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Charlie Gasparino Is Worried About The Nouriel Roubini Hype

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First, off, Charlie Gasparino would just like to start by saying he means no disrespect to Nouriel Roubini. The little mezza fanook's clearly got some smarts on him and the guy throws a great party (should Chaz ever be invited back, he swears there won't be another unfortunate alleged incident-- and besides, who among us hasn't been pulled aside and told by the host that "there have been some complaints"? So he grabbed a dame's cans-- so what? She wouldn't have made such a stink about it if his meathooks hadn't had dip on them at the time. Broad needs to loosen up).

Roubini may be the most recognizable economist on the planet. He's a New York University professor, with the nickname "Dr. Doom," who is famous for soirées in his TriBeCa loft that attract a combination of attractive foreign women and financial celebrities. On a personal level, he's smart, engaging and a pretty nice guy.

Having said that, Gaspo had some time to think about things this weekend and something about the Doc has been plaguing him.

Here's an interesting question: If Nouriel Roubini is so prescient, if he really did predict the housing bubble and the financial crisis as the mainstream media claims, why is he basically ignored by so many sophisticated investors?

(Chaz knows Roubini is ignored because he did his research.)

In my unofficial survey, I couldn't find a single investor who regular uses his research. What gives?

The answer I received from market forecasters and investors is that Roubini's research often doesn't live up to its media-hyped reputation. Based on my research, it wasn't until about August 2006 that Roubini began talking about a housing crisis, and he was hardly alone. Several economists and investors, from John Paulson to Stan Druckenmiller and around this time Goldman Sachs, were also predicting the housing decline. Roubini, for his part, wasn't available for comment, but a spokesman said in a statement that he has "built a strong and rapidly growing business," and has more than "1,000 institutional clients."


My point is not to pick on Nouriel Roubini as much as it is to draw attention to his record as he becomes a prominent voice in Washington policy-making circles. Roubini, for example, supported President Obama's failed $800 billion stimulus plan, and has even called for more spending to get the economy rolling, although you didn't hear him fret much about the Chinese boycotting our debt when he said that. (He opposes a second stimulus.) He said there's now a good chance the country is heading for a double-dip recession.

Despite the hype, Dr. Doom isn't always right -- and Obama and the media should keep that in mind when they take his advice.

Roubini's Doom In His Predictions [NYP]