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The other Dr. Doom

Sunday, August 17, 2008

The Wikipedia disambiguation page for Dr. Doom looks like it is in need of a little updating. While Marc Faber easily makes the grade, Peter Schiff is noticeably absent along with the subject of this excellent piece in today's New York Times Magazine that carries the descriptive URL - Who's Henry Kaufman anyway?

The NYT Magazine piece about Nouriel Roubini is must-read material for anyone who's been paying attention to the housing bubble over the last few years. There's lots of great biographical material (he speaks four languages) and at least one disturbing revelation (he likens himself to Alan Greenspan).

But, most of all there's that cool black-and-white photo that just oozes doom. In fact, it looks like Nouriel has just caught a glimpse of some alien space monster that is about to squash him like a bug.

Dr. Doom
On Sept. 7, 2006, Nouriel Roubini, an economics professor at New York University, stood before an audience of economists at the International Monetary Fund and announced that a crisis was brewing. In the coming months and years, he warned, the United States was likely to face a once-in-a-lifetime housing bust, an oil shock, sharply declining consumer confidence and, ultimately, a deep recession. He laid out a bleak sequence of events: homeowners defaulting on mortgages, trillions of dollars of mortgage-backed securities unraveling worldwide and the global financial system shuddering to a halt. These developments, he went on, could cripple or destroy hedge funds, investment banks and other major financial institutions like Fannie Mae and Freddie Mac.

The audience seemed skeptical, even dismissive. As Roubini stepped down from the lectern after his talk, the moderator of the event quipped, “I think perhaps we will need a stiff drink after that.” People laughed — and not without reason. At the time, unemployment and inflation remained low, and the economy, while weak, was still growing, despite rising oil prices and a softening housing market. And then there was the espouser of doom himself: Roubini was known to be a perpetual pessimist, what economists call a “permabear.” When the economist Anirvan Banerji delivered his response to Roubini’s talk, he noted that Roubini’s predictions did not make use of mathematical models and dismissed his hunches as those of a career naysayer.
Yes, economists and their models...

When will the dismal set learn to set aside their precious models once in a while and apply what, in engineering, we used to call the "stink test"?

That is, when you'd look across the table and ask, "Does this make sense?"

This is the question economists should have asked each other when reports began emerging early in the decade of ordinary people waiting in lines to buy houses with no income, bad credit, and no money down.

Instead, economists tried to justify the abysmally low savings rate by arguing that it should factor in such things as home equity.


This week's cartoon from The Economist:
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Anonymous said...

I like to hope that the one good thing to emerge from our current straits is, that most of economics will finally be seen for what it is, the latest version of alchemy or phrenology.

Of course, that doesn't mean that economists will become any **less** arrogant.
-- sglover

Tim said...

A similar sentiment about models at The Stalwart: Please Models, Just Die

" finance and economics there has been far too much modeling going on and far too little thinking. So please, if anything good can come of the current economic blow- up, then please, models, just die."

dearieme said...

You may be interested in this obituary of the British "Dr Doom", Tim; you share his views, I think, on your eponymous Central banker.

Tim said...

Interesting - never heard of Tony Dye before.

Aaron Krowne said...

Career economists know how their bread is buttered.

The ones who don't... aren't.

Natural selection; of the adverse variety. said...

Doom's most dangerous weapon is shown to be his intellect, and is seen to possess one of the greatest human minds in the Marvel Universe. He has extensive knowledge of all sciences, and is an expert in robotics, genetic engineering, weapons technology, bio-chemistry, and other fields. Doom is depicted constructing numerous devices in order to defeat his foes or gain more power, including a time machine, a device to imbue people with superpowers, and numerous robots. Doom's calculating and strategic nature leads him to use "Doombots," exact mechanical replicas of the real Doctor Doom, for many missions, typically those where he fears defeat.[20] Doom also possesses a limited amount of magic ability. This ability is due to knowledge of the mystic arts learned during his time with Tibetan monks and from his mother. His magical talents are limited by his lack of humility and refusal to admit that he is not a master of all arts. The alien Ovoids teach Doom the process of psionically transferring his consciousness into another nearby being, which Doom uses on several occasions, including to escape death at the hands of Terrax.[20] Doom also uses his scientific talents to steal and replicate the power of Galactus' heralds such as the Silver Surfer on several occasions.

Doom's armor, originally designed to hide his face from the world, is both menacing and powerful. As a defensive measure, his armor is built to generate a massive electric shock, disabling anyone who might come in contact with Doom.[28] The suit is highly resistant to damage, and has the additional defense of a force field generated by the armor.[28] The armor's exoskeleton augments Doom's natural physical strength, granting him low level superhuman strength. The armor is self-supporting, equipped with internal stores and recycling systems for air, food, water, and energy, allowing the wearer to survive lengthy periods of exposure underwater or in outer space. For weapons, Doom utilizes blasts of energy from his gauntlets, as well as some mystical powers like the ability to cast bolts of electric energy.

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