Rajeet Nabha's Public Library

tempting thing to do,” he said. “But you have to pick the right analogy. The danger of this more subjective approach is that instead of letting the objective facts shape your views, you will choose the facts that confirm your existing views.”
He agrees, for example, with the conventional economic wisdom that oil will drop below $100 a barrel in the coming months as global demand weakens. “I’m not comfortable saying that we’re going to end up in the Great Depression,” he told me. “I’m a reasonable person.”
9 more annotations...
- He applauded when the Federal Reserve cut interest rates to 2 percent from 5.25 percent beginning last summer. He also supported the Fed’s willingness to engineer a takeover of Bear Stearns. Roubini argues that the Fed’s actions averted catastrophe, though he says he believes that future bailouts should focus on mortgage owners, not investors.
- either the government backs up a trillion-plus dollars’ worth of high-risk mortgages (in exchange for the lenders’ agreement to reduce monthly mortgage payments),
- the true cost of the housing crisis
- but something between a trillion and a trillion and a half dollars.
- credit-card debt, student-loan debt, auto loans, commercial real estate loans, home-equity loans, corporate debt and loans that financed leveraged buyouts.
- shoddy underwriting, securitization, negligence on the part of the credit-rating agencies and lax government oversight. “We have a subprime financial system,” he said, “not a subprime mortgage market.”
- Our biggest financiers are China, Russia and the gulf states,” Roubini noted. “These are rivals, not allies.
- “Once you run current-account deficits, you depend on the kindness of strangers,”
- “This might be the beginning of the end of the American empire.”

Dr. Doom - Profile - Nouriel Roubini - Predicting Crisis in the United States Economy - NYTimes.com

He predicted that foreign investors would stop financing the fiscal and current-account deficit and abandon the dollar, wreaking havoc on the economy. He said that these problems, which he called the “twin financial train wrecks,”

www.nytimes.com/...17pessimist-t.html - Preview

oubini became convinced that the housing bubble was going to pop.
He predicted that foreign investors would stop financing the fiscal and current-account deficit and abandon the dollar, wreaking havoc on the economy. He said that these problems, which he called the “twin financial train wrecks,”
4 more annotations...
- Econometric models typically rely on the assumption that the near future is likely to be similar to the recent past
- models anticipate breaks in the economy.
- ike a full-blown financial crisis.
- bothered to study financial panics.

'Most Accurate Economist' receives Lawrence R. Klein Award | ASU News

The Lawrence R. Klein Award ceremony will be held at the University Club in New York on Oct. 21 at 6 p.m. Randell E. Moore, executive editor of Blue Chip Economic Indicators, will be among those attending. Goldman Sachs top economist most accurate

asunews.asu.edu/05_business_lawrencekleinaward - Preview

Jan Hatzius

SpiceJet May Raise $50 Million; Plans Flying Overseas (Update2) - Bloomberg.com

fund expansion and start international flights

www.bloomberg.com/...news - Preview

tap overseas travel demand
bigger rivals
including Jet Airways (India) Ltd. convert more of their local
flights to low-fare services
7 more annotations...
- when it completes
  five years of operations in May and has a fleet of 20 aircraft.
- Jet Airways has two-thirds of its domestic capacity under
  the low-fare brand JetKonnect.
- Air India Express brand.
- about 85 percent of the
  total airline seats on offer in the next 12 to 24 month
- Binit Somaia, South Asia
  Director at Centre for Asia Pacific Aviation
- 26 by January 2012 from
  19 Boeing Co. planes now, Aggarwal said.
- expects to break even in the fiscal year ending
  March 31

