Comments 26

重温2008？

Mar 2, 2016 Nouriel Roubini

纽约—最近我最常被问道的问题是：我们回到了2008年，将迎来又一场全球金融危机和衰退吗？

我的回答直截了当：不。但最近的全球金融市场动荡可能比2009年以来的所有波动和避险时期都要大。这是因为，目前至少有七大全球尾部风险源——而不只像近几年那样只有一些单一因素——欧元区危机、美联储的“削减恐慌”（taper tantrum）、希腊可能退出欧元区以及中国经济硬着陆等——助长波动性。

首先，对中国硬着陆及其对股市和人民币价值的可能影响卷土重来。与硬着陆相比，中国更有可能发生“颠簸”着陆，但投资者的担忧并未就此平息，因为增长减速在持续，资本外逃也没有停止。

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Nouriel Roubini

Writing for PS since 2007
125 Commentaries

Nouriel Roubini, a professor at NYU’s Stern School of Business and CEO of Roubini Macro Associates, was Senior Economist for International Affairs in the White House's Council of Economic Advisers during the Clinton Administration. He has worked for the International Monetary Fund, the US Federal Reserve, and the World Bank.

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0 Comments on this paragraph, 37 in all 37 Comments on this article

Chris Cowsley Mar 14, 2016

Makes you wonder about the meaning of 'tail' in 'tail risk'.
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Jim Tucker Mar 13, 2016

This, by the way, is what the death of neoliberalism looks like.
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Rob Carter Mar 10, 2016

In war and post-war times it is reasonable as GATT intended to develop World trade to each Nation's capacities in domestic demands and domestic disposable incomes, there was perhaps even a place for some automation, but as in the 1500's yers of the sabot, wooden shoes or clogs first in Farm & early processing automation sacking labor and lowering disposable incomes for necessities even, never mind luxury no chance of growth. Hence the coining of the English words Sabot-age and clog-ging as they threw their sabots, clogs into farm, spinning weaving and milling machinery for "Clog-ging" the works. This repeated later 1500's 73 onwards for industrial machines as today is needed.

Surely we can realize the war monkeys have emerged from the jungles with cheaper labor to operate the later technologies we all transferred and sold them and now they are competition we can not defeat. Thus we can not rely on "Trade" Diplomats b/s rhetoric & lies to sell from our older still amortising and depreciating technology. The World is simply running out of demand and that is just being replaced with ever growing debt and fiat sovereign currencies. It must end this incessant reliance on trade and we must all tend to raise our own domestic demand and disposable incomes for that which means Democratic Revolution return of sabotage to sack the automation and return man to work, perhaps shorter working hours will help, the collective bargains won drop from 60 to 48 hour week then 40 and some 35+ hour weeks. Certainly as this article points out:-
"Fifth, the decline in oil prices is triggering falls in US and global equities and spikes in credit spreads. This may now signal weak global demand – rather than rising supply – as growth in China, emerging markets, and the US slows.
Weak oil prices also damage US energy producers, which comprise a large share of the US stock market, and impose credit losses and potential defaults on net energy exporting economies, their sovereigns, state-owned enterprises, and energy firms. As regulations restrict market makers from providing liquidity and absorbing market volatility, every fundamental shock becomes more severe in terms of risk-asset price corrections" be warned.
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Godfree Roberts Mar 9, 2016

" worries about a hard landing in China and its likely impact on the stock market and the value of the renminbi have returned with a vengeance."

Those worries have never left: since 1975 The Economist has predicted 56 'hard landings' for China's economy. Western media have concocted perhaps 100,000 such 'warnings'. They demonstrate, if nothing else, the utter failure of Western economics as a predictive tool.
They also demonstrate China's unmatched mastery of predictive economics – a discipline which they invented, obviously.
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John Doyle Mar 9, 2016

Mr Roubini, did you help Clinton get budget surpluses in his White House years? Did you think that was a good thing? Or did you understand budget surpluses take away savings from the non government sector, thus causing the 1993 recession that George Bush faced?
Do you understand that EU problems are 100% a result of neo-Liberal policies built into the various treaties that are the EU basis for its economy? Greece is a sobering result of neo-liberal intransigence on the part of the Brussels crowd. In fact the EU is doomed without a drastic renegotiation of treaty articles. Neo liberal policies strip out benefits from the poorer strata of society. That is a big part of Eurozone disfunction.
So the problems in the world today are much more political in nature than economic, though both matter a great deal.
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Bakhodur Eshonov Mar 7, 2016

