How to save a friend from the false prophet Nouriel Roubini

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This is a guest contribution by Damien Hoffman, editor of the very popular Wall St Cheat Sheet blog. Make sure to add this site to your must-read list.

In August I wrote an article “Is Nouriel Roubini a false prophet?” Apparently, some people are so smitten with Roubini they actually ignored all the cited articles and said, “No”. Consequently, I teamed up with a group of people around the world on an open source project to continue our mission exposing false prophets and help unwash those well-meaning brains.

The video below is a large collection of evidence proving Roubini has an horrendous record as a prognosticator. If you too know someone who has been listening to the seductive sounds of Roubini’s mantras, send them this helpful deprogramming message.

Source: Damien Hoffman, Wall St. Cheat Sheet, September 3, 2009.

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17 comments to How to save a friend from the false prophet Nouriel Roubini

  • Short Bus

    Complete nonsense.

    Way too harsh. Nouriel did call many events too early, but still got the event correct.

    How was anyone to know how corrupt and criminal the government was going to act. Who saw Cash for clunkers and $8000 housing rebates and massive TARP loans and czars coming.

    This government has been even more corrupt than any before it, and it is little wonder that Nouriel did not envision that.

    As the circumstances change, of course Nouriel had to change his mind on the shape of the recovery from L to U to W. We all have !!!

    Who would have imagined 2-3 years ago, that a black man would come into power and bring into power such corrupt leaders and lead to the demise of the country and currency through socialist ideals and actions.

    It would have been very likely that a bank holiday would have been declared and the markets shut down for weeks had the over leveraged companies been allowed to fail (as they should have been).

    Shame on your Prieur for posting this nonsense !!!!

  • Short Bus

    I did not even mention the $700 Billion stimulus bill which NO ONE in congress even read. Who could possibly say in 2005-2007 that they would have seen that coming.

    Everyone is still only now just finding out where all the money went and it will take years to finally figure how the money was really spent and wasted.

    Of course Nouriel changed his projection of the shape of the recovery !!!!

  • mirrek

    when conditions changes so does his take on the economy so parapharase a classic. i must admit i do not pay too much attention to his calls on short term stock market performance but remain watchful on his long term forecast on the economy. it seems his record here is much better. i find his comments insightful and informative. what might be slightly irritating is his self-rightousness.

  • Walter

    The contribution by Damien Hoffman is nothing else than fateful and malicious, most probably based on jealousy, stupidity, or thirst of being a protagonist.

    First of all, Dr. Roubini by profession is an economist not a prognosticator or a sarcastically called “prophet”.

    Second, liked or not he is among the few that showed high in advance common sense while the rest lived in the world of stupid fantasy and arrogance.

    Finally, if the individual Hoffman was so smart why he did not long before pointed out the false prophet?

  • hotairmail

    Roubini as an economist, as opposed to a market forecasting shill, is very good.

    The shape of things changed because the authorities took notice finally and acted.

    The guy who is obviously eaten up inside by Roubini’s success is clearly just jealous. Not an edifying sight.

  • Ian Nunn

    After listening to this I’ve added Hoffman to my “Must Avoid” list. A handful of examples is hardly a “large number”. The problem is we don’t know how large the sample space is of prognostications and how representative the examples are.

    The other issue is how does his record compare to other economists? He could still have a lousy prediction record and be best of the bunch.

    Not a useful post.

  • Jack Gallagher

    Impolite beyond evaluation. Being early with economic calls is not the same thing as being “wrong” or otherwise deserving of the “broken clock” criticism. John Mauldin made some of the same economic predictions, and was also early. I have a great amount of respect for both Mauldin and Roubini. I must also agree with other posters here about the tenor of Hoffman’s guest post being absurdly out of bounds – and I’m surprised, Prieur, that you would promote this sort of “flaming” of any prominent economist. I don’t find a lot of positive value in Hoffman’s post, and I certainly didn’t learn anything from it. How many other economists were still cheerleading the markets as late as April/May of 2008 with claims that Bear Stearns was just a one-off event and that the markets were “looking across the valley” and pointing to no recession at all? That turned out to be the right shoulder of a massive head & shoulders top on the monthly charts – not that Mr. Hoffman may have noticed (but maybe he did at the time – I don’t know as I don’t follow Hoffman). Mr. Roubini, whatever flaws he may have, is more circumspect than most of his critics think. Certainly Mr. Hoffman is not circumspect at all.

  • First, I know there are many people who love Roubini simply because we need a bear hero. I am sorry you are hurt by the facts of Roubini’s “expert” opinions. Just because he is eloquent, has a good PR team, and smart does not make him worthy of his celebrity nor listening to his opinions.

    For the record, that project was an open-source collaboration. It included contributions from financial professionals in the C-Suite at top banks, central bankers, and some of the BEST analysts on Wall Street. The Bibliography is posted with links. So are ALL of Roubini’s papers. Read them. People who are good at what they do are sick of seeing Roubini get credit for nothing.

    The goal of the video is to help people who see Roubini on TV and invest based on his horrendous trackrecord. Roubini is nothing more than the bear version of Jim Cramer. When I did an expose on Cramer, the hate mail was sharp. But the facts are the facts. There is not a single thing in that video which is not cited. They are all Roubini’s calls and opinions — not mine.