India Sets Stage for Rate Increase as Focus Shifts to Inflation - Bloomberg.com

India raising interest rates in jan, RBI Chief, Reserve Repurchase Rate, Cash Reserve Ratio, Indian central bank Governor Duvvuri Subbarao

www.bloomberg.com/...news - Preview

“Inflation is like a tax on the poor.”
decline in auto-loan rates and increased spending by
the government spurred.
10 more annotations...
- government announced tax cuts
  and the central bank cut rates and injected cash into banks
  since September last year
- The revival in Indian
  stock and global financial markets will spur investment, he
  said, maintaining a growth forecast for India’s $1.2 trillion
  economy at 6 percent “with an upward bias.”
- He raised the inflation estimate to 6.5 percent from 5
  percent by March 3
- reverse repurchase rate at 3.25 percent
- the repurchase rate at
  4.75 percent and the cash reserve ratio at 5 percent
- central bank to rely on higher cash reserve ratio to contain
  inflation before raising interest rates.
- Goldman Sachs Group Inc. predicted a reverse-repurchase
  rate increase at the January meeting, and recommended that
  investors buy the rupee against the dollar.
- 44 per dollar in three months and
  43.4 in six months
- Tushar Poddar
- Finance Secretary
  Ashok Chawla

Roubini Sees Risk of ‘Double Dip’ Global Recession (Update2) - Bloomberg.com

He said a “weak” job market will contribute to another 13 percent to 18 percent drop in house prices, bringing total declines nationally to as much as 45 percent from their peak.

www.bloomberg.com/...news - Preview

Roubini Sees Risk of ‘Double Dip’
He said a “weak” job market will
contribute to another 13 percent to 18 percent drop in house
prices, bringing total declines nationally to as much as 45
percent from their peak.
1 more annotations...
- The reality is clearly going to be worse as the
  unemployment rate is likely to peak around 11 percent.”

Dr. Doom Has Some Good News - The Atlantic (July/August 2009)

roubini

www.theatlantic.com/...roubini - Preview

July/August 2009 Atlantic
Roubini was publishing a paper arguing that the depressed housing market was nowhere near its bottom,
32 more annotations...
- He was also full of advice about China’s reaction to the world financial crisis, including the suggestion that its options are narrower than its leaders may grasp.
- The dot-com and larger tech-industry crash of 2000 eliminated a tremendous amount of stock-market wealth.
- That is, a loss of stock-market value is damaging, but defaults on loans, which put banks themselves in trouble, had a “multiplier” effect: “When there’s a credit crunch, for every dollar of capital the financial institution loses, the contraction of credit has to be 10 times bigger.”
- It was subprime, it was near-prime, it was prime mortgages
- It was home-equity-loan lines. It was commercial real estate, it was credit cards, it was auto loans
- And not just in the United States: “People talk about the American subprime problem, but there were housing bubbles in the U.K., in Spain, in Ireland, in Iceland, in a large part of emerging Europe, like the Baltics all the way to Hungary and the Balkans,
- Roubini’s case against Ben Bernanke and his predecessor Alan Greenspan is that they kept interest rates too low for too long
- “They kept repeating this mantra that the subprime problem was a ‘niche’ and ‘contained’ problem.”
- He was much more respectful of the judgment that Timothy Geithner showed.
- how far regulation was lagging behind the quickly changing realities.
- The official philosophy of the Fed was: on the way up with a bubble, you do nothing. You don’t try to prick it or contain it. Their argument was, How do I really know it’s a bubble? And even if I tried to ‘prick’ a bubble delicately, it would be like performing neurosurgery with a sledgehammer.
- (Except in Japan, where the main stock index stood near 39,000 in the late 1980s and is around 9,000 today
- “These asset bubbles are increasingly frequent, increasingly dangerous, increasingly virulent, and increasingly costly,”
- $10 trillion in household wealth [not just housing value but investments and other assets] has been destroyed in this latest crash.
- t a ‘global savings glut’ as the source of imbalances, Geithner was talking about America’s excesses and deficits.
- These were passing the $800 billion stimulus plan, the mortgage-relief plan to reduce foreclosures, and the “toxic asset” plan to help banks clear bad loans from their books.
- Then the side effects of today’s deficits-be-damned efforts to spend money and loosen credit will become “the problem you are facing.”
- government should move straightaway to nationalization
- “monetizing the debt.”
- directly monetizing about half of the budget deficit,”
- “measured pace”—25 basis points, or one-fourth of 1 percent, every six weeks. “That implied it would take two and a half years until they normalized the rate,” Roubini said
- “And that was one of the important sources of trouble, because at that point money was too cheap for a long time, and it really fed the bubble in the housing base.”
- So the lesson would be, when a recovery begins, get rates back to normal, faster.
- But he added that it is not too soon to lay plans for avoiding the consequences of too much money flowing rather than too little.
- Chinese exporters in business. To do that, they want to prevent their currency from rising.
- We’ve been growing through a period of time of repeated big bubbles,
- ‘growth’ based on overconsumption and lack of savings.
- It was a growth model where we overinvested in the most unproductive form of capital, meaning housing.
- the potential for our future growth is going to be lower, because of the excesses we’ve had
- infrastructures
- Renewable resources
- nanotechnology