Yes, but shouldn't all these and other factors considered not just in the context of short-term dynamics, but some longer term trends associated with more fundamental, tectonic changes rooted in global production and consumption patterns? The West has been too long dependent on China’s savings and investment. China meanwhile kicked off its move from producing of consumer goods to investment goods. What the West can offer now to China? Money? Technologies? Markets? To realize its ambitions China will have to generate markets for its products which could serve the same role of China as India was playing for UK back in 17th century. Demand for products from China should increase 2,4 times. But for a country with the population exceeding 1 bln. it might be challenging to find markets of such ‘consumption capacities’. New initiatives of China (Asian Bank for Infrastructure Investment, Economic Belt of the Silk Road, etc.) should be considered as elements of a longer term strategy to create ‘new markets’ and new consumers in Asia and Pacific, in Middle East, in Africa. This new global production and consumption pattern with new flows of goods and capital generates new networks of value chains, re-distribution of added value and fosters a new global political economy.
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Philippe Roger Mar 7, 2016

Yes, despite the depressing list of tail risks, this is not 2008. 2008 was a first and foremost a financial system crisis, where the banking system was over leveraged. It came after years of banks optimising their leverage for profitability. Not only the reported leverage was much higher than now, off balance sheet vehicles and inadequacy of ratings versus risks created a vast misallocation of capital. The subprime mortgage losses, amplified by some over engineering lit it all up. This is not a repeat for the banking system.
Now, this is not 2008. But this does not necessarily mean that one or many of the listed tail risk won't lead us to an even worse outcome. I don't think this can be ruled out. But it would be misguided to analyse the current environment with the 2008 playbook. It is 2016. It is different. For better or worse we shall see.
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Michael Muoio Mar 6, 2016

The Fed has failed badly and we expect more of the same. Over 9 years of rate decreases and they are attempting to create inflation? It seems their real measure of success is a pumped up cyclically adjusted PE on the S&Ps. 100+ years average at 16.6X and we are at 25.3X. perhaps we are really looking at a 35-40% reduction as I have ni idea where these "future earnings" are coming from as economies continue to melt down. Here is a thought move the Fed rate to 3.5%, deal with the blow-back and print 3% more money every year and go fishing. Real recovery would come sooner than the nonsense they are currently producing.
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enrique titos Mar 6, 2016

Dear Sir, when reading he list of your worries, which seem to me broadly correct, I cannot agree with your straigthforward no, as there are too many key/not so much tail risks. 2008 was basically an excercise of loss recognition which led to financial system reconfiguration in many countries and massive QE. Now the central banks armoury is quite exhausted, debt levels at record high, and problems arise everywhere as you pointed out. I cannot see bu complacency in your judgement. Am I missing your point? Thanks
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Steve Brant Mar 6, 2016

Perhaps it is time we looked at using Systems Thinking (Deming, Ackoff, et al) to develop a redesign for our global economic system... what kind of ideal system we would have if there we no constraints... not just think about incrementally improving the system we have. I wrote about this in late 2008, when the last big crisis first began...

http://www.huffingtonpost.com/steven-g-brant/capitalism-is-dead-now-wh_b_127016.html
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rc whalen Mar 6, 2016

Bravo Nouriel. The end of Fed open market asset purchases, and related capital markets and economic distortions, has inadvertently created a new period of debt deflation that is affecting the entire global economy. The unwind from the Fed’s latest monetary policy actions has caused credit spreads to explode, cutting off many sub-investment grade issuers such as consumer lenders and funds among others from effective access to the capital markets. How is this helpful? Fed and ECB need to understand that manipulating credit spreads has a cost, perhaps even negative tradeoff. See "Non-Bank Mortgage Firms, Credit Spreads and Liquidity"
https://www.krollbondratings.com/show_report/3863
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douglas ungredda Mar 6, 2016

