Nouriel Roubini's Global EconoMonitor

Roubini Topic Archive: Government Bonds

  • Nouriel on Draghi’s Plan: It Could Weaken EUR in Longer Run

    Nouriel speaks on Bloomberg about Mario Draghi’s bond-buying plan, the future of the euro and the Fed’s plans this week and ahead of the election. Roubini: Here’s My Blueprint for the Future

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  • Business Insider: What Meredith Whitney Could Learn From Nouriel Roubini About Making Big Economic Predictions

    From Business Insider:

    “The rule on staying alive as a forecaster is to give ’em a number or give ’em a date, but never give ’em both at once.”–Jane Bryant Quinn, Reader’s Digest, 1 Dec. 1980

    Meredith Whitney broke the rule.  This now haunts her to the point that she declined to appear before a Congressional committee that wanted to discuss Muni default issues.  Nouriel Roubini is a skilled economist.  He knows this rule.  He, therefore, used modifiers to adhere to it.

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  • Reuters – Japan to Ease Monetary Policy Further: Roubini

    Reuters — Nouriel Roubini, best known for predicting the U.S. housing meltdown, said he expects Japan‘s central bank to ease monetary policy further by buying more government debt in the wake of the earthquake. Roubini, one of Wall Street’s most closely followed economists, said the Bank of Japan (BoJ) would have to set aside more […]

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  • Nothing “Perverse” about the Flight to Bonds

    The renowned CIO of Legg Mason, Bill Miller, has written an opinion piece in the FT today, criticizing investor preferences for bonds over equities, as demonstrated by the re-direction of equity fund flows toward bond funds. He believes that things are getting better, based on GDP numbers, credit spreads, and the level of bond re-financing. These are not, in our view, good indicators. GDP figures are, at best, inconclusive; the inventory cycle contributed 3.4 pp of the 5.7% Q4 GDP number and the other 2.3 pp is likely substantially stimulus-related. Furthermore, we could expect support from net exports to decline thanks to the rally in the dollar and the underlying causes of the risk aversion that drove it, i.e. the need for demand hitting fiscal adjustment in the eurozone periphery. Credit spreads have been distorted by extraordinary liquidity measures and a lack of imposed losses on debtholders and the level of bond re-financing reflects manufactured and unsustainably low rates. A constructive view on equities, in our view, necessarily assumes above-average inflation and good growth and underestimates the risk of a double-dip. This assumption stands in stark contrast with RGE’s forecast for anemic growth in the developed economies and glosses over significant slack in labor markets and excess capacity across sectors and regions.  

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  • Sovereign Risk Meets Sovereign Reality

    Editors Note – This Wall Street Journal Op-Ed is drawn from a more extensive piece of research, How to Avoid a Greek Tragedy in Europe, provided earlier this week to RGE’s clients.  

    After months of shrugging off debt problems in Dubai, Greece and other smaller economies, markets yesterday seemed suddenly aware of the risks of sovereign default.

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  • RGE’s Wednesday Note – The Carry Trade in 2010

    A couple months ago, in a widely read FT op-ed, Nouriel Roubini warned that the “mother of all carry trades,” one funded in U.S. dollar denominated debt, could pump up asset bubbles around the world. This Monday RGE released two new reports, both available exclusively to clients, forecasting where and how this trend might unfold. Our macro analysis, “Carry Trade Hotspots: A Currency-by-Currency Forecast for 2010,” estimates the interest rate paths and currency trends for several potential carry trade funding and recipient currencies. RGE’s strategy team then looks at implications of these potential rate moves for investors in a parallel analysis, “Come to Mother: An RGE Strategy for the 2010 Carry Trade.”

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  • Asset Price Co-Movements and the Dollar Carry Trade

    The ongoing dollar carry trade has recently come to the forefront of the international policy debate (Roubini, 2009). Capital inflows to emerging market countries have put pressures on some currencies, and authorities have responded by slowing the pace of appreciation, in some cases by capital controls. This short article uses a GARCH framework to examine […]

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