Ah yes, jobs were lost in the US, more than expected, and now it is all doom and gloom again. After all stocks have risen too much, too soon, and too fast, at least according to him.
“Markets have gone up too much, too soon, too fast,” Roubini said in an interview in Istanbul on Oct. 3. “I see the risk of a correction, especially when the markets now realize that the recovery is not rapid and V-shaped, but more like U- shaped. That might be in the fourth quarter or the first quarter of next year.”
Ah yes, a U… Hmm, is that what you said before? Was it not an L?
Roubini, an economist with New York University’s Stern School of Business, told a full house at the Westin Galleria Ballroom that there stands a one-third chance that the US will experience "L-shaped stagnation" similar to Japan’s prolonged economic drought.
"This is the worst financial crisis since the Great Depression," said Roubini, noting that economic woes have spread beyond the US into Europe and the emerging world, most particularly China, which is experiencing a "hard landing."
And what else did he say?
On the topic of slumping oil prices, Roubini would not rule out a drop toward $20 a barrel by the end of the year, while Behravesh said that crude may go back up to $60 a barrel as the economy begins to heal in 2010.
And on top of that he said.
“My main scenario is that it’s highly likely it goes to 600 or below,” Roubini said today in an interview at the Chicago Board Options Exchange Risk Management Conference in Dana Point, California. A level of “500 is less likely, but there is some possibility you get there.”
The moral of the story is that economists like Roubini are one trick ponies. They got the financial crisis right, and then can’t seem to detach themselves from their pony. After all that pony makes them lots and lots of money. It’s best said by Gmike2000 on the Wilmott forum.
This is a problem, you have economists making stock market, and crude oil predictions without actually being in the market. And yet people especially retail investors like the ones reading this, listen to this guy, and make stock picks.
If you want to know why retail investors think the stock market is gamed by the big boys it is because retail completely underestimates the stock market. They are so wrapped up in the media’s trotting out of one trick ponies that they forget to really look at the big picture.