THere also a risk factor that is not being commented and its the excessive dollar strength which may deflate the American economy to a crisis point, spelling more trouble. As the US exports oil surpluses abroad these exports spell trouble to oil exporting countries in volume terms and in price terms. As the dollar valuation keeps increasing oil prices decrease but the dollar valuation threatens America' s export competitiveness abroad vis an increasing group of developing countries whose commodity export base is threatened, meaning less fiscal income. The excessive dollar strength spells disaster. More so if Donald Trump and his protectionist proposals become policies.
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Per Kurowski Mar 6, 2016

And EIGHT the distortions in the allocation of bank credit t the real economy has not been corrected, worse they are not yet even discussed.

http://subprimeregulations.blogspot.com/2016/03/the-bank-regulators-of-basel-committee.html
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Douglas Leyendecker Mar 6, 2016

"The policy mix is suboptimal, owing to excessive reliance on monetary rather than fiscal policy."

Maybe I'm just out to lunch but why has every economist out there not seen the two other policy infrastructures that can influence economy? Tweaking these can be either expansive or constrictive economically.

Industrial and social policy are themselves tools that governments can use to move the needle but for some reason everyone seems to think it's ONLY about money. Today we have constrictive industrial policy in order to theoretically save the planet and constrictive social policy that favors entitlement over empowerment.

There are ways to change economic outcomes other than borrowing and printing more money.
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Iqbal Halani Mar 6, 2016

There is a powerful antidote that prevents any recurrence, the oil/gas price reduction is a £3 TRILLION boost to the global economy, and the additional economic activity resultant from reduced fares,costs,etc.
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Wim Nusselder Mar 6, 2016

Dear Nouriel Roubini,
You make me wonder why you answer "a straightforward no" on the question whether we are seeing (the start of) another global financial crisis.
Were the causes of the 2008 crisis (really) plagues like the seven ones you list now?
If so, why don't these add up to causing a new crisis?
If not, are you looking in the right direction to answer the question whether this is the start of a new global crisis?
Wim Nusselder, controller & knowledge broker @ The Broker (www.thebrokeronline.eu)
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Avraam Dectis Mar 6, 2016

.
Interesting analysis, may I add:

1) No country that has joined the EU has ever been attacked or lost territory. The trade repercussions may be more of a deterrent than any military capability.

2) Since expansive fiscal coordination seems impossible, the answer may be that the ECB has not been unconventional enough.

A simple program of Central Bank Dividends - a per capita direct gift from the European Central Bank to each eurozone national treasury might do wonders for current stresses.

An example CBD would be to deposit 1000 euros times the number of citizens in each eurozone country at each country's central bank - to be used only to pay off debt. Greece would get roughly 11 billion, Germany roughly 90 billion, etc.

These relatively small infusions could be repeated as needed, to allow debt reduction and decrease austerity calls. Inflation might not result since we have seen that QE does not stoke inflation.

CBD would make make the eurozone attractive.

To get around rules against monetisation, call it a dividend for superior performance in restraining inflation. No EU rules against dividends.
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- John Doyle Mar 9, 2016
  
  Your idea is a variation on a Debt Jubilee. Sages like Steve Keen have proposed something similar to reduce the private debt level. Public debt is not a problem. In fact the more the richer is the nation on this score. No, private debt levels need to be cut down and this sort of helicopter money, which is completely free to the government can help.
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- Avraam Dectis Mar 7, 2016
  
  .
  Thanks again George and let me add one more thing.
  
  Your suggestion that one trial of CBD is a very good one because CBD is like QE in the sense that it is not currently accepted as an acceptable act by monetary authorities but it's very success will make it so.
  .
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- Avraam Dectis Mar 7, 2016
  
  .
  Thank you very much George SOS!
  
  I greatly appreciate all comments, especially the positive ones.
  
  The nice thing about CBD is it diminishes the power of the debt holders because it diminishes the debt.
  
  Another nice thing is it does not make any country pay the bill for another country. The CBD would be paid to every eurozone country, based on their population. This avoid the negative psychology and resentment caused by one set of taxpayers feeling imposed upon to help another set of taxpayers.
  
  For the eurozone, CBD is much better than QE.
  
  Imagine how brilliant it would be if the eurozone wide debts could be reduced without inflation. Suddenly it would be more acceptable for expansionary fiscal policies to be employed.
  