    I did not once attack Roubini as a person. I attacked his awful work. There is a huge difference. I didn’t use pictures of him partying with NYU students at his flat during the height of his celebrity. That’s his business. I didn’t discuss his firm’s boost in revenues or whether he’s a bad person. In fact, he is a nice guy. But Jim Cramer is nice too. Doesn’t make him a good economist (and, yes, Roubini gives investment advice and outlooks). It also scares me that Roubini is influencing public policy and Obama’s cabinet.

    Prieur does a service for people who want scientific facts. Some will never listen because they’ve already made up their minds. Others will preserve capital. For them, Prieur is doing his job as a journalist.

    Lastly, if you want to read about the people who deserve your attention on Wall Street, learn something about Josh Rosner and Chris Whalen. Those are the real prophets …

  • Frank W

    Well, last time the knife in the back didn’t work and judging from what the vast majority of the above-listed bloggers say, it is not working this time either. One wonders who is paying this backstreet rabble-rouser to “get Roubini”. Or is it just that his blogsite is not getting enough attention? When did Roubini ever claim to be a prophet? He makes judgements about the future from time to time and who doesn’t. The situation changes as time goes on and, consequently, so do the judgements. As the editor-in-chief of finance for the London Telegraph — Ambrose Evans-Pritchard — recently stated, this is the sensible thing to do. I am very glad to get Roubini’s data and analyses, when available, as much as I am happy to get information from Hussman, Mauldin, Muenchau and others who know what they are doing. Anyone, who blindly follows any one person’s opinion no matter how good that person is, deserves to get screwed. Read rather widely and take responsibility for yourself and your investment decisions.

  • Yikes! How did this end up on Postcards, one of my favorite blogs? I don’t follow Roubini too closely so I don’t really have an ax to grind one way or another. However, Roubini is an economist, not a Jim Cramer-esque market timer! When conditions on the ground change, all of us MUST react to the new reality. We have seen government intervention on an unprecedented scale, which has the power to very quickly change our economic reality. Thus, forecasts are subject to change very quickly based on this intervention.

  • Jan

    Roubini’s timing is off. Whose isn’t?

  • RickT

    Damien Hoffman in his video and article takes quotes of Roubini out of context and appears on a rant to destroy Roubini. His assertion that the professor has a PR team is laughable, he probably needs one, but would be the last person to take one. Roubini is cautious, bearish and realistic. He never pretends to be a prophet, Hoffman just comes across like a jealous kid.

  • Nitin

    I agree completely with Rick T, Jan, Scott and some other posters above. Roubini is prognosticating based upon what he sees, and I appreciate his commentary, as I do Maudlin’s, who has also been wrong, hedging his bets, etc. from time to time. Prieur – I come to your blog often, and I always expect insightful articles. The Hoffman rant is an uncommon exception to your otherwise impeccable taste.

  • jekah

    Agreed. I really enjoy your posts and thank you for your site, but this did not add to anyone’s understanding of our situation, past, present or future. It’s just a hatchet job, and a poor one at that.

  • Well, I guess some people simply do not care about facts. As I posted above, there is a HUGE bibliography at my site AND a post to ALL Roubini’s works. I did not create that video alone. I did it with the help of central bank employees, REAL good economists/analysts, and other top financial professionals.

    If you say Roubini does not hold himself out as a prognosticator, you have not watched his video clips. There are hundreds. Watch them. He is asked for his outlook almost EVERY TIME. They have been horribly wrong. It’s that simple. Prove me wrong. You can’t. I spent 3 months collaborating with others and reading/watching all Roubini’s stuff. It’s called journalism and fact-checking.

    In the face of facts, there are simply hordes of people who would prefer to continue believing otherwise. That video is not a hatchet job or a knife in Roubini’s back. It is a public criticism of Roubini’s awful work. There are a lot of much better people out there. And there are also a lot of people who email and ask me whether they should follow Roubini’s advice. The facts say, “No.”

    If you want GOOD advice on banks and the economy, read Chris Whalen and Josh Rosner. Read Prieur du Plessis. If you like a good orator whose academic works did not pan out in reality, keep paying attention to Roubini. Life is short …

    Also, 80% of the people who watched the video liked it. I have received “Bravo” emails from all over the world from people who watch Roubini closely and were happy to see someone bring this to the attention of more people. If you work for Roubini, subscribe to his website, or enjoy listening to him, I am sorry you did not like it. You are squarely in the minority.

  • Jack Gallagher

    Damien Hoffman wrote: “I did not once attack Roubini as a person. I attacked his awful work. There is a huge difference. I didn’t use pictures of him partying with NYU students at his flat during the height of his celebrity. That’s his business.”

    Read that again. You begin by saying you didn’t attack him as a person, and then you follow it up two sentences later by remarking on him “partying with NYU students?”

    For the record, in the spirit of giving you the benefit of the doubt, Mr. Hoffman, I checked your website. Let me just point out to you that use of the “s” word doesn’t make you “edgy” in the world of finance. It just makes you crass.

    Lots of us who read Prieur’s website also read some of the others you mention as being “approved” from your point of view, such as Mauldin and Whalen. Would it surprise you to know that those two men don’t share your opinion of Mr. Roubini?

    I can’t imagine that Prieur shares your opinion. I wish, Prieur, that you would speak up here and clear the air.

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