Friday, July 03, 2009

Profile: Dr. Doom

Is Nouriel Roubini a one-hit wonder? An excerpt from the Portfolio article:

Now the ridicule has turned into respect, not to mention countless TV appearances, speaking engagements, invitations to testify before Congress, new clients for the consulting firm he runs, and parties packed with young, beautiful admirers. But as the world searches desperately for signs of recovery, Doctor Doom faces his own potential doomsday scenario: If the economy turns up, he could go down as nothing more than a one-hit wonder. Unless he nails it again.

That might be tough. Not only has Roubini been a professional downer for years, his reasoning has frequently been off. He first predicted, incorrectly, that there would be a bust as a result of Hurricane Katrina, and later, again incorrectly, that the economy would tank as a result of trade imbalances. The collapse was initially triggered by subprime-credit problems, and he initially underestimated how devastating they would be. More than a few economists are convinced that Roubini’s call was less a matter of his genius and more about the simple fact that if you forecast a recession often enough, sooner or later you’ll be vindicated. “Nouriel Roubini has been singing the doom-and-gloom story for 10 years,” says Nariman Behravesh, chief economist for IHS Global Insight. “Eventually something was going to be right.”

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