  This is exactly what would happen too. The brilliance of QE was that it proved that central bank money could be used to buy debt without inflation risk. CBD does the same, but also extinguishes the debt.
  
  It is the spending which causes inflation. If the spending does not cause inflation, paying off the resulting debt will not cause inflation, regardless of where the money comes from.
  
  PS - I should probably add that I am an American of Greek and Cypriot heredity, so I am concerned about bad eurozone policy. I should also not that I spent the last 19 years being poisoned by an American stalker gang while not being able to interest the police, so there may not be too many more comments from me.
  .
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- george sos Mar 7, 2016
  
  Avraam Dectis brilliant idea.!!My worry would only be the assumed intention of the "investors" to get their money back with as much interest as possible(since they seem through the OECD to press for what they call "structural change" which in fact are ways to expand their grip on the fin."market"),and how this materialises through the institutions they have total control over(banks).....(yes we are a mess,and only real solution would be building from scratch.but that s not likely to happen:))..
  In any case ,i d support your idea,even if it was just to test it.Sounds to me a lot better than al the ecb/imf/oecd plans.)
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- M M Mar 6, 2016
  
  Solutions to the problems exist, what is lacking and has been lacking for quite some time is the “Goodwill” to execute any rational solution.
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Ariel Tejera Mar 5, 2016

Want to mention too: The rising conflict between Turkey , Kurds, and Russinas, amidst the Shia-Sunni war, complemented by any unseasoned new US president - that is scary.
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Ariel Tejera Mar 5, 2016

Sir, great article, it made me remember Dante's Divine Comedy. Everybody's sins are after them, with the difference that, in our worl,d there's a lot of collateral damage.
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ROHIT CHANDAVARKER Mar 3, 2016

Playing devil's advocate,
1. China's economy is undoubtedly slowing & reserves depleting. But the US would have to hand hold China for its own good & soften China's landing. Also, China's conscious efforts to restructure its growth model from infrastructure led growth to consumption led would yield results in the medium term.
2 Emerging markets are in trouble but India stands out. The depressed oil & commodity prices would reduce input costs allowing India to grow faster. Domestic demand would pick up though exports would lag behind.
3 US growth is sluggish & the Fed decision to hike the Fed rate lst year seems to have been premature. However, one might see reasonable recovery in the second half in an election year. Any rise in oil prices would benefit US energy companies resulting in higher equity prices of oil companies.
4 The Middle East crisis is unlikely to end soon though oil price concerns has exercised the regimes. After announcing a output freeze last month, OPEC seems inclined to cut production next month. This would push up crude prices & stock markets as there is a strong correlation between crude price & stock markets today. Iran has entered the crude oil market & it would be in everyone's interest to push up prices by cutting production.
5 Globally banks are in poor shape led by European banks. The coco bonds are likely to keep many bankers worried despite an expected meagre economic recovery.
6 The possible breakup of European disintegration would probably come due to Greece & unlikely from Britain. Brexit is unlikely to go through thereby strengthening the union. Brexitwould inflict huge losses, both economically & politically, while there would be little returns. Britain's trade deficit might have emboldened London to attempt at browbeating Europe but the fact is Britain's exports are in service sectors requiring Britain to individually negotiate trade agreements, a cumbersome exercise. Any expectations of concessions can be ruled out as similar agreements with non-EU members like Switzerland & Norway would force EU to accord similar treatment to them. Accepting EU conditions would be disastrous as many of the clauses would impinge on domestic law making. EU exports to Britain would be largely unaffected as mechandise expors come under WTO rules. However, one major problem that haunts Europe is the immigrants crisis that threatens to engulf Europe leading to social unrest like what has been reported in Sweden followed by possible repercussions may EU countries.
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Fung Fui Mar 3, 2016

Sir, boiling 7 eggs together in a pot doesn't create one big egg. If you recall the recent economic crises -- 98 Asian, 2000 dot-com & 2008 GFC -- they were fueled by bubbles that most people didn't see them coming (that's what makes them bubbles).

This time round, everybody is aware of everything. The pricing of assets have been carefully factoring in the problems you raised. Stocks in China and other emerging markets have fallen drastically. People know about them, unlike 2008.