Roubini Says Recession May Continue Until End of 2010 (Update1) - Bloomberg.com

China’s economy may grow 5 percent “at best” in 2009 after expanding at an average 10 percent pace each year in the past decade, Roubini said, rejecting the theory that emerging markets are decoupled from the problems in industrialized countries

www.bloomberg.com/...news - Preview

china growth india roubini

taking over insolvent banks, cleaning them
up and re-selling them to private investors
China’s economy may grow 5 percent “at best” in 2009 after
expanding at an average 10 percent pace each year in the past
decade, Roubini said, rejecting the theory that emerging markets
are decoupled from the problems in industrialized countries.
1 more annotations...
- adviser to
  the U.S. treasury department from 2000 to 2001.

Global Crisis ‘Vastly Worse’ Than 1930s, Taleb Says (Update1) - Bloomberg.com

k expects U.S. economic activity, Nassim Nicholas Taleb, Black Swan

www.bloomberg.com/...news - Preview

Federal Reserve Chairman Ben S. Bernanke told lawmakers May
5 that the central bank expects U.S. economic activity “to
bottom out, then to turn up later this year.”
he world’s largest economy may need additional fiscal
stimulus to emerge from its current recession, Kenneth Rogoff,
former chief economist at the International Monetary Fund, told
Bloomberg News yesterday.
6 more annotations...
- $787 billion
  stimulus plan
- Gold, copper and other assets “that China will like”
- Copper for three-month
  delivery on the London Metal Exchange has surged 55 percent this
  year on speculation demand will rebound as the global economy
  recovers from its worst recession since World War II.
- ommodity prices are also gaining amid signs that China’s 4
  trillion yuan ($585 billion) stimulus package is beginning to
  work in Asia’s second-largest economy
- “Debt pressurizes the system and it has to be replaced with
  equity,” he said. “Bonds appear stable but have a lot of
  hidden risks. Equity is volatile, but what you see is what you
  get.”
- Currency and credit derivatives will cause additional
  losses for companies that hold more than $500 trillion of the
  securities worldwide, Templeton Asset Management Ltd.’s Mark
  Mobius told the same Singapore conference today

The woman who called Wall Street's meltdown - Aug. 4, 2008

proliferation of interest-only, negative-amortization, and other exotic mortgages would transform many prime borrowers into subprime credit risks

money.cnn.com/...index3.htm - Preview

proliferation of interest-only, negative-amortization, and other exotic mortgages would transform many prime borrowers into subprime credit risks
FICO credit scores to gauge default risk,
16 more annotations...
- Any borrower who's upside down in his mortgage - i.e., the size of his mortgage is bigger than the value of his home - is likely to make car and credit card payments before paying his home loan.
- Citigroup's problems
- high-LTV mortgages
- The bank's $10.8 billion in annual dividend payments was a clear source of potential savings.
- From 2001 through 2005, for every dollar of bank capital used to make mortgage loans, ten were supplied via investors in mortgage securities.
- "Right now their expenses do not match their revenues."
- because of the loss of the securitization market and the paucity of mortgage credit available.
- "During the last credit crisis the stocks hit bottom in November 1990, and the losses and nonperforming assets didn't peak until well into 1991
- unload their problem loans and mortgage securities or to "get real" about how they're valued.
- If she has no idea how to properly value bank stocks right now, it's because the metrics don't work. Price-to-earnings ratios are useless when earnings are nonexistent. And valuing banks on price-to-book ratios is just as futile.
- new accounting rule known as FAS 141R
- The rule demands that an acquirer not only immediately mark to market the portfolio of the company being bought - and remember, bids for mortgage assets are now few and far between - but also mark to market its own portfolio as well. "Nobody's going to want to do that," Whitney says.
- Another regulatory change
- will bar credit card issuers from using outside credit information to reset interest rates.
- "All I know is, I want to do something big. I want to earn the right to be at the table with the smartest people.
- "But the numbers speak for themselves. And what they're all saying is, this is far, far from over."

