, however, having the ability to “turn the Internet off or shutting down sites that Obama considers “dangerous” including particular political groups, individuals or organizations who espouse differing views has far reaching political, financial, moral and legal implications.””Such a policy imposed under Executive Order to control what enters Internet sites and what is shared daily would stifle free speech in direct violation of the First Amendment rights of all Americans.” the links yee Heretics all!Ho hum