My argument to your seven sources of tail risks:
1) H-Shares index has already fallen more than 40% from its peak and traded at low P/E & P/Book multiples. That's bad enough to not have another huge shock.
2) Similarly, the emerging-market stocks have already taken a serious hit. Should we expect another 50% plunge?
3) In the case of U.S., I'm more likely to trust Warren Buffett because he has been mostly correct in the past 50 years.
4) No comment, geopolitical risks have been and will always be around us.
5) Energy sector accounted for only 7% in the S&P500. The americans are clearly enjoying higher disposable income now and spending happily on Amazon and iPhones. While the credit risks are definitely a concern, the magnitude is far smaller than the housing debts in 2008.
6) Most banks around the world are still traded at low P/Book valuation, efficiently factoring in your concern of low returns. Downside risk is definitely much lower than 2008.
7) Grexit, again, is not something new. Though the downside risk is still not small, it is no longer catastrophic too. Troika bought enough time to cool it down.

Sir, unless you tell us something new, I don't think we are heading towards any catastrophic event. The markets are not hot enough to warrant another shocking crisis.
- Jose araujo Mar 3, 2016
  
  Good points...
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Paul Daley Mar 2, 2016

Amusing. Financial markets have been walking on air ever since central banks decided that it somehow made sense to fund current account deficits through a steady increase in asset prices. Now that those banks are running out of puff, market watchers like Roubini are complaining about all the crosswinds arising in the real economy and out of political developments. Hence his prayer for one last monetary gasp from somebody somewhere.

Better he should remember what George Schultz used to say: if something is unsustainable, it's going to stop. That's as true of price manipulation in asset markets as it is anywhere else. The only questions are how and when the end comes, and whether central banks are prepared to manage a transition in which asset market developments threaten to become a burden to the real economy. Common sense prudential measures and channels for central bank lending to the real economy is what is needed now.
- Jose araujo Mar 3, 2016
  
  Paul, can you please explain the connection between monetary expansion and asset prices?
  
  You realize that Central Banks don't buy stocks, and Banks are also not buying stocks...
  
  Most of the money is going into Bonds, Reserves and Sovereign Debt.
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- Michael Public Mar 3, 2016
  
  Nice summary.
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M M Mar 2, 2016

I agree with my fellow commentator below, we may have never left 2008. There is another very important dimension which has been lurking in the background for quite some time and that you did not mention in your article and that is “Germany”. An article today in the Business Insider by J. Garber mentions that Germany itself could be Europe’s next problem because it might have to bailout the Italian and Spanish Banks that are sitting on €billions (running in the €100 of billions) of non-performing loans. Where has Schäuble been all this time, possibly chasing the wrong goose?
- Robbie Jena Mar 3, 2016
  
  I agree about Italian and Spanish Banks ...I have friends in Spain that say the same thing...Thank you.
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- Jose araujo Mar 2, 2016
  
  Germany could be the problem for Europe because of Detsche Bank, and to the fact we don't really know the quality of the assets on the European Banking System.
  
  Remember the amount of the CDR's sold, the currency exchange swaps... well there is a feeling that both German and Swiss banks are behind it...
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Steve Hurst Mar 2, 2016

Some of these events are considerly less likely than others. As far as 2008 goes, we are still living with the outcomes of 2008. In some rrespects we have never left 2008
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Jose araujo Mar 2, 2016

Someday Roubini will get it right again, and then return to the spotlight claiming he predicted this one too.

Next time, just save us the trouble of reading and just write only your name, we know what you are going to say.
- Luis A. Guerra Mar 8, 2016
  
  Yep... big R is now main street and hence careful with his comments though I have the feeling that he is still sharp on his analysis... Can't wait for the come back.
  By the way, when the last remnants of Glass Steagall when down and investment bankers became banks with access to free money from the Federal Reserve it signaled a stock market open season and hence unreliable asset valuations... real economy banks may not be players in the stock market but investment bankers sure are (Both formal and OTC black holes).
  In any event, any economic projection is just an exercise of guessing based not on fact but on perception because we are sailing uncharted waters now and everything that will happen from here on will be new. I am afraid that trying to look for answers in the past while perhaps helpful from a methodology stand point it might very well be a futile exercise.
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dan baur Mar 2, 2016

No wonder they call you Dr Doom. This is the only tune you know. Just admit you can't predict the future.
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