The woman who called Wall Street's meltdown - Aug. 4, 2008

artificially inflated the U.S. home-ownership rate to 69% from the more natural level of 64%., meredith whitney

money.cnn.com/...index2.htm - Preview

U.S. home-ownership rate to 69% from the more natural level of 64%.
"Low equity positions in their homes, high revolving-debt balances, and high commodity prices make for the ingredients of a credit implosion, particularly at this point in the consumer cycle," Whitney wrote

Meredith Whitney: The credit crunch is far from over - Aug. 4, 2008

Banking problems, problem with mortgage backed securities

money.cnn.com/...index.htm - Preview

Nouriel Roubini - Wikipedia, the free encyclopedia

Views on economy, economic predictions, top economist, economy economic predictions

en.wikipedia.org/Roubini - Preview

ly increases, prices fall: That’s been the trend for 110 years
"We’ve had a model of 'growth' based on overconsumption and lack of savings. And now that model has broken down because we borrowed too much." He feels that too much human capital went into financing the "most unproductive form of capital, meaning housing"
6 more annotations...
- "now embarked on a policy in which they are in effect directly monetizing about half of the budget deficit," but that as of now "monetization is not inflationary," as banks are holding much of the money themselves and not relending it.
- In late July he also warned that if no "clear exit strategy" is outlined and implemented, there was the potential of a "perfect storm:" fiscal deficits, rising bond yields, higher oil prices, weak profits, and a stagnant labor market, which combined could "blow the recovering world economy back into a double-dip recession."^[14]
- we have a subprime financial system, not a subprime mortgage market"
- His pessimism is focused on the short-run rather than the medium or long-run.^[2]
- But we are still only in the early stages of this crisis. My predictions for the coming year, unfortunately, are even more dire: The bubbles, and there were many, have only begun to burst"
- U.S. banking system was "effectively insolvent.

28 Oct 09

Plan Coming on Commercial Loans - WSJ.com

sheila bair, commercial real estate loan losses, defaults, bank loan portfolios

online.wsj.com/...SB125557174069786539.html - Preview

commercial real estate loans

Rajeet Nabha's Public Library

Wind Power India

Features : Google Public data - Web Search Help

Yahoo! Alerts - Stocks Watch Alert

My Portfolio

Justdial: Ipod in Ansal Plaza Delhi

BatchBook: Tour

Dr. Doom - Profile - Nouriel Roubini - Predicting Crisis in the United States Economy - NYTimes.com

Dr. Doom - Profile - Nouriel Roubini - Predicting Crisis in the United States Economy - NYTimes.com

'Most Accurate Economist' receives Lawrence R. Klein Award | ASU News

SpiceJet May Raise $50 Million; Plans Flying Overseas (Update2) - Bloomberg.com

India Sets Stage for Rate Increase as Focus Shifts to Inflation - Bloomberg.com

Roubini Sees Risk of ‘Double Dip’ Global Recession (Update2) - Bloomberg.com

Dr. Doom Has Some Good News - The Atlantic (July/August 2009)

Roubini Says Recession May Continue Until End of 2010 (Update1) - Bloomberg.com

Global Crisis ‘Vastly Worse’ Than 1930s, Taleb Says (Update1) - Bloomberg.com

The woman who called Wall Street's meltdown - Aug. 4, 2008

The woman who called Wall Street's meltdown - Aug. 4, 2008

Meredith Whitney: The credit crunch is far from over - Aug. 4, 2008

Nouriel Roubini - Wikipedia, the free encyclopedia

Plan Coming on Commercial Loans - WSJ.com

Sponsored Links

Top Tags

View All Recent Tags (49)

Public Tags (143)

Rajeet Nabha's Public Lists (7)